Health and value focus gives boost to soft drink sector

Posted by Daniel Palmer on 12th May 2009

The soft drink sector in the UK has shown resilience to the recession, with a marginal 1.1% decline in volumes last year as convenience, health and value trends ensure strong demand.Carbonates continued to claim the largest share, according to the research from Zenith International, increasing to 42.7% of volume. Still drinks also advanced their share to 8.5%, while dilutables in ready to drink form dipped slightly to 23.4%. Steeper declines were recorded by bottled water and juice/nectars, their shares dropping to 14.8% and 10.6% respectively.

“In addition to health, wellbeing and convenience, concern for the environment and ethical trading have become more important in shaping the UK soft drinks market,” commented Zenith’s Market Intelligence Director Gary Roethenbaugh. “The economic downturn, however, made consumers much more price conscious, with affordable carbonates achieving positive growth, whilst some more premium items such as smoothies fell back.”

Based on research conducted in conjunction with the British Soft Drinks Association (BSDA), other findings of the 2009 Zenith Report on UK Soft Drinks included:

* Value for money was the main driving force influencing consumer buying decisions in 2008, followed closely by health, wellbeing, convenience and indulgence.
* Innovation initiatives rose by 8%, with 135 new products, brand extensions and redesigns recorded during the year.
* Whilst natural refreshment continued to be at the core of the industry’s momentum, consumer demand for tasty treats led to a resurgence in carbonates, with volumes rising 1.7%.
* Promotional activity by brand owners and retailer own labels helped chilled not from concentrate juice maintain growth.
* The top five companies raised their combined share of consumption to 65%.

By 2013, Zenith anticipates that soft drinks volumes will grow by about 7%, as still drinks, dilutables and bottled water contribute to above average growth.