Alongside our daily news coverage, features and interviews, the Just Drinks team again rounds up the week‘s top stories with a series of data snapshots.
India’s bottled-water market was in the spotlight after one of the country’s brand owners attracted investment.
Meanwhile, in Europe, there was M&A among brewers in Switzerland and some better signs on inflation in the UK.
Staying in the UK, we interviewed soft drinks and mixers maker Fentimans about its brand positioning, consumer confidence and the trends shaping the soft-drinks sector.
India’s Energy Beverages bags multi-million investment
India-based bottled-water producer Energy Beverages announced investment of Rs450m ($5.4m) from private-equity group JM Financial.
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The Mumbai-headquartered investor is now a minority shareholder in the group, Energy Beverages, the owner of the Clear Premium Water brand, told Just Drinks.
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By GlobalDataIn a statement, Darius Pandole, managing director and CEO of private equity at JM Financial said: “The Indian bottled water market is highly under-penetrated and fragmented and we are witnessing a structural shift in consumption from the unorganised to the organised market, owing to factors like hygiene, and a general rise in health awareness in a post-Covid world.
Energy Beverages, which is based in Changodar, a town south of Ahmedabad, plans to use the funds to support its expansion and distribution “across the nation”. More specifically, the investment will go towards “brand building initiatives” and improving the company’s “existing capacities” and distribution network.
According to a quarterly forecast on the category issued by GlobalData, Just Drinks' parent company, in February, volumes dropped 3.6% in the final three months of 2023 amid demand for bulk products.
However, the company's analysts insist the outlook is bright. "The category’s volume will rise by 8.1% annually in 2024, with tourism growth playing a key role. The increase in consumer awareness of the benefits of healthy hydration will also support the category’s performance in 2024. Promotional campaigns and the strong distribution networks of leading players will further enable growth," they wrote.
"The category’s volume will grow in the long term. Rising summer temperatures will increase the need to stay hydrated and push up demand for packaged water. Television campaigns and promotional activities by companies will also fuel the category’s volume growth."
UK grocery inflation cools
While food and soft drinks prices in the UK remain historically higher at 5%, they are heading in the right direction, easing the household burden somewhat.
Grocery prices for those categories have now cooled for 11 consecutive months, reaching the lowest annual rate in February since the opening month of 2022. That brings more relief from the lofty peak of 19.2% hit in March last year, which by Office for National Statistics (ONS) records was the highest in more than 45 years.
The ONS said: "Prices have been relatively high but stable since early summer 2023, rising by less than 2% over the nine months between May 2023 and February 2024. This compares with a sharp rise of around 22% seen over the previous 14 months between March 2022 and May 2023."
Karen Betts, CEO at UK industry body the Food and Drink Federation, said the further cooling in the annual rates is promising and “reflects prices stabilising across food and drink supply chains, including energy, alongside manufacturers’ continued and sustained efforts to keep prices down for shoppers”.
She added: "Food and drink price inflation should continue to ease in the coming weeks. But some underlying factors are acting against this, from rising labour costs to erratic weather patterns, like this winter’s heavy rainfall across the UK which is impacting agricultural crop yields.”
Swiss beer market set for growth
Some good news this week for fledgling Swiss brewer Chopfab Boxer, which found a new owner after a challenging period.
Larger local peer Locher has become the majority shareholder of Chopfab Boxer after it was “on the verge of going out of business”.
Alongside a handful of external parties, Locher “successfully implemented the necessary renovation measures” after a “call for help” from the brewer based in Winterhur, Zürich. Financial details were not disclosed.
Chopfab Boxer, established in 2012, produces craft beer brands Chopfab, Boxer and Cosmos having subsequently merged with French-speaking Swiss brewery Bière du Boxer.
Family-owned Locher said Chopfab Boxer had achieved a “market share of around 3% with rapid growth in a competitive environment” but struggled due to Covid, soaring energy and raw material prices and rising interest rates.
The country's beer market looks set to see mid-single-digit growth in sales by value into the 2020s, according to forecasts from GlobalData.
Should those estimates come to pass, they would represent a pick-up from a more challenging period in and around the start of the decade.
Optimism at Fentimans
Fentimans is a UK-based manufacturer selling “premium” soft drinks and mixers, with its “botanically brewed” products ranging from Curiosity Cola to its Connoisseurs Tonic Water.
According to the company’s most recent publicly-available accounts (which cover the calendar year 2022), just under half of the privately-owned group’s turnover is generated in the UK, with the US alone accounting for approximately 10% of gross sales.
Fentimans saw its top line recover in 2022 to pre-pandemic levels but indicated the pressure on consumer spending sparked by high inflation “certainly impacted demand” during the year. Profits were lower in 2022 than in 2021.
The brand looks to leverage an old-fashioned British aesthetic in its packaging and, although yet to publish its 2023 accounts, is upbeat about its prospects.
Just Drinks sat down with Jayne Andrews, Fentimans’ marketing director, to discuss the company’s brand positioning, consumer confidence and the trends shaping the soft-drinks sector.
