Poland's thirst for soft drinks shows no sign of slowing, with consumption exceeding 5 billion litres in 2002, according to a new report from beverage industry analysts Canadean. Poland's consumption of soft drinks has now increased by a staggering 145 per cent in the last decade, the report claims.
The popularity of the sector is further underlined by the fact that its share of all commercial beverages consumed has risen from just 18 per cent in 1993 to almost 30 per cent in 2002, Canadean added.
With a population exceeding 38 million, Poland offers one of the largest markets in Eastern and Central Europe. Although the economy is weak, with around 18 per cent unemployment, significant investment is being put into improving the retailing infrastructure, not least by a number of western companies such as Tesco and Ahold entering the market. In 2002, the number of supermarkets/hypermarkets and discount stores increased by 24 per cent and 15 per cent respectively.
Unlike many countries in western Europe, where soft drink sales last year were badly hit by poor summer weather, the Polish soft drinks sector was boosted by an exceptionally long and hot summer in 2002. While every product sector saw gains, still drinks registered the greatest percentage increase - nearly 20 per cent up on the previous year.
Due to the high rate of unemployment, Polish consumers are very price conscious. With very competitive prices and wide availability, still drinks are perfectly positioned to take advantage of this attribute. The domestic still drinks market is dominated by local brands, with the top three alone accounting for nearly half the market. Canadean predicts that the sector will continue to flourish in 2003 with a continuing healthy growth rate.
Juice and nectars also grew strongly, helped by the launch of a number of economy products in 2001/2002 and significant marketing support from the producers. The largest sector, though, is packaged water which accounts for over 30 per cent of all soft drinks consumed.
Eastern promise attracts plenty of admirers
Due to the size of the population and the rate at which consumption is increasing, the soft drinks potential offered by Poland is considerable. Although per capita consumption is above the eastern European average, it is still some 40 per cent below that of western Europe, providing plenty of room for further growth.
Financed by international organisations and Polish banks, merger and acquisition activity is widespread. Last year, the Enterprise Investors Fund acquired a 90 per cent share of Agros-Fortuna (owner of the Fortuna and Tarczyn brands). As the same Fund also owns a stake in Sonda (Sonda and Garden brands), a merger between the two companies remains a distinct possibility.
Meanwhile, Maspex's acquisition of Multivita has strengthened the company's presence in the packaged water arena (although Multivita has subsequently been bought by Coca-Cola, a deal still subject to approval by the Polish authorities).
Being the leading sector, packaged water has also attracted the interests of multinational giants such as Danone and Nestlé. Danone only entered the market two years ago but has already acquired over 16 per cent of the packaged water market through an 88 per cent holding in Zywiec Zdroj, and a joint venture with San Benedetto, Polska Woda. The report predicts that consolidation will intensify across all sectors.
For more details of Canadean's soft drinks market reports, click here.