Comment - Soft Drinks & Water - Juice Volumes Squeezed in West Europe

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This month, Richard Corbett looks at the juice category and its recent struggles in Western Europe. How does the future look for juice in the region?

In Norway, the owner of Elopak, Ferd Group, has warned of volatility in beverage cartons for fruit juices in Europe in 2013 and is investing in new infrastructure for future growth. That future growth is likely to stem from Eastern Europe because in Western Europe the juice market seems to be very much depressed and the issues for juice consumption go back a lot further than this year. In fact, according to drinks researcher Canadean, we drank more juice at the turn of the century in Western Europe than we do now. In the same period, the overall soft drinks market has expanded by 17%; even the much-maligned carbonates category has grown by almost 6%.

It might be understandable to ask why juices have been left behind. 

At nearly 13 litres per capita, it could be argued that West Europeans drink quite a lot of juice anyway, and this could well be part of the problem. Getting Europeans to drink more juice has proved quite challenging, especially when the range of nectar and still drink offerings has swelled. Nectars offer more scope for flavour innovation while still drinks have more thirst-quenching attributes and, not surprisingly, many juice drinkers have migrated to these categories.

The rise of still drink offerings in particular can be blamed for playing a significant part in the downward trend for juice in Western Europe – while juice volumes have declined by 5% since 2000, still drinks consumption has rocketed by more than 40%.

In 2000, the Germans drank more than a third of Western Europe's juice total, but since then juice demand has slumped by as much as a quarter. A shift from juice to iced teas and still drinks in Germany is one influence dragging the overall regional consumption of juice downwards. There is, however, another very influential factor underpinning the decline in Europe’s biggest juice market; Germans aren’t eating breakfast with as much enthusiasm they once did.

Modern lifestyles mean that what was once considered the most important meal of the day is increasingly being shunned, and juice, which had been an important component of the daily breakfast routine, is losing out as a result. In reality, it is not just Germans that are eating fewer breakfasts; across Europe the trend to skip breakfast is undermining demand for juice.

The erosion of the important breakfast consumption occasion is an important determinant, but health and wellbeing is also a consideration. Juices still fall the right side of the health line for many Europeans, but a negative perception of juice has been emerging among some consumers for some time, related to the high sugar content of juice. Low-carb diets discourage the use of juice and the Atkins diet triggered a sharp drop in juice consumption in the US and Europe, while the latest takes on the Atkins diet continue to blight juice consumption.

Many health-conscious consumers have also migrated to products with positive health attributes like cranberry and blueberry, which deliver a better taste experience when they have a lower juice content - this is one factor behind the surge in still drink sales in the last decade or so.

The prospects would look to be decidedly muted for juice consumption in Europe, and Canadean is predicting that - with the exception of Belgium - the per capita consumption of 100% juice will fall in every market in West Europe this year.

Litres are important, but value is what keeps you in business: Encouragingly, this is on the up. Last year, the West European market for juice fell by 3% in volumes but, in value terms, grew by nearly 3%. High concentrate prices will have contributed to this rise, but there is undoubtedly a shift to better quality juices.

We are drinking less juice but better quality juice and this can be seen by the meteoric rise of the more premium chilled juice segment. In 2000, chilled juices made up just 10% of total juice consumption, today that figure is approaching 25% - chilled juice grew by 3% last year in Western Europe according to Canadean. Converting ambient consumption to chilled represents quite an opportunity for juice operators and all the indicators suggest that the top end of the juice market is in good shape. Whereas more than half the Western European ambient juice market is made up of private label products, in the chilled segment, private label accounts for just a third of chilled sales, meaning that the potential for branding and adding value is far more pronounced.

At first glance, the numbers do not look good for juice in this lucrative part of Europe and getting consumers to drink more juice does look to be a difficult goal to attain. But, encouraging them to spend more on the less juice we drink is a very realistic proposition.

We may be skipping breakfast but smoothies have shown that consumers still want their juice fix at some point and are prepared to pay a premium to drink it on-the-go or during other occasions.

The fact that drinkers are paying more for their juice would point to long-term prosperity for the overall juice category.

Sectors: Soft drinks, Water

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