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April 9, 2003

RESEARCH: Competition in beverage industry to intensify

Competition in the world's leading drinks markets is due to get fiercer according to a new report. Although the average consumer of commercial beverages accounts for only 186 litres a year, drinkers in North America, Australasia and West Europe now consume more than three times this amount and are well on the way towards the theoretical saturation point of 730 litres per capita, says the research group Canadean.

Competition in the world’s leading drinks markets is due to get fiercer according to a new report. Although the average consumer of commercial beverages accounts for only 186 litres a year, drinkers in North America, Australasia and West Europe now consume more than three times this amount and are well on the way towards the theoretical saturation point of 730 litres per capita, says the research group Canadean.


“The closer a region is to reaching this point,” said Canadean today, “the greater the need for individual beverage categories to take share from each other in order to expand sales.”


Soft drinks are making the running in the top three regional markets. The North American region has the highest rate of beverage consumption in the world at 597 litres. Soft drinks there now account for more than half of overall sales, having gained at the expense of hot drinks in particular, with packaged water contributing the lion’s share of the volume increase. Australasian soft drinks now amount to just over a third of the region’s beverage sales, overtaking hot drinks as the leading sector. Nearly half the incremental volume growth over the period 1997-2002 is due to carbonates, with packaged water contributing a further 37%.


West Europe’s soft drinks consumption has risen by more than three times the overall rate for beverages and claims a 40% share of the total market in the region. It has grown at the expense of milk, hot drinks and alcohol with packaged water once again in the driving seat.


Despite the importance of these markets the report emphasises that more than a third of the world’s beverages are consumed in Asia where a quite different picture emerges. Per capita consumption amounts to less than a fifth of that in the other three markets, and although soft drinks are the fastest growing sector their share of throat remains dwarfed by hot drinks. Asia’s largest national beverage market, India, leads its nearest rival China both in terms of per capita consumption and hot drink sales.


Indicating business opportunities, Canadean points out that soft drinks have soared ahead in China’s cities, leaving untapped potential in the nation’s rural areas. Meanwhile, product innovation throughout the region is being driven by an increasing link between diet and well being as exemplified by the nutraceutical (or functional) beverage concept pioneered in Japan.

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