May 11 - The British Soft Drinks Association's 2009 UK Soft Drinks Report highlights the challenges faced by the soft drinks industry in 2008 and its ability to maintain and grow soft drinks consumption through creativity, innovation and reliability.
Total soft drinks consumption held up in 2008, despite another wet summer and the credit crunch. Across all sectors, the market registered a 1% value increase and a marginal volume decline of 1.1% to stand at £13 billion and 13905 million litres respectively.
2008 showed that ever more complex consumers are varying their purchasing choices, weighing-up value, convenience and naturalness alongside refreshment and enjoyment. Functionality further asserted its presence on the marketplace in 2008 – sports and energy drinks reported a volume growth of 11% and enhanced waters grew by 21%.
Carbonates reported a volume increase of 1.7% in 2008 and still and juice drinks also saw another good year as retail sales increased by 0.8% to hit £1684 million.
Consumers’ focus on health and wellbeing, and a desire for naturalness benefited the not from concentrate fruit juice category with volumes up 10 million litres so that NFC juice now represents over 45% of the chilled juice segment. The overall retail value of fruit juice did, however, decline in 2008 (down 4% to £1900 million). Smoothies also suffered from the economic downturn – volumes fell by 20% although the category’s market share remained static at 5%.
On top of the poor weather and a declining economy dampening demand, bottled water had a challenging year in the media spotlight. Having witnessed core growth over more recent years, bottled water reported a decline for the second year running, 5.5% down on 2007 volumes. 2009 is likely to be another challenging year for bottled water and but it should return to growth in the longer term.
Commenting on the findings of the BSDA’s 2009 UK Soft Drinks Report, Jill Ardagh, Director General of the British Soft Drinks Association said: “It is encouraging to see that the soft drinks market is holding up during the economic downturn and after the legacy of two disappointing summers.
“Consumers are loyal to the drinks they know and trust but remain open to innovative products and brand extensions which meet their ever-evolving needs. The industry’s ability to provide the public with a wide range of enjoyable and affordable drinks will ensure it remains resilient despite the tough climate.”
With the green shoots of economic recovery not expected to push through until late 2009, soft drinks growth is not forecast to return until 2010. However, by 2013 the market could reach 14890 million litres, with per person consumption hitting 239 litres.