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| SOFT DRINKS / JUICES |
| Executive Summary |
| Soft Drinks (Carbonated and Concentrated
The soft drinks market has shown underlying growth for many years but, in 1998, suffered a setback as a result of the poor summer weather. The total market was worth an estimated £6.6bn. Carbonates comprise by far the largest sector, accounting for 60.6% of sales value in 1998, while concentrates and ready-to-drink (RTD) beverages accounted for a further 11.7%. Other products are bottled water, juices and fruit drinks.
Colas dominate the carbonates sector, with sales worth £2.2m in 1998, and continue to increase their share each year. The flavour is intrinsically popular with adults and children and demand is driven by the battle for supremacy between Coca-Cola and Pepsi, which together accounted for 49% of the total carbonates market in 1998.
The companies responsible for Coca-Cola and Pepsi are also behind several of the leading fruit-flavoured carbonates. They include 7up (PepsiCo), Lilt and Fanta (both Coca-Cola), which are imported, and domestic brands such as Tango (Britvic), Irn Bru (AG Barr) and Lucozade (SmithKline Beecham).
The leading concentrates for home dilution are peculiar to the UK, led by squashes and cordials such as Robinson's and Ribena. RTD versions in single-serve packs have served to increase competition in the important impulse market for soft drinks.
The weighting towards the largest companies on the global stage -- Coca-Cola, PepsiCo and Cadbury Schweppes -- is stronger than ever and the activities of these companies will continue to dominate the UK market. However, a secondary tier of large bottlers is also emerging, led by Cott (of Canada) and Princes Soft Drinks (owned by Mitsubishi).
Heavy investment in marketing, including television advertising, is necessary for brands to gain and maintain shelf space in a market where multiple grocers are increasingly powerful.
The bulk of distribution for home consumption is through supermarkets, but the value of sales for consumption outside the home is relatively high.
Assuming there are few setbacks caused by poor weather, prospects for higher consumption are reasonably good. The market will continue to be driven by the multinationals, with their sophisticated and increasingly focused budgets for marketing, packaging and distribution strategies. Key Note estimates that total sales will reach £8bn by 2003, with carbonates and concentrates worth £5.85bn. |
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