RESEARCH: Asia remains untapped for sports and energy drinks

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Although Asia accounts for nearly half of the world's sales of sports and energy drinks, the region as a whole remains one of the most underdeveloped markets in the industry, according to new research.

Asia contains five out of the top ten markets in terms of sales per capita, however the categories still have a weak presence in a number of countries, says a new report by industry analyst Canadean.

According to the research, Japan now takes two fifths of the region's volumes and has the world's highest per capita consumption at 15 litres. However China's volumes are merely a third of the size of Japan's with consumption per capita at merely half a litre. Furthermore, India has minuscule sales, while volumes in Pakistan are too small to even be reported.

Indonesia, on the other hand, has seen growth averaging at 24% a year since 1996.

Combined with North America, Asia accounts for more than four fifths of global volume, a situation that is not expected to change in the medium term future, although the most dynamic growth rates will be seen in the Middle East/North African region, where markets are small by international standards. As has always been the case, sports and energy drinks remain high value, low volume products and although worldwide sales are predicted to exceed 11 billion litres by 2005, per capita consumption will remain small at just 1.5 litres.

It is also American and Asian companies that take the largest share of sales on the world's markets. Quaker Oats (producer of Gatorade sports drink), owned by Pepsi-Cola since late 2000, is the strongest international company and estimated to account for nearly a third of world sales by virtue of its dominance in the Americas. Coca-Cola, the second largest company with around 15%, last year relaunched Powerade, backed by significant investment, onto its most important markets; Australasia followed by Asia and North America.

Japan's Otsuka (manufacturer of Pocari Sweat sports drink) is the largest single player in Asia and the only other company to hold more than 10% of the global market.

Canadean said it believes, "both the sports and energy categories will remain dynamic in coming years as the leading brands establish themselves in more markets. Currently sports drinks hold some three-quarters of the world market while energy drinks lead in East Europe and Middle East/North Africa.

"Sports drinks manufacturers must continue to appeal to consumers away from the sports field and maintain loyalty in the face of competition from other products. Energy drinks are, however, increasingly expected to gain support beyond their current young customer base. The manufacturers' challenge will be to appeal to the older consumer while still attracting each successive group of young purchasers and not losing them to a new fashionable product."

Companies: PepsiCo

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