RESEARCH: Soft drinks shine in Poland
A report from the beverage analyst Canadean shows that the sector's share of all commercial beverages consumed has risen from just 18% in 1993 to almost 30% in 2002.
With a population exceeding 38 million, Poland offers one of the largest markets in Eastern and Central Europe. Although the economy is weak, with around 18% unemployment, significant investment is being put into improving the retailing infrastructure. In 2002, the number of supermarkets/hypermarkets and discount stores increased by 24% and 15% respectively.
Still drinks the fastest mover Poland had an exceptionally long and hot summer in 2002. This contributed to growth in every soft drinks sector. Of these, still drinks saw the greatest percentage increase - nearly 20% up on the previous year.
Due to the high rate of unemployment, Polish consumers are very price conscious. With very competitive prices and wide availability, still drinks are perfectly positioned to take advantage. The domestic still drinks market is dominated by local brands with the top three alone accounting for nearly half the market. Canadean said it believe that the sector will continue to flourish in 2003 with a continuing healthy growth rate.
Juice and nectars also grew strongly, helped by the launch of a number of "economy" products in 2001/2002 and significant marketing support from the producers. The largest sector though is packaged water which accounts for over 30% of all soft drinks consumed.
Eastern promise attracts plenty of admirers Due to the size of the population and the rate at which consumption is increasing, the soft drinks potential offered by Poland is considerable. Although per capita consumption is above the Eastern European average, it is still some 40% below that of Western Europe, providing plenty of room for further growth.
Financed by international organisations and Polish banks, merger and acquisition activity is widespread. Last year, the Enterprise Investors Fund acquired a 90% share of Agros-Fortuna (owner of Fortuna and Tarczyn brands). As the same Fund also owns a stake in Sonda (Sonda and Garden brands), a merger between the two companies remains a distinct possibility.
Meanwhile, Maspex's acquisition of Multivita has strengthened the company's presence in the packaged water arena (although Multivita has subsequently been bought by Coca-Cola, and is still subject to approval by the Polish authorities). Being the leading sector, packaged water has also attracted the interests of multinational giants such as Danone and Nestle Group. Danone only entered the market two years ago but has already acquired over 16% of the packaged water market through an 88% holding in Zywiec Zdroj, and a jv with San Benedetto, Polska Woda. The report predicts that consolidation will intensify across all sectors.
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