Europe is a complex and fragmented market. Canadean's latest report analyses the trends that have shaped the region's drinks business in the last year. Elliot Lane reports.

Consumption per capita in Europe has reached its plateau, and for the alcohol-based producers the future is going to be difficult. Soft drinks manufacturers, however, are cutting deep into all beverage sectors and their share of throat now accounts for a third of the market compared to 25% a decade ago.

According to Canadean's European Beverage Consumption Manual, Greater Europe as a whole has seen average consumption of all beverages reach the halfway point of the theoretical saturation level of 730 litres per head per year. The Irish Republic, Denmark and the UK have already passed the 700 litres mark, the report said, based on the assumption that the average human body can comfortably drink two litres of liquid per day, including tap water.

The Danish market has one of the highest total beverage consumption rates in Europe but has slipped over the past five years. Taking this country's trends as indicative of Europe, the emphasis has been in the growth of soft drinks, which is the only sector to increase its share, accounting for around a quarter of total beverage consumption in Denmark, compared to 19% a decade ago. Carbonates now account for just under half of sales in this sector and have claimed nearly 90% of the incremental volume growth over the period.

But hot drinks have grabbed the largest share, claiming 39% of the share of throat, with the level of coffee consumption the highest in Europe.

Greater European Share of Throat 2000

Source: Canadean

It is the same in the UK, which can still be regarded as a nation of tea-drinkers, as it remains the top tipple in the hot drinks market, though Canadean reports little growth.

One brand has affected the UK per capita consumption of juice and nectars on its own, which is now falling behind Western Europe - Sunny Delight. The introduction of Proctor and Gamble's star performer in 1998 nearly halved the UK's intake of juices and nectars. The still fruit drinks market (Sunny Delight is a 5% juice-based drink) has practically doubled in the past 10 years, the report said, jumping by almost 50% the year Sunny Delight was launched. Supported by its traditionally strong dilutable market, the UK now qualifies as second place in the European league tables for still fruit products.

Europeans are drinking more, consuming 407 litres of all beverages in 2000 - 28 litres more than they did five years ago. Canadean's figures show that the West European average during 2000 was 568.4 litres per head; in Greater Europe it was 407.3 litres per head; and the East European average was 251.6 litres per head.

After the collapse of Communism, the political and economic upheavals that followed "decimated" total beverage volumes in Eastern Europe at the end of the 1980s and into the early 1990s, the report said. The 2000 figure indicates there has been a recovery and the Czech Republic registers more than twice the 252 litres average at 543.5 litres, ranking it higher than Norway, Sweden, Spain and France.

Beer has driven the Eastern European alcohol consumption up by 7% on 1990 figures, but overall, spirits, wine and beer growth across Europe is stagnating because of health conscious consumers moving to packaged water and soft drinks. They are also being influenced by the "Starbucks" factor - preferring to socialise in coffee shops rather than bars.

West Europe's total alcohol consumption has fallen from 131 litres in 1990 to its current level of 123 litres. Beer has lost four litres over the past five years, while wine and spirits have marked time.

For the wine industry, which has been playing second fiddle to the beer market for many years now, the only real growth region is Scandinavia, in particular Norway, where wine is the only alcoholic beverage to have shown growth over the past 10 years.

Western European Share of Throat 2000	Eastern European Share of Throat 2000
Source: Canadean