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As the mercury rises and the UK braces itself for yet another weekend of basking sunshine, it won't come as a surprise to see most of us will be reaching for a bottle of water.

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Okay, there may be a few beers sunk too, but for the soft drinks industry, not surprisingly, bottled water and dilutables appear to be the most popular choice when we’re parched.

The two categories are the winners in the UK during the summer months, according to beverage consultancy firm Zenith International.

Official figures show that the UK has experienced its hottest June this year since 1975, while the north-west has experienced its driest period since 1929, leading to the introduction of a hose-pipe ban in the traditionally rather wet region this week.

Once the UK has experienced a few consecutive weekends of sunshine, then, consumers expect the weather to continue and therefore look to stock up.

“If we see just the odd occasional warm weekend, [consumers] are not into the routine of feeling thirsty and therefore buying ahead. Once drinks are in the fridge, they are quickly consumed," said Hall. "So the last few weeks have been pretty good news for soft drinks.

“The first reaction tends to be in favour of carbonated soft drinks (CSDs) and still drinks. Then, when temperatures become even hotter, people consume proportionately more water. They also start to run out of money and buy more dilutables.”

Indeed, for the month of June last year, Highland Spring sold 30m litres of bottled water, the first month in the brand's history to break the GBP8m (US$12.1m) barrier.

And the firm told just-drinks last month that it hopes to break that record this year.

“That was a big month for us," said company CEO Les Montgomery. "We're on target at the moment to beat that but if the weather takes a turn for the worst then we won’t. But after nine days into June, we are on target to be better than June last year.”

Multiple retailer Asda, on the other hand, told just-drinks it has noticed a 33% uplift in sales for energy and sports drinks for the month of June as consumers are inspired by tournaments such as the World Cup and Wimbledon.

Likewise, Britvic said it has noticed a rise in sales for its Mountain Dew Energy drink and that sponsorship deals for its Robinson’s brand has helped drive sales.

“Sales of our new 600ml formats of low and no sugar carbonated brands, such as Pepsi Max, Diet Pepsi, 7Up Free and Tango, have been extremely encouraging and have been driven by exceptional visibility in the market,” said Murray Harris, sales director for Britvic.

“We are also very pleased with the launch of Mountain Dew Energy and we have received great feedback from our customers on initial sales. We’ve had a range of high-profile sporting promotions running across the summer that have featured on-pack, such as Robinsons sponsorship of Wimbledon. These have helped to raise consumer awareness of our brands and ultimately drive sales."

However, those dispersing clouds of recession may not yet have the silver lining we are all hoping for.

Leading economic body the Organisation for Economic Co-operation and Development warned this week that unemployment poses a serious risk to recovery in western countries.

Unemployment in the UK is likely to remain at 8% until at least the end of 2011, the OECD said in its annual employment outlook published on Wednesday (7 July).

Historically high unemployment levels, coupled with Government efforts to cut fiscal deficits in many western countries, could depress consumer confidence over the longer term and exacerbate the problems faced by drinks companies.

Nonetheless, soft drinks firms will be revelling in the news that the Met Office has issued a heat warning for the coming weekend, as temperatures are set to hit 31C in East Anglia and the south-east on Saturday.

So, the news will no doubt keep drinks firms happy for a while, anyway, and Highland Spring might not be the only bottled water company breaking sales records this summer.


Sectors: Soft drinks, Water

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