Still drinks are currently expanding sales
on the world scene faster than their main
competitors and are expected to improve
their situation even further over the medium
term future, says a new report.
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In its annual look at the global still
drinks market, beverage industry analyst
Canadean shows that consumption is expected
to rise 6% this year, bringing volume to
22.4 billion litres. Predicted growth rates
until 2005 will then continue to be higher
than those for still drinks’ leading rivals
juice/nectars and carbonates, although below
those for packaged water, iced tea/iced
coffee and sports/energy drinks.
Despite an ill defined profile, partly
due to the practice in some markets of not
declaring the juice content on the packaging,
still drinks are said to offer considerable
potential for development due to their enormous
range and diversity. Low cost products (with
little or no juice content) sit at one end
of the category spectrum, while more expensive,
branded drinks, frequently highly innovative,
occupy the other end.
Orange is the single most popular flavour,
with around a quarter share, but the sheer
size of the ‘other flavours’ segment is
indicative of the plethora of fruit and
non-fruit still drinks available. The wide
appeal of the category is seen as an opportunity
for producers to enhance or fortify their
drinks to deliver nutritional and other
benefits, say Canadean, while new entrants
will increase the range of products even
further by adding to the number of ‘cross-over
beverages’, i.e. those which contain elements
of more than one traditional category.
Canadean believes that since the per capita
consumption of still drinks worldwide is
currently running some 1.5 litres below
the level for juice and nectars there is
scope for growth in the sales of existing
and new products, while the fragmented nature
of the industry also creates opportunities
for companies to expand sales organically,
through joint ventures and acquisitions.
Sales by the multinationals are at their
strongest in North America and West Europe.
In the North American market, which equates
to around one third of world volume, the
top three companies Coca-Cola, Cadbury Schweppes
and Procter and Gamble account for half
of sales. Elsewhere, however, most producers
operate at a national or at best regional
level. In Asia, for example, which in volume
terms is almost as large as North America,
the international presence tends to be weakened
by the relatively low entry costs for new
players and the short lifecycles of what
are generally inexpensive products.
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