The second round-up in our Review of the Year series sees Ben Cooper consider a busy 12 months for our soft drink brethren.

PepsiCo’s acquisition of Russian drinks firm Wimm-Bill-Dann (WBD) earlier this month gave a certain symmetry to 2010, the year finishing much as it began with a major deal involving one of the two giants of the sector.

Back in February, Coca-Cola announced it was to acquire the North American operations of its largest bottler, Coca-Cola Enterprises (CCE). That followed PepsiCo’s move last year to buy its two largest bottlers, Pepsi Bottling Group and PepsiAmericas, a deal which also received final regulatory approval in February.

PepsiCo’s purchase of 66% of WBD will double the group’s revenues in Russia from US$2bn to $4.6bn. Moreover, once it gains regulatory approval PepsiCo plans to bid for the remaining shares in the company. PepsiCo CEO Indra Nooyi said the deal gives PepsiCo "clear leadership" in Russia's food and soft drinks industry.

The previous month, PepsiCo signed a joint venture agreement with Tata Global Beverages in India for the production of non-carbonated, ready-to-drink healthy beverages. In fact, PepsiCo has made the development of better-for-you products a key feature of its expansion plans, announcing in October the creation of a global nutrition unit and plans to grow sales of its nutrition businesses from $10bn to $30bn by 2020.

In general, the health issue has continued to be a live one for soft drinks companies during 2010, not least in the US. The Obama administration has pushed the fight against obesity further up the policy agenda, notably in areas such as labelling and advertising, ensuring a busy year for soft drinks lobbyists. However, the launch of Mrs Obama’s ‘Let’s Move’ initiative in February gave both companies the opportunity to engage in tackling the problem.

In July, a ban on sugary soft drinks in vending machines took effect in San Francisco, while, in May, the World Health Organisation (WHO) set out a number of recommendations on the marketing of soft drinks and junk food to children. PepsiCo had unveiled a new global policy regarding selling soft drinks in schools in March which would see it cease selling full-sugar soft drinks to primary and secondary schools by 2012.

In October, the European Commission moved to force soft drinks and food firms to reduce their use of artificial colourings, namely sunset yellow, quinoline yellow and ponceau4R, which have been linked to hyperactivity in children.

Producers of probiotic beverages were also given cause for concern in October when the European Food Safety Authority (EFSA) cast further doubt on probiotic health claims. The EFSA also dismissed the claim that prune juice can help maintain healthy bowels, which seemed to run counter to the experience of most people.

The use of bisphenol-A (BPA) in food and drink packaging was a recurring controversy in 2010. In October, the Canadian government added BPA to its list of toxic substances. In May, the WHO called for more research on the toxicity of BPA.

In September, it emerged that the US-based Corn Refiners Association (CRA) had petitioned the Food and Drug Administration to change the name of 'high fructose corn syrup' (HFCS), an ingredient that has proved controversial for the soft drinks sector, to ‘corn sugar’. The CRA said that corn sugar “more succinctly and accurately describes what this natural ingredient is”, adding that “a continuing series of inexact scientific reports and inaccurate media accounts about high fructose corn syrup and matters of health and nutrition” had increased consumer uncertainty.

However, in the UK, PepsiCo announced in October that it had discontinued Pepsi Raw, a brand introduced in 2008 as an alternative to Pepsi made with cane sugar rather than HFCS, citing a poor performance in supermarkets. Interestingly, Dr Pepper Snapple Group (DPSG) launched a version of Dr Pepper sweetened with sugar rather than HFCS this year to mark the brand’s 125th anniversary in July.

DPSG, the third largest player in the US soft drinks market, had been affected by Coca-Cola’s deal with CCE which handled certain DPSG brands in US states. In October, DPSG completed the licensing of certain brands to Coca-Cola. As part of the deal, DPSG received a one-off cash payment of US$715m before taxes, fees and other related expenses.

Other notable deals of 2010 included the tie-up in March between Danone and fruit producer Chiquita Brands International to produce fruit-based drinks for the European market. In May, UK soft drinks producer Britvic moved to acquire independent French soft drinks maker Fruité for EUR237m ($294m). Britvic also announced in December that it planned to launch its Fruit Shoot brand in Australia and is looking for other international partners for the brand. In October, the UK division of Tata Global Beverages acquired a minority stake in US performance beverage firm Activate. Private-label specialist Cott Corp acquired the privately-held juice maker Cliffstar Corp in July for $500m.

Both Coca-Cola and PepsiCo continued to make growth in emerging markets a key priority during the year. PepsiCo said in February that it was eyeing ‘rapid’ expansion in China, and in May it announced plans to invest US$2.5bn in China. In November, Coca-Cola reaffirmed its plans to spend $300m in Malaysia over the next five years. The previous month, Coca-Cola opened a new bottling plant in China and said it was close to completing a further two plants. In June, the soft drinks giant unveiled plans to invest a further $12bn in Africa over the next ten years.

Sports sponsorship has continued to feature prominently in the marketing strategies of soft drinks brands. In August, GlaxoSmithKline (GSK) unveiled deals with Arsenal, Liverpool and Chelsea Football Clubs for its Lucozade Sport brand. Lucozade was also launched in the US during 2010 and earlier in the year GSK signalled its intention to launch in emerging markets such as Brazil, Mexico and India.

Coca-Cola Co was appointed an official supplier for the Rugby World Cup, while Coca-Cola GB signed a three-year sponsorship deal with StreetGames, a charity that promotes sports for disadvantaged youngsters.

In November, Coca-Cola announced it would sponsor the 2012 Paralympic Games in addition to its sponsorship of the main London 2012 Olympics, and unveiled plans to extend the partnership between its Powerade brand and the National Collegiate Athletic Association (NCAA). In May, Coca-Cola GB signed up World Champion athlete Jessica Ennis as a brand ambassador for Powerade. The previous month, Coca-Cola announced that it would be extending its sponsorship of the PGA Golf Tour for a further six years, and also renewed its sponsorship of NASCAR in March.

However, this year also gave companies an all too real idea of what can happen when sporting icons fall short of the standards of probity which appear to be expected of them when acting as ambassadors for brands.

In October, Coca-Cola GB scrapped plans for Wayne Rooney to appear in a campaign for Coke Zero following allegations that he had slept with prostitutes. Allegations of involvement in spot-fixing made against a number of Pakistani cricketers in September threatened PepsiCo’s sponsorship of the Pakistani national cricket team, just renewed for a further three years, but the company said it did not plan to make any changes following the controversy. However, in March PepsiCo had dropped Tiger Woods from its Gatorade marketing campaign after the star’s extremely public fall from grace.

One would imagine, however, that a new entrant into the energy drinks category in the UK would not have quite the same qualms about the sexual mores of any potential champion. In December, Play Beverages Holdings heralded the UK roll out of its Playboy Energy Drink brand which was first launched in the US in 2008.