Britain may be renowned as a nation of tea drinkers - or indeed of beer drinkers - but a new report shows that with annual per capita consumption of 222 litres, the UK is in fact a nation of soft drink drinkers. And even the perennially poor summer weather failing to dent growth in the market last year.
The Zenith International report shows that UK soft drinks consumption rose by over 5 per cent in 2002 to 13.1 billion litres - or by 53 per cent over the past 10 years alone - giving the market an overall value of £10.2 billion (€14.8bn).
Carbonates form the biggest sector of the market as a whole - 48 per cent of total volume in 2002 - with colas alone accounting for 47 per cent of all carbonates. The launch of various brand extensions such as Diet Coke with Lemon, Fanta Fruit Twist and Pepsi Twist provided a major boost to growth in 2002.
If the carbonates sector was the biggest, it was nonetheless the still drinks market which achieved the highest percentage growth in 2002, the report claims, aided by the success of Robinsons Fruit Shoot and the relaunch of Coca-Cola's energy drink brand Powerade. Still drinks with 0-25 per cent juice content account for 6 per cent of the total market.
But bottled water also had a strong year, driven by increasing consumer demand for healthier and more 'natural' products. Bottled water has been the fastest growing sector in the UK soft drinks market for several years, and now has a 13 per cent volume share. The most significant contributions have been made by still, mineral and cooler water.
Dilutable squashes and other concentrates make up 24 per cent of the market in ready-to-drink equivalent, and these too had a good year, helped by the growing popularity of low sugar variants, which now account for 64 per cent of the total category.
Fruit juice/nectars was the only category which failed to achieve gains in 2002, but this was partly as a result of strong growth in the previous three years. Their share of the total market fell to 9 per cent as the market readjusted, but there were nonetheless strong performances from not-from-concentrate juices and cranberry drinks.
Gary Roethenbaugh, Zenith research director, said that innovation was, as ever, a vital element in driving sales across the soft drinks sector: "Innovation is key to sustaining interest in soft drinks and stimulating demand. This has been taken up by the major carbonated soft drinks manufacturers as they struggle to match the rise of bottled water and still drinks.
"Consumers are becoming increasingly sophisticated, searching for products that meet their own particular needs above and beyond simply quenching their thirst. Health benefits, functionality and uniqueness are all attributes that consumers are beginning to search for in their soft drink purchases."
In terms of leading players, the reports shows that Coca-Cola Enterprises is by far the biggest soft drinks company in the UK, with a 26 per cent share of 2002 volume sales. The next four companies are Britvic (12 per cent), Princes (9 per cent), Cott (6 per cent) and Gerber (5 per cent). The report also shows that 10 of the 2002 top 25 companies depend on own label for the majority of their sales.
As far as individual sectors are concerned, Danone Waters (which owns Evian and Volvic) is the biggest player in the bottled water market with 17 per cent of volume sales, while CCE dominates the carbonates sector with 40 per cent. Britvic also dominates its main sector, dilutables, with a 42 per cent share, while the Swiss group Gerber is the leader in both the fruit juice/nectars category (32 per cent) and the still drinks category (23 per cent).
And the growth is far from over, according to Zenith. The UK soft drinks industry should continue to see a steady advance in consumption during the next five years, climbing at an annual rate of 4 per cent to 15.7 billion litres by 2007, the report suggests.
"The soft drinks industry and what it offers to the consumer are definitely changing. No longer simply directed at children, soft drinks are playing an increasingly important and responsive role in our daily lives," Roethenbaugh said.
For details on how to order your copy of Zenith International's 2003 Soft Drinks Report, click here.