UK fruit juices and juice drinksconsumption remains buoyant after five years of continuous growth and a number ofacquisitions have consolidated the marketplace both nationally and internationally.

The fruit juices and juice drinks(containing between 5-25% juice) market increased by 4% in both volume and value last yearto reach 1.37 billion litres with sales worth £1.4 billion, according to Leatherhead FoodRA. Pure fruit juices represent the lion's share, accounting for 68% of volume and71% of market value (see Tables One and Two).

Within the fruit juices sector, long-lifeis the main category representing about three-quarters of volume sales with chilled juicesholding the remainder. Tropicana is the brand leader in the chilled juices market althoughprivate label is dominant with about 67% of sales. Gerber is the largest player in thejuices and juice drinks market as a whole.

Table One: Fruit Juice Market byVolume and Value, 1994-98

Year Volume (m litres) Change Value Change
1994 805 +4% £900m +6%
1995 840 +4 £950m +6%
1996 850 +1 £950m n/c
1997 900 +6% £1,000m +5%
1998 930 +3% £1,030m +3%
Source: Leatherhead Food RA.

Table Two: Juice Drinks Market byVolume and Value, 1994-98

Year Volume (m litres) Change Value Change
1994 370 +1% £250m +4%
1995 410 +8% £300m +20%
1996 410 n/c £350m +17%
1997 420 +2% £350m n/c
1998 440 +5% £370m +6%
Source: Leatherhead Food RA.

Innovation

New product development and brand activityhave been stimulating consumer interest and consequently increased sales of fruit juicesand juice drinks. Recent innovations include the introduction of a new premium chilledorange juice (Minute Maid) by Danone/Coca Cola, while on the juice drinks side GerberFoods has launched Ocean Spray in distinctive Tetra Prisma packs; and Smithkline Beechamunveiled Ribena Tooth Kind, a range of ready-to-drink cartoned fruit drinks. Also withinthe juice drinks sector, Britvic introduced a range of ready-to-drink cartoned fruitjuices under the Robinson's High Juice brand, and Just Juice launched a range ofcranberry juices in cartons. The biggest launch last year, however, was Procter &Gamble's new range of chilled citrus fruit drinks called Sunny Delight, which arepacked by Gerber.

A significant market trend is the attemptby manufacturers to attract adult consumers by offering a wider variety of juice flavours,including cranberry, while healthy drinks have been used to appeal to mothers buying forchildren.

Acquisitions

The nature of the UK fruit juices and juicedrinks market has changed markedly in recent times following a series of acquisitions.Tropicana acquired apple juice specialist Copella Fruit Juices in early 1998 to complementits existing strength in chilled orange juice. Two dairy companies - MD Foods and Glanbia- disposed of their juice operations during the past year. Gerber acquired MD Foods'juice interests and is using the extra capacity to meet growing demand for Procter &Gamble's newly launched Sunny Delight. Gerber had earlier consolidated its UKstanding by taking over the Ocean Spray brand in the UK as well as the production andsales of some of Nestle's brands.

Glanbia sold its juices business toPrinces, which has been steadily expanding its UK soft drinks interests and now ranksthird behind CCSB and Britvic. Princes has also entered a partnership agreement with SouthAfrican owned Capespan International, which has formed a new Fruit Juice Division to takecontrol of all fruit juice under the Cape and Outspan brands in Europe. Anothersignificant deal involved Del Monte purchasing the Just Juice juices and juice drinksbusiness from Tomkins for £10.5 million.

International Development

On the international front, PepsiCoacquired Tropicana Products, the world's largest producer and marketer of brandedjuices, last August for $3.3 billion. PepsiCo's rationale for the acquisition was toexpand its portfolio of international soft drinks brands and to extend its reach into the'morning' period, when consumption of traditional soft drinks is relatively low.Tropicana is the leading chilled orange juice in the US where the $16 billion juice andjuice drinks market is growing by 5% annually. However, with orange juice featuring inonly one in five breakfasts in the US, there is still plenty of scope for further growth.

Europe and other regions beyond NorthAmerica offer even better prospects. Consumption of fruit juices and juice drinks inEurope is less than half the per capita consumption level of the 15 gallons per annum inNorth America.

New Small-sized Carton from RexamCombibloc

Quality of presentation and on-shelfappearance are among the key factors in influencing choice in the very heavily branded andcompetitive single-serve juice market. These advantages are supported by the new cartonformat - Combibloc Mini - introduced by Rexam Combibloc.

The elegant slim design of the cartonenables the consumer to hold the product more securely. This is also helped by therigidity of the carton, a key benefit of the Combibloc sleeve-fed system, which preventsthe carton from being crushed in the consumer's hand. Headspace created in the top ofthe carton allows the product to be shaken before use, and also helps to reduce thepossibility of spillage upon opening.

"For the first time, small-sizedcartons are now being produced with the longitudinal seam along the corner edge of thecarton," points out Anne Sedgewick, commercial manager for combibloc uk. "Thismeans that it does not run across the display surface and interrupt the design. Anothernew feature is the attachment of the straw to the side of the carton, as opposed to theback. Once again, this ensures continuous display surfaces both front and back."

Emig, a subsidiary of Holsten brewery andone of the leading German players in the soft drinks market, is one of the first juicemanufacturers to install a CombiblocMini filling machine to pack the small-sized cartons.With an output of 12,000 cartons per hour, it is the world's fastest filling machinefor beverage cartons. The carton is available in 125ml, 150ml, 200ml and 250ml sizes.