Soft Drinks - A Pan-European Overview - April 2006

INTRODUCTION
Definitions
Carbonates
Bottled water
Juice and juice drinks
Consumer research
 ABBREVIATIONS
EXECUTIVE SUMMARY
 FRANCE
Steady growth
Declining alcohol consumption benefits soft drinks
Bottled water takes the lion’s share of volume sales
Figure 1: Indexed French volume and value sales of soft drinks, by sector, 2000-05
Fading of sectoral boundaries
Retail dominance
Figure 2: French volume and value sales of soft drinks, by distribution channel, 2005
Size matters in soft drinks shares
New product development in key position
Age dictates soft drinks choices
Figure 3: Preferred soft drinks, by age, 2005
Further growth expected
Figure 4: Forecast indexed French volume and value sales of soft drinks, by sector, 2005-10
 GERMANY
Trend towards healthier lifestyles shapes and boosts sales
While volume sales climb, market value remains static
Figure 5: Indexed German volume and value sales of soft drinks, by sector, 2000-05
Retail sales gain further ground
Figure 6: German volume and value sales of soft drinks, by distribution channel, 2005
Aldi own-labels challenge leaders Coca-Cola, Gerolsteiner and Eckes-Granini
New products provide added health benefits
Different drinks appeal to different age groups
Figure 7: Preferred soft drinks, by age, 2005
Volume sales to accelerate
Figure 8: Forecast indexed German volume and value sales of soft drinks, by sector, 2005-10
 ITALY
Sales return to growth after a dip in 2004
Figure 9: Indexed Italian volume and value sales of soft drinks, by sector, 2000-05
Highest per capita consumption in the world makes bottled water largest sector
Figure 10: Annual Italian per capita volume consumption of soft drinks, by type, 2000-05
All sectors move towards healthier products
Retail loses market share to Horeca
Figure 11: Italian volume and value sales of soft drinks, by distribution channel, 2005
Italy v world
Functionality and portability characterise new product launches
Further growth potential
Figure 12: Forecast indexed Italian volume and value sales of soft drinks, by sector, 2005-10
 SPAIN
Dynamic growth in an increasingly health-conscious market
Bottled water is the largest sector
Figure 13: Indexed Spanish volume and value sales of soft drinks, by sector, 2000-05
Colas lead the carbonates sector
Retail dominance
Figure 14: Spanish volume and value sales of soft drinks, by distribution channel, 2005
Local players challenge big multinationals
Health, functionality and premiumisation are buzz words in new launches
Spaniards are keen carbonates drinkers
Figure 15: Preferred soft drinks, by age, 2005
Further growth in sight
Figure 16: Forecast indexed Spanish volume and value sales of soft drinks, by sector, 2005-10
 UK
Health is a prime driver of demand
Premiumisation is a common factor
Overall growth is slowing
NPD also reflects concern for health
Ad spend shifts away from carbonates
Avoidance of alcohol accounts for growing number of consumers
Demographic trends favour further segmentation
MARKET DRIVERS
Cola and fruit juice have a younger consumer base than bottled water
Figure 17: Total population, by age, by country, 2005
Rising consumer expenditure supports sales of value-added products
Figure 18: Consumer expenditure, at current prices, by country, 2000-05
Increasing employment generates growth
Figure 19: Total in employment, by country, 2000-05
MARKET SIZE AND TRENDS
Germany is by far the largest market for soft drinks in Europe
Figure 20: Volume sales of soft drinks, by country, 2000-05
Figure 21: Volume sales of soft drinks, % share by country, 2005
Underdeveloped Spanish market sees strongest volume growth
Figure 22: Indexed volume sales of soft drinks, by country, 2000-05
Germany generates 44% of value sales…
Figure 23: Value sales of soft drinks, at current prices, by country, 2000-05
Figure 24: Value sales of soft drinks, % share by country, 2005
…but has been on a downward trend since 2003
Figure 25: Indexed value sales of soft drinks, at current prices, by country, 2000-05
UK lags behind in volume consumption in per capita terms
Figure 26: Annual per capita volume consumption of soft drinks, by country, 2000-05
German per capita expenditure double the European average
Figure 27: Annual per capita expenditure on soft drinks, by country, 2000-05
MARKET SEGMENTATION
Bottled water takes the largest share elsewhere, but UK consumers prefer carbonates
Figure 28: Volume sales of soft drinks, by sector, by country, 2005
Figure 29: Volume sales of soft drinks, % share by sector, by country, 2005
Carbonates take the biggest value share
Figure 30: Value sales of soft drinks, by sector, by country, 2005
Figure 31: Value sales of soft drinks, % share by sector, by country, 2005
DISTRIBUTION
Retail outlets account for 80% of volume sales
Figure 32: Volume sales of soft drinks, by distribution channel, by country, 2005
Figure 33: Volume sales of soft drinks, % share by distribution channel, by country, 2005
 CARBONATES
Figure 34: Volume sales of carbonates, by distribution channel, by country, 2005
Figure 35: Volume sales of carbonates, % share by distribution channel, by country, 2005
 BOTTLED WATER
Figure 36: Volume sales of bottled water, by distribution channel, by country, 2005
Figure 37: Volume sales of bottled water, % share by distribution channel, by country, 2005
 JUICE AND JUICE DRINKS
Figure 38: Volume sales of juice and juice drinks, by distribution channel, by country, 2005
Figure 39: Volume sales of juice and juice drinks, % share by distribution channel, by country, 2005
THE SUPPLY STRUCTURE
Carbonates is the most concentrated soft drinks sector…
Figure 40: Brands’ volume sales of carbonates, by country, 2005
Figure 41: % share of leading brand in volume sales of carbonates, by country, 2005
…while sales of bottled water and juice are highly fragmented
Figure 42: Brands’ volume sales of bottled water, by country, 2005
Figure 43: % share of leading brand in volume sales of bottled water, by country, 2005
Figure 44: Brands’ volume sales of juice and juice drinks, by country, 2005
Figure 45: % share of leading brand in volume sales of juice and juice drinks, by country, 2005
THE CONSUMER – SOFT DRINKS
Figure 46: Penetration and frequency of consumption of soft drinks, by type, by country, 2005
Women prefer bottled water and juice
Figure 47: Penetration of soft drinks among women, by type, by country, 2005
Men are more likely than women to drink cola carbonates
Figure 48: Penetration of soft drinks among men, by type, by country, 2005
Spaniards are frequent carbonates drinkers
Figure 49: Frequency of drinking cola carbonates, by country, 2005
Figure 50: Frequency of drinking non-cola carbonates, by country, 2005
Best potential to increase volume consumption of bottled water in GB
Figure 51: Frequency of drinking bottled mineral water, by country, 2005
Figure 52: Frequency of drinking flavoured water, by country, 2005
French and Germans are the most likely to drink juice on a daily basis
Figure 53: Frequency of drinking fruit and vegetable juice, by country, 2005
PROSPECTS
 FRANCE
More growth in carbonates
Bottled water benefits from good health credentials, but needs to target young consumers better
Increasing commodisation in juice and juice drinks
 GERMANY
Taste, health and convenience
Own-labels to peak, but competition remains hard
New EU regulations
New deposit regulations will produce further swings
Health and lifestyle positioning to have greatest appeal
 ITALY
Carbonates have to address needs of ageing population
Figure 54: Projections in Italian population, by age, 2006-10
Mature bottled water sector still inspired
Expanding consumption through snacking
Great potential in juice and juice drinks
 SPAIN
Bottled water will continue to boom
Continued pressure on carbonates prices
Figure 55: Projections in Spanish population, by age, 2006-10
Quality juices
 UK
Implications of demographic trends
Expenditure set to rise
Health and well-being will remain important
Alcohol consumption set to follow downward trend
On-trade sales will continue to drive growth
FORECAST
Germany and the UK are forecast to see the best growth
Figure 56: Forecast volume sales of soft drinks, by country, 2005-10
Figure 57: Forecast volume sales of soft drinks, % share by country, 2010
Figure 58: Forecast value sales of soft drinks, at current prices, by country, 2005-10
Figure 59: Forecast value sales of soft drinks, % share by country, 2010
 CARBONATES
The mature carbonates sector will see the smallest increase
Figure 60: Forecast volume sales of carbonates, by country, 2005-10
Figure 61: Forecast value sales of carbonates, at current prices, by country, 2005-10
 BOTTLED WATER
The underdeveloped UK market will record the most dynamic growth
Figure 62: Forecast volume sales of bottled water, by country, 2005-10
Figure 63: Forecast value sales of bottled water, at current prices, by country, 2005-10
 JUICE AND JUICE DRINKS
Germany set to remain by far the biggest juice drinking nation
Figure 64: Forecast volume sales of juice and juice drinks, by country, 2005-10
Figure 65: Forecast value sales of juice and juice drinks, at current prices, by country, 2005-10