None of the leading players on the world carbonates market can afford to take their eyes off the ball in the face of increasing competition, says a new report by beverage industry analysts Canadean.
The three main multi-nationals, who already account for more than three quarters of world carbonates sales are having to face up to slowing growth rates in this category, as well as increasing opposition from distributors' own brands and the rising popularity of other soft drinks categories.
The forecast average annual growth rate of just below 2 per cent for carbonates over the medium term is little more than half of that for juice and nectars, and well below the increases predicted for packaged water, still drinks, iced tea/iced coffee and sports and energy drinks.
According to the Canadean report, Coca-Cola, Pepsi-Cola and Cadbury Schweppes are adopting a two-pronged approach to the problem. As well as strengthening their core businesses by extending the flavour ranges of their carbonated drinks, with for example, exotic fruits once only found in nectars and still drinks and new introductions such as Vanilla Coke and Pepsi Blue, the three multi-nationals are also expanding their portfolios by developing low priced, good quality non-carbonated soft drinks aimed at regional markets where consumers may be unable to afford their main brands.
On the retail front, the report indicates that major international players are taking their best practices with them, but adapted to suit the local market, as they seek to expand around the world. It is predicted that distributors' own brands will continue to expand and are even starting to make headway in countries like China, where modern supermarketing is in its infancy.
The report also provides a broad overview of the world market and takes a detailed look at eight regions and 83 individual countries with sales forecasts up to 2005.The complex nature of business opportunities in the carbonates sector is highlighted by the fact that although global consumption currently amounts to 177 billion litres (just below 29 litres per capita) the top ten markets in fact constitute nearly two thirds of all consumption.
Despite the fact that the US is the world's largest consumer in both volume and per capita terms the Central and South American region is expected to contribute a quarter of the additional 10.4 billion litres of volume projected for the next three years, approaching three times the level of growth of its more mature North American neighbour.
A further 50 per cent of this incremental growth is forecast to come from Asia and Europe combined. Although sales in East Europe, which is now the most dynamic region, will continue to increase at around twice the rate of West Europe, growth has decelerated due to economic factors.
For further details on The Global Carbonates Report 2002 please contact Rob Kay-Shuttleworth on Tel: +44 (0) 1256 394224.