Global consumption of soft drinks is rising by 5% a year, well ahead of all other beverage categories, according to a report released today.

The 2003 Global Soft Drinks Report from Zenith International, suggest the sector is now challenging hot drinks to become the largest overall sector. Soft drinks volume is projected to reach 467 billion litres in 2003, equivalent to 75 litres per person.

"Economic and climate variations around the world present complications for all soft drinks companies, but many have succeeded at weathering the elements," commented Zenith research director Gary Roethenbaugh. "As a combined category, soft drinks offer a powerful growth proposition. The unrelenting advance of bottled water and still drinks, coupled with the scale of carbonates, help place soft drinks on track to become the number one beverage sector in 2005."

The report said that carbonates are the largest soft drinks segment, with a 2002 share of 42%. Bottled water is catching up fast at 32%. Still drinks form the third segment on 11%, followed by fruit juice/nectars on 8% and dilutables on 7%. Bottled water is the fastest growing soft drink, up by 9% in 2002.

Meanwhile, the US is the world's biggest soft drinks market by a substantial margin, with a 24% global share in 2002. Three countries - the US, Mexico and China - are leaders in the two most important segments, carbonates and bottled water.

The top five fastest growing countries over the past five years to 2002 were exclusively from the emerging regions of Asia, East Europe and the Middle East.  The highest growth was achieved by Pakistan, with volume up by 146% since 1997. By 2007 Asia and Australasia is forecast to become the front runner with a 25% share, outpacing North America on 24%.

Zenith predicted that 90 billion litres will be added to global soft drinks consumption by 2007.  This represents continuing annual growth of 4-5%.

"Asian growth is expected to lead the way at 7-9% a year.  The huge populations, increasing affluence and underdeveloped soft drinks markets of China and India present massive opportunities.  Strong growth is also anticipated in a number of countries across East Europe, the Middle East and Africa," said Roethenbaugh.