The worldwide trend for soft drinks packaging over the past four years has been one of a rocketing share of PET across all sectors and all regions and this is set to continue. Zora Milenkovic reports.

PET now takes the lion's share of total soft drinks packaging across the globe, accounting for just over 67% of total off-trade packaging types in 2003 - an increase of 11 percentage points compared to 1997. Moreover, PET packaging in soft drinks is forecast to register 40% growth over the next five years.

The functionality of PET in the drinks world has ensured its share of the soft drinks markets in each region stands at between 60% and 70% of total off-trade soft drinks packaging. In Latin America, PET accounts for a massive 87%.

Euromonitor's research shows that the inexorable rise of PET has been at the expense of other traditional packaging formats such as can and glass. Can packaging saw a decline across the board - its global share dropped from 19% in 1997 to just under 15% in 2003, a trend echoed across all regions. It retains a sizeable share of the soft drinks markets in Asia Pacific and North America, due largely to the format's ubiquity in carbonates and RTD teas and coffees. Glass suffered an equally pronounced decline - in Latin America, glass packaging fell to a third of 1997 levels - as consumers switched to the more convenient PET.

Market domination
On home turf, the total UK soft drinks market (both on-trade and off-trade) is dominated by PET, accounting for just under 7 billion units sold in 2003, or just under 50% of total packaging. The continuing popularity of carbonates in the UK market contributed to making PET bottles the main type of packaging for this product, and growth was accordingly strong, at just under 40%.

Still bottled water was the second largest customer for PET packaging in 2003, while metal beverage cans were the second largest pack type and accounted for 22% of total soft drinks packaging. Although metal beverage cans dominate the carbonates off-trade market, they have showed a decline since the introduction of PET bottles.

Glass bottles were the third largest pack type for total soft drinks (on-trade and off-trade together) in 2003, dominated by carbonates, which took up 50% of the glass bottle market for soft drinks. However, growth was greatest for functional drinks, still bottled water and RTD tea.

Off-trade, 2 litre bottles predominated in terms of total units sold due to perceived price advantages, although growth was greatest for 250ml bottles. This was reflected in consumer preferences for choosing plastic over cans when drinking 'on the hoof" because of the resealable advantage.

Although nectars make up the smallest proportion of the PET bottle packaging market off-trade, they also account for the highest growth rate over the review period. Demand for PET for other soft drinks such as 100% juice and juice drinks (0-24% juice) is also rising fast. The success of PET over HDPE in these areas is due to factors such as its glass-like premium look, its light weight and the fact that it can be recycled.

Many improvements
Traditionally, PET allowed more light to filter through than high density polyethylene (HDPE) bottles, but advances in technology means PET can now be used to package more light-sensitive products such as those with high vitamin contents, which helps to explain PET's strength in 100% juice. Furthermore, improvements in gas barriers, aseptic and hot filling techniques and oxygen scavenging have made PET more attractive to retailers and consumers alike.

The heuristic impact that packaging has on customer perceptions can be seen in the case of Sunny Delight, which was launched in 1998 and is packaged in HDPE. The manufacturer, Procter & Gamble, took advantage of the qualities attributed to this pack type and as part of the marketing strategy displayed the beverage in the chiller cabinet next to fresh juices in supermarkets. This gave the impression that it was a fresh high juice content drink.

The initial success of Sunny Delight's marketing was reflected in its high UK brand share in 2000. At the same time, there was a surge in HDPE packaging on the market. However, negative reports in the media concerning the 'reality' of this drink - such as its low juice content, high sugar levels and artificial colours and flavourings have since irrevocably tainted its image. Furthermore, HDPE packaging for juice drinks, and Sunny Delight in particular, declined dramatically over the review period.

Functional increase
The review period showed a huge overall increase in demand for the packaging of functional drinks, still bottled water, flavoured bottled water and RTD tea, which is a reflection of the current trend towards healthier lifestyles.

In the off-trade, functional drinks are dominated by PET packaging whereas metal beverage cans are more popular in the on-trade. At the same time, the growth in demand for PET for functional drinks in the on trade was phenomenal due to the increasing popularity for this type of beverage.

Huge sales of still bottled water drove demand for PET both on- and off-trade. However, glass remains important in the on trade for both 250ml and 1,000ml bottles, as people increasingly have still water to accompany their meals in restaurants and prefer the premium look of glass on the table.

Although functional drinks hold a relatively small share of the UK soft drinks market, Euromonitor has found that they are quickly gaining popularity and this is reflected in the high rates of growth in demand for packaging in this sector, particularly on-trade. Sales are driven by increasing health awareness as well as the emergence of nutraceuticals such as Amé and Purdey's and more recently, Carpe Diem Kombucha and Gingko drinks, which are sold on the health benefits they offer and are packaged in glass bottles reflecting the fact that they are premium products. The 600ml size bottle is favoured in the off off-trade and also enjoys the highest growth in the on-trade, with both the 275ml and 330ml bottles are enjoying huge growth.

During the review period, growth in demand for functional drinks in all available sizes was consistently high with PET bottles playing the biggest packaging role in the off-trade and metal beverage cans dominating in the on-trade. This is borne out by the popularity of energy drinks such as Red Bull appealing to younger drinkers in the on-trade. Furthermore, the fact that people are increasingly looking for interesting non-alcoholic beverage alternatives in the on-trade is allowing licensees to stock adult soft drinks at premium prices.

The use of metal beverage cans as a packaging format for soft drinks in the UK declined considerably over the review period although it does continue to dominate certain sectors, namely functional drinks and carbonates. Although metal cans are produced far more efficiently than in the past, they are losing market share to PET packaging formats. Indeed, the fastest growing package size for Coke, the leading carbonate in the UK, is the 500ml PET bottle because of the increasing popularity of drinking on-the-go.

Regulation effect
According to Euromonitor research, a country of note where (returnable) PET has seen a significant rise in share, with cans declining due to environmental regulations, is Germany, where a tax was levied on all non-returnable drinks packaging (excluding juices) at the start of 2003. 'Zwangspfand' - a system of compulsory deposits on non-refillable containers for carbonates, sparkling bottled water and beer - was introduced amid a flurry of protests from domestic manufacturers and retailers, concerned that the new law would have a negative impact on sales of soft drinks.

After a shaky start where consumers could only return their packaging to the store where the purchase was originally made, a nationwide collection system was finally put in place in October 2003, whereby single-use packaging can be returned to any outlet fitted out with special recycling depositories. The chaos at the start of the year affected carbonates sales negatively, although this has already balanced out and consumers are not expected to switch to other soft drinks for the sake of a comparatively small deposit. The real loser has been can packaging as on a practical level where impulse purchases are concerned, saving empty cans for recycling means spillage and smell whereas PET bottles can be resealed. Reusable plastic and glass have already increased their share of the market, whilst non-reusable PET is expected to plummet.

The concept of recycling is not alien to Germans. The country's drink manufacturers are obliged to package no less than 72% of their soft drinks, beer and wine products in environmentally friendly packaging (17% for milk packaging), or face heavy fines. The high targets for recycled soft drinks packaging set by law (glass: 90%; aluminium: 90%; plastic: 80%) have resulted in growth in the share of refillable packaging as a proportion of the total soft drinks market and every indication is that this is set to continue.

And not only in Germany - on a global scale, PET is set to register the highest growth amongst soft drinks packaging types at over 40% over the next five years, maintaining its unassailable position as leading pack type for the soft drinks industry.

Zora Milenkovic manages global market research for soft drinks at Euromonitor International.

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Expert Analysis

Global Beverage Packaging Trends - Summary

The Global Beverage Packaging Report offers a Global Summary showing aggregated volume consumption (in million litres) for 55 countries. The Global Summary is an excellent tool for analysing different pack types across 8 beverage categories at a global level. The content includes:

  • % share by pack type (refillable versus non-refillable)
  • % share by pack type and size band (single-serve versus multi-serve)

8 beverage categories: beer, packaged water, carbonates, juice & nectars, still drinks, dilutables (squash/syrups & fruit powders), iced tea & iced coffee and sports & energy drinks.

Pack types: glass, PET & other plastic, cans, cartons, foil pouches and bulk/draught.

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