just the Facts - The Russian soft drinks market
Carbonates accounts for around 39% of Russia's total soft drinks market
Last week, PepsiCo agreed to buy 66% of Wimm-Bill-Dann (WBD) for US$3.8bn in a move that will make PepsiCo the largest food and beverage group in Russia. Here, we take a look at the Russian soft drinks market with the help of Datamonitor's Soft Drinks in Russia report and Business Monitor International's Russia Food and Drink Report 2010.
- Russia accounts for 10.5% of the European soft drinks market value, according to Datamonitor. The country's soft drinks market grew by 6% in 2009 to reach a value of US$12.98bn. In volume terms, the market grew by 4% to 14.39bn litres. By 2014, the Russian soft drinks market is expected to have a value of $16.94bn, an increase of 30.4% on 2009. Volume is forecast to climb 21.3% to 17.45bn litres.
- Carbonates accounts for around 39% of Russia's total soft drinks market. As the largest segment, CSD sales proved the most lucrative for this market in 2009, generating total sales of $5.1bn. In comparison, juices generated sales of $3.6bn last year, equating to 27.6% of the market's total sales, according to Datamonitor.
- The Coca-Cola Co was the leading player in the Russian soft drinks market as of last month, according to Datamonitor, with a 23.3% share of the market's volume. PepsiCo accounted for a further 13.6% of the market. However, if the $3.8bn Wimm-Bill-Dann deal is approved, PepsiCo will become the largest food and beverage company in Russia by net sales and it will leapfrog its old foe in Russia's juice market. A combined WBD, PepsiCo operation is expected to account for between 40% and 50% of juice sales by volume in Russia, according to varying analyst estimates.
- The local Pepsi Cola bottler for Russia is the US-based PepsiCo Bottling Group (PBG). Brands sold in Russia include Pepsi Cola, Mirinda, Irn Bru, Gatorade and Adrenalin Rush energy drinks, Aqua Minerale and Tropicana. In comparison, the local Coca-Cola bottler is Coca-Cola HBC Russia, which operates around a dozen bottling plants in the country. Brands available in Russia include Coca-Cola, Fanta, Sprite, Fruktime (a low-cost CSD), Schweppes, Minute Maid and BonAqua, according to Business Monitor International.
- Players in the Russian soft drinks market try to distinguish their products to some extent by stressing their health benefits - particularly for juices and functional drinks - and taste, Datamonitor notes. However, a new trend has emerged, which is seeing players move away from the main target of young people and focus instead on all age groups. This, together with the expected shift towards healthier drinks such as 100% fruit juices and smoothies, has enhanced the chances of new players entering the market and competing against more established brands.
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