With competition heating up in Eastern Europe, the market has risen up the agenda for international soft drinks players.

In the last 12 months, the industry has witnessed the purchase of Wimm-Bill-Dann by soft drinks and snacks giant PepsiCo, as well as the acquisition of Nidan by The Coca-Cola Co. Danone has also merged its fresh dairy operations with Unimilk.

The arrival of such heavyweight players provides evidence that competition in Russia andthe wider Eastern European market is set to intensify.

Emerging markets are now starting to experience rising purchasing power, changing lifestyles and developing retail networks, which in turn are driving significant growth.

For Russia, in particular, according to Euromonitor, the country's dairy market is expected to outperform the Eastern European region as a whole with a 4% CAGR over 2010-2015. In absolute retail value terms, the country will account for some 60% of regional market growth over the period.

Volume growth, however, is expected to remain below value growth, at less than 3% CAGR, indicating an increase in unit price and stiff competition in the dairy market's health and wellness categories.

"In terms of soft drinks, the total consumption in Eastern Europe is half of that of the rest of Europe so there is quite a lot of opportunity to grow," Euromonitor International analyst Hope Lee told just-drinks this week.

Lee added that a more stable economic environment is one reason why companies are choosing to buy in Eastern Europe.

"There aren't as many large scale acquisition targets in Western Europe and the US, so global companies are now looking to Eastern Europe for a target," Lee said. "And Eastern Europe is close to home for many. It is also quite a stable environment in terms of the economic situation and legal framework."

Lee believes that the industry might therefore see more acquisitions in the near future, but added that this will "depend on the individual company's priority".

She added: "Russia is the largest region, so if you acquire leading players in Russia you are in a good position to acquire distribution networks also.

"In the Eastern Europe region, there are quite a lot of companies that could be targets, mostly medium-sized ones. Some of them are private ones - in the beverage industry there are a lot of private companies - particularly across the Eastern European region. Certainly, there are a lot of opportunities for mainstream companies and private equity investors."

Coca-Cola and PepsiCo's expansion in Russia is a big statement of confidence for the region. We can, then, expect more competition in Eastern Europe between these two, as well as more interest from other players.