Growth rates in the East European market for soft drinks are now outstripping those in the West by a factor of four, according to the latest report from beverage industry analysts Canadean.
Estimates for 2002 indicate that East European volumes grew by more than 5 per cent in the final quarter and nearly 9 per cent during the year as a whole; in the west, the figures were 1.3 per cent and 2 per cent respectively.
The volume gap between the two regions is also closing, said Canadean, with West European sales falling from four times those of East Europe in 1997 to only three times last year.
The report, East Europe Quarterly Soft Drinks Review, shows that while carbonated soft drinks (CSDs) remained the biggest sector of the total East European market last year, by far the best performance came from the packaged water segment. There was also strong growth in the much smaller juice and nectars sector, which gained 14 per cent overall.
For the coming year, growth rates are likely to be maintained, if not increased, although they will vary greatly among the five largest volume markets: Russia, Poland, Turkey, Czech Republic and Ukraine.
Russia's new found political stability and a generally improved economic performance are expected to raise consumer demand by a massive 18 per cent, with carbonates and packaged water reaping most of the benefit. Above average summer temperatures could also boost sales for the same two categories on the Polish market, but will not enable total soft drinks volume to increase by more than four per cent, the report predicts.
Ukraine, on the other hand, is looking forward to overall growth of around 13 per cent in 2003 with both packaged water and carbonates sales experiencing double digit increases, while Turkey is the only major market in which carbonates sales are likely to grow faster than those for packaged water, with flavoured soda possibly rising by as much as a half. Sports and energy drinks could also double as a result of strong performance by Coca-Cola's Powerade, a relaunch by Isostar and the entry of PepsiCo's Gatorade. None of this will, however, help lift total sales more than three per cent, Canadean said.
The lowest growth in the year ahead is expected to be registered by the Czech Republic, coming in with only 2 per cent. The spectacular packaged water increases of recent years are now slowing, the report claims, although carbonates are likely to recover some ground thanks to a number of new launches including Pepsi Blue.
Looking at East Europe as a whole, Canadean believes that for 2003 total soft drinks performance will be comparable to last year. Much of the incremental volume will come from packaged water, while carbonates will again find their primary growth impetus in the 'other non-fruit flavours' and clear lemonade segments. Juice and nectars, meanwhile, will improve on 2002's successes by rising a further 15 per cent.
Further details on The Soft Drinks East Europe Quarterly Review can be obtained by emailing Canadean.