Informe Bebidas

Healthier outlook for beverages

June 2015
1|Page
Healthier outlook for beverages ................................................. 3

Market Size ............................................................................ 3
Carbonates ............................................................................. 3
Packaged Water ...................................................................... 4
Juice and juice drinks ............................................................... 5
Other products ........................................................................ 6
Market dimensions................................................................... 6
EU: Soft drinks consumption .................................................... 13
EU industry profile .................................................................. 17
Exports and imports................................................................ 19
Consumption trends by subsector ............................................. 23
Consumer prices .................................................................... 29
Other major markets: USA and China ....................................... 30
USA ...................................................................................... 30
China .................................................................................... 40
Company Activity ................................................................... 45
International .......................................................................... 45
PepsiCo ................................................................................. 45
Coca Cola .............................................................................. 48
Nestlé ................................................................................... 51
Danone ................................................................................. 53
Red Bull ................................................................................ 55
Major markets, other leading producers .................................... 56
France................................................................................... 56
Orangina ............................................................................... 56
UK ........................................................................................ 57
Britvic ................................................................................... 57
Nichols .................................................................................. 58
AG Barr ................................................................................. 59
Princes Limited ....................................................................... 59
Italy ..................................................................................... 60
Davide Campari-Milano ........................................................... 60
Other .................................................................................... 61
Grupo Leche Pascual / Calidad Pascual ...................................... 61
Conclusions and projections ..................................................... 62
Market size projections, 2015 onwards ...................................... 62
2|Page

Market Size
The market for soft drinks and water covers all ready to drink products,
including carbonates (carbonated soft drinks or CSD’s), non-carbonated
drinks, fruit juices, nectars, dilutable squash, flavored and mineral waters,
and cold RTD (ready to drink) tea and coffee mixes, but not flavored milks.
These are global markets but the distribution of consumption shows major
differences by country.
The global carbonates market is dominated by three major players, all US

based; Coca Cola, PepsiCo and Dr. Pepper Snapple. These operate through
their own production plants but also through independent bottlers, to
whom they sell flavored syrups.
Their business model is not found in other sectors and seems to derive
from the US tradition of soda-fountains, which meant that a carbonates
company did not have to truck finished products long distances. This also
contributed to the rapid development of this market across the USA, which
remains the largest overall and the highest consumption in the developed
world. Soda fountains were not a tradition in Europe or other territories,
but the ‘syrup to independent bottler’ model was adopted anyway.
Most carbonates companies are also involved in juices and juice drinks.
Recent acquisitions by the major companies have been in juices, ‘health’
drinks and sports or ‘energy’ drinks, but also in water and still products.
PepsiCo is also a global snacks company (FritoLay etc).
Carbonates
Carbonates have come under fire as concerns have grown over obesity
generally, and specifically among young people, who are the highest
consumers. The US industry has responded by agreeing to remove full-
sugar versions from vending machines in schools.
Since the last edition of this report in 2009, carbonates and their relation
to obesity have developed an even higher profile, with attention on
3|Page
sweeteners such as high-fructose corn syrups (HFCS). Low calorie versions

have been growing in Europe and, to a lesser extent, in the USA, but are
still only about a third of sales.
One problem has been the perception of artificiality around aspartame or

Ace-K, the main intense sweeteners used, but recently stevia, a plant-
derived extract, has been introduced in some formulations, although a
bitter after-taste is still a factor. However, there is also some evidence of a
trend towards ’natural’ formulations using sugar, while ‘energy’ drinks may
be high in sugar, caffeine and ingredients such as taurine (the active
ingredient in Red Bull).
Carbonates were a rapidly developing market in China

but recently growth seems to have slowed, in favor of
mixed fruit drinks and locally-produced branded RTD
drinks, including cold tea mixes. Growth in China in
general is being affected by their (relative) economic
slowdown.
Carbonates are a target for health regulators, in terms

of limiting overall calorie delivery as well as labelling for
sugar. The first sugar tax in the Americas is being
introduced by Mexico, specifically to target high local
use of carbonates and high local obesity rates.
Packaged Water
The global bottled water market has entries from carbonates companies,
but the branded market is dominated by Danone and Nestlé.
Bottled water is still growing in Europe despite consumer concerns over

price and sustainability, and to a lesser extent in the US, and is still a
rapidly developing market in emerging territories. China is now thought to
be the biggest single market.
Bottled water outsells carbonates by volume across most of Europe, but is

a much smaller proportion of the market in the USA, where carbonates are
4|Page
dominant. Bottled water has historically been lower value than CSD’s.
‘Water plus’ formulations with added vitamins, minerals or flavorings (but
not sugar) are being developed as ‘plain’ water is less marketable in
developed countries, but this is still a smaller part of the market.
Juices and juice drinks

Fruit juices and nectars are a small volume but high value market. The
dominant flavor in both Europe and the USA is orange, about half the
market, followed by apple. Other flavors popular in Europe are mixes of
fruit juices, or vegetable juices such as carrot or sauerkraut. Locally
important fruit crops such as apricots, blackcurrants, rhubarb or
lingonberries are also made into juices.
As a high-priced product, fruit juices are exposed to changes in consumer

incomes, and the recent drop in consumption in both the USA and Europe
has been marked.
Orange juice, whether frozen concentrate or non-frozen, is a major item of

trade. Both the USA and Europe are major importers: the world’s largest
producer is Brazil, followed by Florida. Prices can be very volatile, as the
crop is susceptible to frost and disease. China is rapidly developing its own
citrus growing industry for both fresh fruit and juicing, in response to
growing sales.
Tropical fruits for juice such as pineapple, and citrus

fruit like lime, are almost all imported in both the USA
and Europe (although there is a pineapple business in
the Canary Islands, a Spanish territory). However, the
USA also imports apple juice, predominantly from
China. Fashionable juices like pomegranate, acai or
koji berry are all imported in Europe, and
predominantly so in the USA. However, the USA (and
Canada) is the global supplier of cranberries.
Fruit juices have started to come under medical

scrutiny, because they are generally high in sugar,
5|Page
even if the sugars are natural. Giving fruit juice to children, whether
diluted or not, is now not recommended, both because of the sugar
content and the effect on children’s teeth (from both sugar and fruit acid).
Parents who were trying to substitute ‘healthy’ fruit juices for soft drinks
are now recommended to only give water.
Other products
In Europe, some sectors have a strong national profile but almost no
demand outside; Spain and Italy have a tradition of nut-based drinks
(almond milk, Spanish ‘horcha’), while some markets offer drinks
combining fruit juices with dairy products (excluding flavored milk or
drinking yoghurt).
Regional specialties like kvass and kefir are popular in

Germany and Austria but not much found elsewhere,
although kvass has been launched in China as ‘liquid
bread’.
Soy and rice ‘milk’ products are not included in this sector
so far, as no formulation has become popular as a soft
drink option in developed markets. However these, and
nut products, are worth keeping in mind. The latest craze
to hit New York, for example, is ‘coconut water’ based on
products popular in India and the Philippines, while
watermelon is tipped as a future specialty flavor. All such
unusual flavors are limited, however, by the availability of
raw materials on a global basis.
Market dimensions
In production terms, the most valuable sector in Europe is soft drinks,
where Germany, France and the UK have substantial businesses, and are
also production centers for the international carbonates companies. Mixed
drinks including dairy fat (e.g. mixed juice and milk or RTD coffees) rank
third, a head of juices.
6|Page
Production data from Eurostat shows increasing volumes overall. Some,

such as the 2009 mineral waters figures, are estimates. The change in
2013 may be down to better reporting. Overall, internal EU production
values have increased.
Production, EU 27, volume and value by sector, 2013

2009 2013 2009 2013
000 tons EU m
Soft drinks 35,199 37,600 17,005 22,800
Mineral waters 45,000 60,000 9,458 12,000
Drinks, + dairy fat 12,769* 13,249 12,797 10,114
All juices 8,685 8,765 6,908 7,343
Drinks, inc dairy fat 1,073 1,167 1,120 1,110
‘Other’ waters** 6,848 7,030 811 809
*Innova Estimate
** Mineral waters and mixes which do not meet EU mineral water
regulations.
Source: Eurostat, Innova Market Insights
Overall, the value of production of soft drinks and mineral waters has risen
between 2009 and 2013, but production value of juices and mixed drinks
has fallen.
The billon-euro production markets are Germany, the UK, Austria and
France in soft drinks: France and Italy in mineral water (and probably
Germany): Germany and France in packaged fruit juice: and Spain, Italy
and Germany for other mixed drinks (diluted juices, horcha, sauerkraut,
kvass etc).
Value of production is not necessarily a good indicator for ultimate market

size as the value of production per liter may vary markedly by type of
product (e.g. comparing Coca Cola to pineapple juice): imports may have
a significantly higher or lower price per liter than home production.
7|Page
Volume production of soft drinks has been growing, and Germany has now
overtaken the UK as the largest production area in Europe by value.
Germany and the UK produce almost half of European volume output.
However, the growth in volume is considerably less in 2013 than growth in
value.
There appears to have been reorganization in major soft drinks

manufacture in central Europe: Austria, a relatively small market, is a
major producer, presumably for supply to Germany, as well as other
adjacent territories.
Soft drinks production is largely within the major consuming markets

although Poland, Romania and the Czech Republic now also have
significant industries. Austrian production has risen sharply, suggesting the
relocation of a factory rather than increased demand. Italian production
has fallen sharply, also suggesting a factory change rather than demand.
The top four markets account for nearly two-thirds of European volume,
and all show some growth.
8|Page
Production, soft drinks, major markets 2009 - 2013

2009 2013 2009 2013
000 tons EU m
Germany 8,562 9,021 3,371 4,666
United Kingdom 6,593 7,162 3,449 4,118
Austria 778 1,983 402 3,037
France 4,595 4,420 2,903 2,771
Poland 2,881 2,919 746 1,029
Italy 1,157 731 671 677
Denmark 535 590 519 606
Sweden 666 786 388 521
Romania 1,741 1,389 524 489
Finland 342 493 279 431
Hungary 801 725 334 331
Czech Republic 1,113 903 238 214
Bulgaria 503 487 172 160
Croatia 255 244 176 138
Spain 242 118 45 40
Netherlands 1,418 2,102 718 n.a.
Belgium 1,018 n.a. 877 n.a.
EU27TOTALS 35,199 37,600 17,005 22,800
Source: Eurostat, Innova Market Insight
Mineral water, both aerated and still, but unflavored is the second largest
sector by production value, showing a rise since 2009. By volume, water is
the leading sector, showing that although this is an added-value bottled
product, prices per liter are lower than can be achieved on carbonates or
juices. Italy produces over a quarter of European volume. Volumes for
most producers have been stable or risen substantially since 2009.
In ‘other water’, packaged water not made to EU mineral water

specifications, France is the primary producer, but Spain is growing. Every
European country has some production, and it is notable that countries like
Poland and Romania are also significant producers.
9|Page
No figures are quoted by Eurostat for Germany for mineral water or mixed
non-alcoholic drinks for confidentiality reasons, but the scale of the market
suggests they are the main producer of unspecified volumes/values in the
EU 27.
Production, mineral waters, major markets 2009 - 2013

2009 2013 2009 2013
000 tons EU m
Italy 14,551 16,489 2,151 2,237
France 5,762 6,386 1,879 2,218
Spain 6,112 5,667 1,271 844
Poland 2,701 3,273 327 415
United Kingdom 815 1,601 251 393
Romania 1,374 1,616 203 254
Austria .. 887 .. 198
Hungary 1,063 1,279 115 128
Czech Republic 323 368 53 64
Netherlands 276 0 62 63
Bulgaria 378 377 62 57
Finland 61 68 45 56
Croatia 209 182 62 52
Germany*
Belgium*
EU27TOTALS 45,000 60,000 9,458 12,000
*Not disclosed, likely to be the main producers of production not
separately specified
Non-alcoholic mixed drinks are now the third largest sector which covers
many nut-based and national specialties in Spain, Germany and Italy as
well as drinks from mixed fruits and water.
10 | P a g e
Production, non-alcoholic mixed drinks, no dairy content, major markets

2009 - 2013
2009 2013 2009 2013
000 tons EU m
Spain 5,227 4,789 4,444 5,231
Austria 174* 369 172 2,197
Germany .. 2,712 1,640 1,507
Italy 2,890 1,668 1,631 1,349
France 956 811 807 946
Netherlands 418 226 232 394
Poland 989 1,357 437 336
Czech Republic 680 526 202 308
United Kingdom .. ,, .. 63
Sweden 56 33 37 63
Belgium .. 234 202 0
EU27TOTALS 12,769 13,249 10,114 12,797
*17,405 as reported by Eurostat, probable error, also impacts EU 27 total
for 2009: 30,000 unamended
Orange juice is by far the largest single juice flavor in

the EU: apple juice is third and has been growing, but
mixed juices (such as pomegranate and blueberry)
have been growing while EU production of pineapple
and other tropical or minor juices remains small.
11 | P a g e
Production, EU 27 juices, production by sector

2009 2013 2009 2013
000 tons EU m
Unconcentrated OJ 2,839 2,838 2,146 2,166
Mixed juices 1,954 2,105 1,828 1,988
Apple juice 1,810 1,924 1,116 1,520
‘Other’ fruit juice 1,364 1,087 1,318 1,031
Pineapple juice 231 307 170 221
AO citrus 244 244 134 161
Frozen unconcentrated OJ 100 140 80 150
Grapefruit juice 143 120 116 106
Production of packaged fruit juice occurs across Europe: as noted, a lot of

orange juice is imported, both frozen and unfrozen. As the largest market,
Germany is by far the biggest packer. Italy and Spain are juice producers
as well as importers of juices.
Germany is also the dominant packer of apple juice, at nearly half the EU
27’s production, and for mixed fruit juices. Italy is the major producer of
‘other’ fruit; which will include products like apricot and cherry.
Volumes of production in 2013 show a decline across the EU, this being
marked in Austria, and also in small, marginal producing countries.
Production in France has risen, especially for orange and apple.
Grape juice is not included as not much is used in soft drinks: primary
uses are for processing and fermentation.
12 | P a g e
Major nation producers, packaged fruit juices, by volume 2009, 2013

000 tons Orange Apple Fr/veg mix O fruit
2009
Germany 835 860 375 ..
Italy 46 43 164 444
Spain 384 94 399 71
UK 334 202 199 n.a.
Poland 120 249 248 20
France 406 69 114 14
Austria 38 70 101 50
Netherlands 98 42 144 ..
EU27 2,825 1,815 2,026 1,329
* likely to be the producers of the tons not separately specified

Orange Apple Fr/veg mix O fruit
2013
Germany 729 805 441 193
Spain 497 102 292 56
Italy 159 102 84 494
France 626 126 16 16
UK 381 176 301 ..
Poland 106 335 122 16
Austria 21 49 82 59
Netherlands .. .. 200 ..
EU27 3,121 1,924 2,105 1,031
*Excluding grape juice and grape must
EU: Soft drinks consumption

Consumption data is collected by Canadean, the soft drink information
group. This does not match production data exactly as many large
carbonates and juice companies have centralized production facilities
within Europe, some of which also export outside the EU.
13 | P a g e
Data on volume consumption of ready to drink (RTD) drinks across the EU

over time show that soft drink market volumes are generally rather lower
than in 2010, and slightly below 2008 (before the recession started
affecting sales). Packaged water seems to have held its volume and the
low-priced dilutable (squashes) sector has grown: but juices and nectars,
the highest priced sector, are down significantly.
On a per capita basis, a pronounced downward trend can even be seen in

soft drinks: water is stable and although dilutables are growing, this is a
very small sector.
Europe: Consumption of RTD drinks by volume, 2008-13

2008 2010 2013
bn litres
Soft drinks 48.8 49.2 48.4
Packaged water 52.7 52.6 53.0
Dilutables 7.8 8.2 8.5
Juices and nectars 11.7 11.3 10.2
Total 121.0 121.4 120.1
Per capita
Soft drinks 95.7 95.9 93.8
Packaged water 103.4 102.7 102.6
Dilutables 15.4 16.0 16.4
Juices and nectars 22.9 22.1 19.8
Total 237.3 236.7 232.6
Source: Canadean, Innova Market Insights
In terms of the value of sales, consumption data shows clearly that across
all RTD drink sectors, Germany is by far the largest market: in 2013 it was
still almost double the size of the next biggest, Italy and France.
German sales have grown as they have in France and Poland, but in
several countries, a sharp fall can be seen in 2013: Italy, Spain and
14 | P a g e
Greece. It will not be a coincidence that these are countries suffering a

sharp recession as of 2013.
RTD drinks market size, consumption by volume: 2005-2013
Euro million, manufacturer’s sale prices

2005 2008 2010 2013
Germany 24,654 27,432 28,066 28,210
Italy 15,678 16,181 15,660 15,112
France 14,150 13,687 14,355 14,780
UK 12,627 12,473 12,835 12,962
Spain 11,492 11,924 11,217 10,688
Poland 5,882 7,709 8,498 8,666
Belgium 2,871 2,870 2,901 2,949
Netherlands* 2,619 2,823 .. ..
Austria .. 2,206 2,198 2,171
Greece 1,796 2,247 1,957 1,701
*No recent figures are available for the Netherlands.
Market profiles across countries differ significantly. The German market for
soft drinks is nearly double the volume of the next largest, the UK, and
that is a third higher than France or Spain.
The water market is dominated by Germany and Italy, which account for
well over half of major market consumption. Germany also dominates the
juice market with about a third of major market sales, over 50% higher
than the second market, France. Although a major producer of juices,
consumption levels in Italy are relatively low and Spanish volumes have
dropped in 2013.
15 | P a g e
Market consumption by volume by type: 2008, 2013

Soft
million liters drinks Water Juices Total
2008
Germany 10,799 13,320 2,804 26,923
Italy 3,824 11,351 844 16,019
France 3,735 7,066 1,631 12,432
Spain 4,616 6,004 1,277 11,897
UK 6,534 1,474 1,455 9,463
Poland 3,488 2,528 791 6,807
Belgium 1,281 1,297 230 2,808
Netherlands 1,768 353 455 2,576
Greece 768 1,283 187 2,238
Austria 984 753 253 2,206
2013
Germany 11,775 13,620 2,486 28,209
Italy 3,427 10,804 726 15,112
France 4,144 7,536 1,620 14,780
UK 6,749 1,764 1,277 12,962
Spain 4,344 5,331 985 10,688
Poland 3,691 3,222 673 8,666
Belgium 1,381 1,295 210 2,949
Austria 968 774 211 2,171
Greece 536 1,021 137 1,701
Netherlands n.a.
Consumption profiles show that the UK is a ‘soft drinks’ markets, with a

relatively small market for water, but the UK is the largest market for
dilutables by a big margin. By contrast, Italy is a ‘bottled water’ market, as
are France and Greece, with relatively small soft drinks markets.
16 | P a g e
Germany, Spain, Poland and Belgium show relatively equal weighting

between water and soft drinks. Fruit juices are more important in the UK
and French markets than in others.
Country profile by volume, %, 2013

Soft Water Juices Total
UK 52 14 10 100
Belgium 47 44 7 100
Austria 45 36 10 100
Poland 43 37 8 100
Germany 42 48 9 100
Spain 41 50 9 100
Greece 32 60 8 100
France 28 51 11 100
Italy 23 71 5 100
Netherlands n.a.
EU industry profile
The profile of the industry by companies operating in specific markets
shows that nearly every country has a soft drink industry: as noted
elsewhere, branded manufacturers often supply flavored syrups for local
bottling, and most countries have a mineral water business.
It is notable that the biggest market, Germany, does not have the biggest
manufacturing base, according to Eurostat data. France now manufactures
more by volume and value. Austria, the Netherlands and Belgium have
very concentrated industries with relatively few enterprises.
17 | P a g e
EU soft drinks* manufacturers – profile, 2012

Number Turnover Production
EU m value
EU28 3,851 44,010 41,914
France 365 8,237 6,693
Germany 249 6,196 6,024
Spain 322 4,901 4,866
United Kingdom 223 4,899 4,844
Italy 241 4,807 5,092
Austria 73 3,734 3,744
Belgium 26 1,874 1,800
Poland 312 1,683 1,650
Netherlands 20 1,468 1,401
Romania 338 1,009 976
Greece 106 764 726
Hungary 781 733 643
Portugal 58 685 682
Croatia 72 316 260
Bulgaria 215 313 292
Ireland 11 303 285
Slovakia 129 269 242
*Includes water
In juices, the value of production and the number of enterprises is

significantly lower, and some countries have no significant home
production. The biggest consumer, Germany, has the biggest business,
which will cover both home-produced juices like apple and packaging
imported concentrates like orange.
Spain, as a large producer, Italy and Poland are the other significant
industries in Europe. A lot of this is for export to Germany and consuming
countries like the UK.
18 | P a g e
EU Juice manufacturers – profile 2012
Countries with turnover of EU 100 m or more
Number Turnover Value

EU ‘000
EU 28 1,568 11,669.6 11,381
Germany 298 2,857.9 2,851
Spain 82 2,165.7 2,107
Italy 118 1,405.5 1,431
Poland 152 1,372.9 1,301
Austria 54 784.9 762
France 107 749.6 731
United Kingdom 52 521.0 521
Sweden 65 246.1 242
Hungary 50 104.1 92
Belgium 22 99.8 99
Exports and imports

All markets import at least some products by category. By value, the main
imported sectors are juice and soft drinks. Juice imports from outside the
EU have risen by a factor of more than three since 2009. Other drinks
show very similar import levels to 2009, overall.
The leading importers of soft drinks are Austria, Germany and the UK, but
most countries have some significant imports. Germany has also increased
imports of mineral water.
In juice, the main importers are the Netherlands and Germany: this may
reflect the traditional role of the Netherlands as a primary importer for
redistribution across Europe. Again, most markets show a significant level
of imports.
19 | P a g e
Water is less frequently traded across boundaries. As most countries have

a domestic mineral water industry, there is less need, although Germany,
the UK and Belgium do have significant imports.
Imports from outside the EU are limited, compared to the total EU market.
Exports outside the EU are relatively small, led by soft drinks and mineral
water. Full export data is not available for fruit juices other than frozen
orange juice.
Soft drinks are exported from all the major producing countries. Between
2009 and 2013, the value of exports has almost doubled, according to
Eurostat figures. The Netherlands is a major exporter across categories
although it does not have a large domestic industry; this is because of its
role in transit ports (Rotterdam, Hague), and this is also true of Belgium
(Antwerp).
The leading producer, Germany, is also a leading exporter in juice and soft
drinks while France is the leading mineral water exporter, followed by
Italy. However, orange juice exports and re-exports have fallen sharply.
Exports ex EU 27, by type, by value, 2009, 2013
million Euro 2009 2013

Soft drinks 765 1,190
Mineral waters 525 618
Drinks, inc dairy fat 415 574
All juices 382 528
Drinks, + dairy fat 48 98
‘Other’ waters 17 27
Full export data by volume is not available for fruit juices other than frozen
orange juice, and is not available for ‘other water’ (mineral waters and
products not to EU specifications).
20 | P a g e
The highest volume product in exports is now mineral waters, thanks to a

sharp increase in Italian exports between 2009 and 2013. France and Italy
are the main producers. The change in exports outside the EU 27 suggests
that some volume that previously sold within the EU is now being exported
outside.
In soft drinks the largest producers, led by Germany, are the biggest
exporters by volume. There is significant export trade in mixed and diluted
drinks, and in the national specialty areas.
Exports ex EU27, by type, by volume, 2009, 2013
‘000 tons 2009 2013

Mineral waters 1,292 1,517
Soft drinks 838 1,331
All juices n.a. n.a.
‘Other’ waters n.a. n.a.
Full import data by volume is not available for fruit juices other than
orange juice.
The main juice import trade is in unconcentrated orange

juice, primarily from Florida and Brazil. Mineral water is
imported by some countries, notably Germany and the
UK, but the major sector, apart from juice for further
packing, is soft drinks across all major markets, followed
by mixed drinks.
Imports from outside the EU are limited and led by orange

juice. Juices are brought in both to package without
mixing, and as the ingredient for soft drinks and mixed
drinks (and other food products). However, there is also
international trade in soft drinks. The value of soft drinks
21 | P a g e
imports has increased in Germany and the UK between 2009 and 2013,
and Austria now looks like a centralized European production, import and
distribution center.
Imports, by type, by value, 2009, 2013
EU million
All juices 1,526 2,071
Soft drinks 494 566
Drinks, inc. dairy fat 73 81
Full import data by volume is not available for fruit juices other than
frozen orange juice, and is not available for ‘other water’.
The major volume importer of orange juice is Germany, and they also lead
in imports of mineral water and soft drinks. However, all major markets
import some soft drinks, which probably reflect specialization within
international branded manufacturers, as well as trans-shipment in the
Netherlands and Belgium. Mixed soft drinks and diluted RTD juices are also
imported by most territories.
Imports, by volume, 2009, 2013
‘000 tons 2009 2013

Soft drinks 455 497
All juices n.a. n.a.
‘Other’ waters n.a. n.a.
22 | P a g e
Imports, value by territory, 2009, 2013

EU million 2009 2013
Germany
Soft drinks 410 416
Drinks, no dairy fat 107 150
UK
Soft drinks 352 321
France
Soft drinks 339 360
Drinks, no dairy fat 169 ..
Spain
Soft drinks 89 87
Mineral waters 7 13
Consumption trends by subsector

Trends in volume consumption, as monitored by research group Canadean,
show a largely mature market: please note that since the last report,
some of Canadean’s figures for 2008 have been updated.
23 | P a g e
Growth in Germany in RTD (ready to drink) soft drinks has slowed down
considerably, has ceased in the UK, Poland and Belgium, and fallen in
other countries. Countries with tough economies, like Italy, Spain and
Greece, show especially sharp falls.
RTD soft drinks, Major markets, Volume sales, 2005-2008

million liters 2005 2008 2010 2013
Germany 9,352 10,799 11,376 11,775
UK 6,565 6,534 6,691 6,749
Spain 4,507 4,692 4,536 4,344
France 3,428 3,735 4,132 4,144
Poland 2,357 3,501 3,710 3,691
Italy 3,736 3,824 3,775 3,427
Netherlands 1,651 1,768 n.a.
Belgium 1,244 1,281 1,332 1,381
Austria .. 984 992 968
Greece 695 768 676 536
In packaged water, sales in Germany are stable, and there has been some
increase in France and Poland, but the strongest increase has been in the
UK. Sales in Italy and Spain, both large markets, have drifted down.
24 | P a g e
RTD Packaged Water, Major markets, Volume sales, 2005-2013

million liters 2005 2008 2010 2013
Germany 12,269 13,320 13,581 13,620
Italy 10,930 11,351 10,913 10,804
France 7,927 7,051 7,165 7,536
Spain 5,719 6,004 5,568 5,331
Poland 1,943 2,486 2,993 3,222
UK 1,568 1,474 1,566 1,764
Belgium 1,346 1,297 1,283 1,295
Greece 918 1,275 1,240 1,021
Netherlands 310 353 n.a.
Austria .. 753 750 774
Fruit juices are mature markets, and as the most expensive sector, have
been vulnerable to the impact of economic recession. RTD volume sales
have fallen in all territories between 2010 and 2013, and by a significant
amount in Germany and the UK, which are major markets.
RTD fruit juice and nectar, Major markets, Volume sales, 2005-2013
million liters 2005 2008 2010 2013
Germany 2,979 2,804 2,810 2,486
France 1,497 1,631 1,693 1,620
UK 1,460 1,455 1,405 1,277
Spain 1,240 1,277 1,097 985
Italy 855 844 807 726
Poland 829 791 810 673
Netherlands 428 455 n.a.
Austria .. 253 243 211
Belgium 222 230 222 210
Greece 173 204 180 137
25 | P a g e
Low calorie options for soft drinks such as carbonates are popular in the
UK, Belgium and the Netherlands, and are increasing their share in
Belgium, but do not account for more than 25% of sales in other markets.
They are growing in some markets which are not strong soft drinks
markets, especially Greece and Spain, but are a niche sector across
markets, and under-developed in Italy and Poland.
RTD soft drinks, percentage as low calorie, 2005-2013
Major markets, Volume sales,

2005 2008 2010 2013
UK 27.9 30.0 30 30
Belgium 27.3 28.4 29 30
Netherlands 22.6 24.9 n.a.
Germany 13.1 17.3 22 22
Austria .. 21.0 22 21
France 14.5 17.1 17 17
Spain 11.7 14.9 15 19
Greece 8.4 13.1 15 17
Poland 2.4 3.0 4 4
Italy 2.1 5.4 6 7
In terms of per capita consumption, Germany is by far the heaviest

consumer of all soft drinks, water and juices, with a per capita rate which
has risen in 2010 and 2013. Sales in Poland have also grown steadily.
Most other markets show stability or a fall in 2013, and per-capita
consumption in Greece, Spain and Italy shows a marked decline.
26 | P a g e
Top markets, liters per capita, all RTD soft drinks

2005 2008 2010 2013
Germany 298.7 334.5 343.3 347.8
Belgium .. 275.8 282.4 282.4
Austria .. 265.5 263.2 256.9
Italy 273.1 269.3 257.8 245.8
Poland 154.2 199.5 220.9 225.8
Spain 260.5 257.8 241.4 225.6
France 232.6 213.1 221.0 224.1
UK 209.5 205.5 205.9 204.5
Greece 162.0 201.8 195.9 157.9
Soft drinks consumption is led by Germany, where it is also steadily

increasing, and growth is also shown by Belgium: by contrast the UK
market is a third lower and static. Major markets such as France and Italy
are relatively low consumers and showing no signs of becoming bigger
users.
Top markets, liters per capita, RTD soft drinks

2005 2008 2010 2013
Germany 113.3 132.9 139.2 145.2
Belgium 119.4 122.4 127.8 132.2
Austria .. 118.4 118.8 114.5
UK 108.9 107.6 107.3 106.5
Poland 61.8 90.9 96.5 96.1
Spain 102.2 102.2 97.5 91.7
France 56.3 58.2 63.6 62.8
Italy 65.1 63.6 62.1 55.7
Greece 62.7 69.0 62.9 49.7
27 | P a g e
Italy is by far the heaviest consumer of packaged water although the

market appears to be mature and volumes per capita have fallen in 2013.
Consumption in Germany, the second largest market, have stabilized
recently. In Poland strong growth is still shown, and there is positive
growth in France, and recently, in the UK.
Top markets, liters per capita, RTD packaged water

2005 2008 2010 2013
Italy 190.4 188.9 179.6 175.7
Germany 148.6 162.4 166.1 167.9
Belgium 129.2 123.9 123.1 124.0
France 130.3 109.8 110.3 114.3
Spain 129.7 130.8 119.7 112.5
Greece 82.8 115.2 115.4 94.8
Austria .. 90.7 89.8 91.6
Poland 50.9 64.6 77.8 83.9
UK 26.0 24.3 25.1 27.8
As the most expensive product in the sector, juice and nectar consumption
is highest in Germany but this is now a shrinking market. No growth is
seen in any national market; levels of consumption are declining across
markets, significantly so in most countries.
28 | P a g e
Top markets, liters per capita, RTD juices & nectar

2005 2008 2010 2013
Germany 36.1 35.4 34.4 30.7
Spain 28.1 24.5 23.6 20.8
Austria .. 30.4 29.0 25.0
France 24.6 25.4 26.1 24.6
UK 24.2 24.0 22.5 20.1
Belgium 21.3 22.1 21.3 20.1
Poland 21.7 20.5 21.1 17.5
Greece 15.6 16.8 16.7 12.7
Italy 14.9 14.0 13.3 11.8
Consumer prices
While water prices do not change much, input prices such as sugar, fruit
juices and packaging can be highly volatile. Orange juice is priced in
dollars, which can impact the apparent cost of import.
As a result, prices have risen but in most cases, drinks prices have been
kept lower than the general food and drink price index. In some major
markets like Italy and the UK, drinks prices have been kept at levels
significantly below general food price inflation.
Prices have risen faster than general food inflation in the Netherlands and
Denmark.
29 | P a g e
Consumer price index on 2005, soft drinks, fruit juice and waters
Index on 2005 Drinks F&D Drinks F&D
2005 2009 2009 2013 2013
Belgium 100.0 108.0 114.1 117.1 127.4
Denmark 100.0 123.2 115.3 132.0 126.1
Germany 100.0 109.3 109.1 119.3 122.1
Greece 100.0 108.6 113.3 109.8 118.8
Spain 100.0 112.3 113.2 114.1 120.2
France 100.0 110.1 108.4 116.6 116.0
Italy 100.0 105.5 112.2 109.6 120.7
Netherlands 100.0 116.6 110.3 126.1 117.7
Austria 100.0 119.9 126.2
Poland 100.0 110.3 116.5 117.6 133.4
United Kingdom 100.0 112.8 123.2 137.7 143.9
Other major markets: USA and China

USA
The USA has the largest soft drinks market in the world, although the
markets for fruit juice and mineral waters are relatively small as a
proportion. Carbonated finished goods are the largest industry sector: the
production of syrups for use by bottlers is a $3.4 bn industry on its own.
Since 2008, latest detailed data shows a drift in production value across
most sectors of the industry.
Non-carbonates are significantly less popular than carbonates although

there has been a lot of development in areas such as iced teas, energy
drinks and fruit-based mixes.
Historically, cola’s dominated carbonated drinks, but in 2009 flavored soda

(root beer, lemonade etc.) overtook the cola sector.
30 | P a g e
US: Soft drinks and juices by value of shipments, $ m
2008
Soft drinks, carbonated 23,174
Soft drinks, non-carbonated 11,175
Canned and fresh juices 6,988
Bottled water manufacturing 6,780
Other flavoring agents, excluding chocolate 5,199
Liquid beverage bases, for soft drink bottlers, etc. 3,215
Soft drink flavoring syrup, sold in bulk 1,522
Soft drink, nsk, total 1,045
Liquid beverage bases (not for soft drink bottlers) 642
2011 (latest data)

Soft drinks, carbonated 21,078
Soft drinks, non-carbonated 11,150
Canned and fresh juices 6,454
Bottled water manufacturing 6,382
Other flavoring agents, excluding chocolate 5,106
Liquid beverage bases, for soft drink bottlers, etc. 3,381
Soft drink flavoring syrup, sold in bulk 1,334
Soft drink, nsk, total 864
Liquid beverage bases (not for soft drink bottlers) 740
Source: IBQ (BEA), Innova Market Insights
Currently juice consumption is expected to be about a quarter lower in

2013/14 than it was in 2005.
The main juices consumed in the USA are orange, then apple, with other
individual flavors being relatively minor. Orange consumption showed a
drop in 2008 which may be due to the failure of the Florida crop and a
spike in prices for imported juice. However, the significant falls seen
across all juice types for the 2013/14 year suggest a much wider change
in usage is now happening.
31 | P a g e
US Per capita use, Gallon per head
All
Year Orange Gpfr Citrus Apple Grape Pine Cranb All
2005 4.8 0.2 5.2 2.1 0.4 0.3 0.2 8.2
2008 3.8 0.3 4.2 2.3 0.6 0.2 0.2 7.6
2010 3.8 0.2 4.2 2.1 0.4 0.3 0.2 7.2
2013* 3.1 0.2 3.4 1.8 0.4 0.2 0.3 6.1
*provisional 2013/14 year

Source: USDA, Innova Market Insights
Even though the US is a major agricultural producer of oranges, grapes,

prunes and apples, import levels are significant even for orange juice.
Overall, about a third of the US market is supplied by imported juice.
US Imports as % all consumption, fruit juices
Year Apple Grape Prune Pine Gpfr Lemon Lime Orange

2005 75.7 40.6 68.0 89.0 16.8 45.5 99.9 15.3
2008 81.7 47.5 57.9 99.9 0.3 61.0 99.9 32.0
2010 84.8 43.6 52.8 99.9 0.5 39.5 100.0 17.6
2013 77.9 40.9 46,6 99.9 0.7 62.2 100.0 24.5
Source: USDA, Innova Market Insights
The US is an exporter of juice, but the majority goes to Canada and export
levels are much lower than imports. The US import sources are Brazil for
oranges, but it is notable that the major source for apple juice is now
China. Argentina and Mexico are major suppliers of citrus juice other than
orange.
32 | P a g e
US juice imports and exports, 2009-2012
US juice exports, value

$m 2009 2010 2011 2012
Apple 30 34 35 37
Grape 85 84 83 97
Grapefruit 54 43 61 57
Orange 380 420 561 452
Other 558 570 586 647
US juice imports, value

Apple 490 398 734 678
Grape 117 95 118 133
Grapefruit ..
Lemon 48 44 117 70
Orange 330 393 406 392
Pineapple 118 98 118 110
Other 295 234 320 354
Source: NASS, Innova Market Insights
Major producers in the USA are:
Dr Pepper Snapple
The group manufacture, market and distribute more than 50 brands of
carbonated soft drinks, juices, ready-to-drink teas, mixers and other
premium beverages across the United States, Canada, Mexico and the
Caribbean. Sales in 2013 were $6 billion, showing no change in 2012, and
operating profits are also static. There has been some marginal volume
growth. 88% of sales are in the USA, with the largest foreign territories
being Canada and Mexico.
The portfolio includes Dr Pepper, Snapple, 7UP, Mott’s, A&W, Sunkist

Soda, Canada Dry, Hawaiian Punch, Schweppes, Peñafiel, Squirt, Clamato,
Mr & Mrs T Mixers, Rose’s, and Yoo-hoo. It is also a licensee for Pepsi and
33 | P a g e
Coke brands in some territories. Dr Pepper claims a 40% share of all

flavored carbonates (which are 50% of the US market).
Dr Pepper Snapple Group was established in 2008 following the spinoff of

Cadbury Schweppes Americas Beverages (CSAB) from Cadbury Schweppes
plc.
Recent developments have been more concentration on low calorie

products especially of their ‘core’ products:
‘We’re pleased with last year’s launch of the 10-calorie versions of our
Core 4 flavors – 7UP TEN, A&W TEN, Sunkist TEN soda and Canada Dry
TEN – which helped Core 4 volume outperform the CSD category by 3
percentage points in 2013. With 52 percent of Core 4 and RC TEN volume
incremental to the CSD category, the TEN lineup is successfully bringing
back lapsed consumers who had previously stopped drinking soft drinks or
were drinking fewer servings.” The company claims that consumers
switching from other still or carbonated drinks account for 52% of
incremental volumes in this sector.
In the novelty flavor sector, DPSG recorded 37% volume growth in Vita
Coco and signed new distribution agreements with Bai and Sparkling
Fruit20. In 2014, Neuro will add new flavors to its Bliss,
Sleep and Sonic functional platforms, and Vita Coco will
launch Vita Coco Lemonade to bring new consumers to
the coconut water category through a more mainstream
flavor.
New product development takes account of new health

concerns: ‘We’re taking action by focusing more than half
of the projects in our innovation pipeline on reducing
calories, offering smaller sizes and improving nutrition.
We’ve made the number of calories in each of our
products prominent on packaging, and consumers can
find additional nutrition and ingredient information at the
DPSG products facts website.’
34 | P a g e
Cott Corporation
A leading producer of own-label carbonates. Cott Corporation also makes
more than 500 bottled water, juices, ready-to-drink teas, and energy and
sports drinks. The principal markets for manufacturing and sales are the
United States, Canada, the United Kingdom and Mexico. In 2013 it bought
UK group Calypso Soft.
In 2010, Cott Corporation bought Cliffstar Corporation, the largest

independent grape, cranberry, and prune juice processor, and one of the
largest private label beverage suppliers in the United States, for $500
million.
‘We estimate that as of the end of 2013, we produced (either directly or

through third party manufacturers with whom we have co-packing
agreements) a majority of all retailer brand CSDs and juice sold in Canada
and the United States, as well as a majority of all retailer brand sports and
energy products sold in the United Kingdom’
Cott is registered in both the USA and Canada. Sales in 2013 were $2.1
bn, lower than 2011 or 2012. Gross profit also fell. Of sales, $1.5 bn was
in North America, a fall on 2011 and 2012, and $494m was in the UK,
where sales have increased in 2011 and 2012. Cott, like other producers,
has seen volume declines in the US market, by nearly 9% in 2013.
Cott market or supply beverages from 20 manufacturing facilities,

including carbonated soft drinks, sparkling and flavored waters, energy
drinks, sports drinks, juices, juice drinks and smoothies, ready-to-drink
teas and other non-carbonated beverages. Company-owned brands
include Cott, RC, Vintage, Vess, Stars & Stripes, Ben Shaws, Carters, Red
Rooster, Red Rain and So Clear.
Cott operate in three operating segments—North America (U.S. and

Canada), United Kingdom (includes UK and Continental European reporting
unit), and All Other (which includes Mexico, Royal Crown International
(“RCI”) and international corporate expenses).
35 | P a g e
In 2013, carbonated soft drinks, juice, concentrate and all other products
represented 36%, 25%, 2% and 37% of revenue respectively. This
represents a significant switch out of carbonates over time, and into ‘all
other’ products such as energy, tea and mixed still drinks.
Hansen’s Natural/Monster Beverage

Monster Beverage Corporation, an energy drink specialist, is a leading
marketer of all natural alternative as well as functional beverages. Group
sales in 2013 were $2.6 bn. Originally called Hansen’s Natural, a fruit juice
and still drinks company, in 2012 the company rebranded itself after its
main sales line, the Monster energy drinks brand.
In 2014, the company finalized an agreement with Coca Cola for a 17%
interest. When finalized, Coca Cola will be represented by two directors on
Monster's board and will transfer its global energy drink business
(including NOS, Full Throttle, Burn, Mother, Play and Power Play, and
Relentless) to Monster. In return, Monster will transfer its non-energy
drink business (including Hansen's Natural Sodas, Peace Tea, Hubert's
Lemonade and Hansen's Juice Products) to Coca Cola. Upon closing, the
Company will make a net cash payment of $2.15 billion to Monster.
Distribution co-operation in markets such as China is expected.
The ‘Monster’ brand was launched in 2002, notable for its 16 oz can size,
and the brand now includes RTD coffee mixes, dairy shakes and tea
drinks. Some are high caffeine formulations, which has led to some
lawsuits, as have advertising claims. Sales have been growing at very high
rates since the concentration on energy drinks: 31% in 2011, 22% in 2012
and 9% in 2013.
A move to mainstream positioning in 2013 is expected to add sales:
‘We have historically marketed our Monster Energy, Hansen’s and Blue
Energy energy drink products as dietary supplements in accordance with
the statutory definition of “dietary supplement” set forth in the FFDC Act.
However, as permitted under the FFDC Act and FDA regulations, we
36 | P a g e
decided to transition the labeling and marketing of these energy drink

products from dietary supplements to conventional foods. In the first
quarter of 2013, we began transitioning the labeling of such products.
Products marketed under the Worx Energy brand, which are sold in 2-
ounce bottles, will continue to be labeled as dietary supplements.’
The group operates in two divisions: DSD, including the Monster energy
brands, and the Warehouse division, including Hansen’s and Hubert’s. The
Monster brands are 93% of net sales.
The DSD segment develops markets and sells products primarily through
an exclusive distributor network, whereas the Warehouse segment
develops markets and sells products primarily directly to retailers. DSD is
now 94% of sales.
Sales outside the US were $514 million, on the back of

increased sales of ‘Monster’ energy drinks outside the
USA.
The company does not directly manufacture any of its

products but outsources to bottlers and packers.
Alternative drinks, including energy and natural brands,

were worth $37. 7 billion in the USA in 2013, (company
quoting Beverage Marketing Corporation).
Ocean Spray Cranberries

Ocean Spray is the largest producer of canned, bottled, and shelf-stable
juice drinks in the US. Sales in 2013 were $2.2 bn.
A cooperative owned by about 600 cranberry and 50 grapefruit growers in

North America, the company juices cranberries and blends them with other
fruits. It also offers other cranberry products (fresh and dried berries,
sauces, trail mixes, instant oatmeal, and snack bars), as well as fresh
37 | P a g e
grapefruit and grapefruit juices. It has recently diversified into other

blended juices such as pomegranate and blueberry.
The group also has specialist foodservice, ingredients technology and

international divisions
Florida's Natural Growers

The cooperative is one of the largest citrus juice sellers
in the US. One of the largest Florida citrus cooperatives
of growers, with a membership base of 13 grower
associations, the cooperative is made up of more than
1,000 grower-members who own more than 60,000
acres of citrus groves in central Florida.
The co-op provides juice to customers in the

foodservice, retail food, and vending industries. Its
brands include Florida's Natural, Growers Pride,
Bluebird, Donald Duck, Vintage, and Adams. Its
marketing difference is that it only uses US-grown fruit,
although some minor products are processed in China.
Roll Global
Roll Global is a privately held, U.S. $3 billion corporation with diverse
interests including agriculture, consumer packaged goods, and floral
services.
Its holdings include POM Wonderful, pomegranate juice with a distinctive

rounded bottle. POM Wonderful is the world’s largest producer of
“Wonderful” variety pomegranates, grown in California’s San Joaquin
Valley. Only US juice is used on POM products.
FIJI Water is natural artesian water bottled at the source in Viti Levu (Fiji
islands) since 1996. Roll International acquired FIJI Water in 2004 and has
since tripled the business, making it the No. 1 imported bottled water
brand in the United States.
38 | P a g e
Other interests include Paramount Citrus who own, cultivate and harvest
more than 47,000 acres of fresh citrus – Clementine/Mandarins, Navel and
Valencia oranges, lemons, minneolas and other citrus varieties. It is the
largest integrated grower, shipper and packer of fresh citrus in the U.S.
Paramount Farms is the world’s largest vertically integrated grower and
processor of pistachios and almonds.
Marketing for their food brands is handled by in-house agency Wonderful

Brands Sales and Marketing, which was set up in 2008. There is also an in-
house cross-brand strategy group, and an advertising agency. Roll also
own Teleflora, the largest flower-delivery service in the world; cargo
shipper Neptune Pacific Line, and Suterra, a maker of environmentally
friendly pest-control products.
Welch Foods
The operating subsidiary of the 978-member National Grape Cooperative
Association. Sales in 2014 were about $1 billion. Volumes rose by 4%,
with the best growth in bottled 100% juice.
Welch's claims to be the world's leading marketer of

Concord and Niagara-based grape products with over 400
items ranging from refrigerated juices and sparkling juice
cocktails to jams, jellies and a variety of single-serve
products in all shapes and sizes. Products are sold mainly in
the U.S. but also in more than 35 countries and territories
around the world.
The drinks business covers 100% grape juice products and

a variety of blends with other fruits, both shelf-stable and
refrigerated. In 2014 they launched Farmer’s Pick, a
premium 100% juice. The co-op licenses the Welch's name
to other manufactures for use in products such as frozen
fruit confections, dried fruit, fruit snacks, and carbonated
beverages.
Source: Company websites, press reports, Innova Market Insights

39 | P a g e
China
Soft drinks and bottled water have developed rapidly in China, doubling
approximately every ten years. Official recognition of the development of
the sector came with the establishment of the China Soft Drinks Industry
Association in 1993. CSDA consists of the following subsidiaries: Bottled
Water Commission, Fruit and Vegetable Juice Commission, Carbonated
Drinks Commission and Soft Drinks Associate Commission.
In 2013, the beverage market grew by 6.9% volume, a slow rate

attributed to economic slowing (Nielsen figures quoted by Tingyi).
According to Canadean, China is now the world’s largest market for bottled
water even though per capita consumption is still only one-fifth of the
USA. Products with added vitamins or minerals are especially popular at
42% of sales.
Juice consumption has been rising but despite investment in Chinese fruit
production, especially oranges, about half the consumption of frozen
orange concentrate is imported, mainly from Brazil. Other types of citrus
fruit are also imported from South Africa and Australia. The most popular
traditional juice and nectar flavor is Asian (Nashi) pear.
According to Nielsen, for the first half of 2014, the top seven categories of
beverages, namely functional drinks, bottled water, instant tea, traditional
Asian beverages, carbonated beverages, fruit juice and sour milk,
accounted for an accrued sale of RMB 80.7 billion, an increase of 7.7%
compared to RMB74.9 billion in 2013. Traditional Asian beverages, bottled
water and functional drinks recorded double-digit growth, but fruit juice
and instant tea experienced slower growth in general. (Quoted by Huiyan
Holdings)
Huiyuan also note that ‘The growth rate of 100% juice and nectars of
8.7% and 13.7% respectively, was much more prominent than low
concentration juice.’
40 | P a g e
COFCO Coca Cola Beverages

COFCO Coca Cola Beverages is a joint venture, 65% owned by COFCO, the
biggest agrifood company in China. Revenue is over RMB 6 billion. Brands
include Coca-Cola, Diet Coke, Coke Zero, Sprite, Fanta, Smart, Minute
Maid Orange Juice, Minute Maid Pulpy Super Milky, Qoo Juice, Yuanye Tea,
Nestea Ice Rush Tea, Ice Dew Water, and Glaceau Vitamin Water.
The JV is within the branded foodstuff division of COFCO. Altogether, there

are now 43 bottling plants in China: the newest, opened in Hebei in 2013,
cost $106 m, part of greater three-year, US$4 billion current investment
plan for 2012-2014.
The group recently celebrated its 35th year of operations in China, which is
now its largest market in the Pacific region and accounts for 8% of global
sales, its third largest single territory. Volume growth in 2013 was 3%.
China Huiyuan Juice Group (1886)

It is reported to be the largest juice company in China. Quoted on the
Hong Kong stock exchange but owned by 63% by its chairman, Mr. Zhu
Xinli. 17% is owned by Hong Kong PE group, SAIF, after the sale of
Danone’s stock in the company in 2010.
Turnover was Rmb 4.6 bn in 2013. A proposed purchase by Coca Cola was
blocked in 2009 by the Ministry of Commerce, on competition grounds.
The Group currently produces and supplies approximately 228 kinds of

fruit and vegetable juice beverage products in order to satisfy different
consumer needs. These beverage products are divided into three
categories according to juice concentration, which are 100% juices,
nectars and juice drinks. Brands include C ‘Ta’ V ‘Ta’ line of juice; the
‘Quan You’ line of fruit and vegetable nectars; the ‘Kiwi Super Fruit’ line of
juice drinks; and a line of children’s juice drinks under the ‘Le Le Yuan’
brand name. It also offers a vegetarian-protein product called ‘roasted
puree’.
41 | P a g e
It sells to consumer outlets and convenience, HRI and foodservice sectors,

and recently signed an agreement with Haichang Holdings, a theme park
operator.
The company was the largest maker of 100 percent-juice and nectars in
China in 2013 with a claimed market share of 56% in 100% juices and
45% in nectars (Nielsen, quoted by company).
In 2013 the company bought Huiyuan Industry, a producer of raw juices,

and has now moved to a vertically integrated model.
In May 2014, the group bought out Suntory’s Chinese fruit juice operations
for RMB 113 m. It also bought 50% of Suntory Trading which will now
operate as a joint venture. Huiyuan intends to introduce some Suntory
RTD tea drinks in 2015. It is also planning to expand into South East Asia,
with a factory in Malaysia, although current ex-mainland sales are only to
Hong Kong and Macau.
First half 2014 revenue was down 5% on the comparable period in 2013 at
Rmb 1.97 bn, and the company has noted a shift by Chinese consumers to
healthier beverages from low concentrate juices. Sales of 100% fruit juices
(22% of sales) were down 7%, but juice drinks, 22%
of total sales, declined 25%. Nectars are 30% of sales
and grew by 16%. Other products grew slightly..
New products in 2014 included sports drink Freenergy,

and vegetable protein beverage Little Moments, a
‘traditional Asian’ beverage.
In 2015, the group was looking to sales increases of at

least 10% due to increases in consumer sales, and a
future contract to supply the Chinese army.
42 | P a g e
Hangzhou Wahaha Group Co.

China’s largest beverage group. In 2013, turnover was RMB 78.3 bn, up
23% on the previous year. It is effectively controlled by Chairman Zong
Qinghou and family trusts, although a local government has a majority
shareholding.
Product lines include dairy drinks, bottled water, carbonated drinks,

bottled tea, juices, canned food, medicine & health care products, snacks,
infant formula, children’s clothing and alcoholic drinks. They are classified
in eleven categories and more than 150 types. Among them, the sales of
bottled water, dairy drinks, and canned mixed congee have maintained the
number one market share in the domestic market for years.
Products now include a kvass, marketed as ‘liquid bread’, sports drinks,

‘Future Cola’ said to be designed to Chinese tastes and third-ranked in the
market, and a version with added vitamin C.
It has some foreign sales, with brands on sale in South Korea and the UK,
and in 2012 was interested in buying UK snack group KP (eventually sold
to Intersnack).
In 2013, the company was said to be looking for investments in

biotechnology companies and energy-saving electric motors (some
Chinese governments are now mandating that 10% of new cars sold in
cities should be electrically powered cars)
Tingyi (Cayman Islands) Holding Corp.

Tingyi is the Chinese market leader in instant noodles, ready-to-drink teas,
and bottled water. The company also makes fruit juices, egg rolls, and
crackers. In 2012, the group became the Chinese bottler for PepsiCo. Total
2013 turnover was $10 bn (the company reports in US dollars as
headquartered in the Cayman Islands).
Beverages grew by 27% in 2013, to 57% of group business, at least partly

due to the PepsiCo agreement. PepsiCo itself grew by nearly 20% in 2013
43 | P a g e
and has a 49% share in colas. Tingyi recently signed a distribution

agreement with Shanghai Disney as the primary beverage supplier.
Tingyi distributes its products, under the Master Kong brand through a
network of sales offices and warehouses for wholesale and retail
customers. Tingyi's management owns a controlling interest in the firm.
In June 2014, in the second quarter, the volume market share of Master
Kong and PepsiCo in the RTD tea market (including milk tea) was 54.2%.
In the overall fruit juice market, the market share of Master Kong
(including the Fresh Daily C brand) and Pepsi (Tropicana) was 25.6%,
ranking No.1. (Nielsen figures quoted by company)
Although competition in the bottled water market was increasingly

intensive, Master Kong and Pepsi still achieved a market share of 21.8%,
the highest in the market, and moved further ahead from competitors
(Nielsen). Meanwhile, according to Canadean for the second quarter of
2014, Tingyi carbonated drinks had a market share of 34.7%, ranking
second in the market, of which the market share of cola drinks was
52.3%, the market leader. (All figures quoted by Tingyi in Q2 2014 interim
report)
Brands include Master Kong, Mirinda, AquaFina. Gatorade,

and Lipton milk tea.
The half year report for 2014 shows group turnover of US$
5.5 bn, of which beverages were $3.3bn, a slight increase on
2013. Sales volume was up 3.4%, a slow rate attributed to
poor weather as well as economic slowdown. In beverages,
the main task for 2015 is bedding-in the PepsiCo business.
Source: Company Reports, Innova Market Insights
44 | P a g e
Company Activity
International
PepsiCo
An international soft drinks, juice, cereals and snacks company, PepsiCo’s
annual turnover in 2013 was $66.4 bn, no change on 2012. Sales of food
are 52% and beverages 48% by value, with 51% sales within the USA. In
2013, margins were increased, and a productivity savings scheme is on
target. ROC has improved and the annual dividend was increased for the
41st consecutive year.
The company has increased advertising spend to 5.9% of net revenues, to

develop and support its major brands, and has increased its new product
pipeline, claiming ‘nine of the top 50 new food and beverage product
introductions across all measured U.S. retail channels. Additionally, six
new products are on track to achieve at least $100 million each in
estimated annual retail sales in the U.S.: Mountain Dew Kickstart, Tostitos
Cantina tortilla chips, Starbucks Iced Coffee, Lipton Pure Leaf Tea, Muller
Quaker Yogurt and Gatorade Frost Glacier Cherry.’
Advertising and other marketing activities, reported as selling, general and

administrative expenses, totalled $3.9 billion in 2013, $3.7 billion in 2012
and $3.5 billion in 2011, including advertising expenses of $2.4 billion in
2013, $2.2 billion in 2012 and $1.9 billion in 2011.
There are four business units: PepsiCoAmericas Foods (PAF), PepsiCo

Americas Beverages (PAB), PepsiCoEurope (which includes South Africa),
and PepsiCo Asia, Middle East and Africa (AMEA). Frito-Lay, Quaker Foods,
and Latin American Foods are reporting segments but not separate
divisions.
The beverage businesses run both full product production arms and
licenses use of its brands, through sales of syrups and concentrates to
individual bottling companies. The largest operations are in North America
(United States and Canada), Mexico and the United Kingdom. PepsiCo
45 | P a g e
claims a 24% volume share in US soft drinks markets, ahead of Coca Cola
at 21% (whose investment in Monster Brands brings another potential 4%
share).
PAB makes, markets, sells and distributes beverage brands including

Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, 7UP (outside the
U.S.), Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist and
Mirinda. PAB also, either independently or in conjunction with third parties,
makes markets, sells ready-to-drink tea and coffee products through joint
ventures with Unilever (Lipton brand) and Starbucks. PAB manufactures
and distributes brands licensed from Dr Pepper Snapple Group, Inc.
(DPSG), including Dr Pepper, Crush and Schweppes, and juice brands
licensed from Dole Food Company, Inc. (Dole) and Ocean Spray
Cranberries, Inc. (Ocean Spray).
PAB sales in 2013 were $21 billion, down slightly on 2012 and 2011, as US
volumes were down by 3% although Latin American volumes were stable.
Volume drift was due to a 5% decline in carbonates but only 2% decline in
non-carbonates, which was attributed to a sharp fall in water sales.
Europe covers foods, drinks, and some dairy products in Russia. Revenue
in 2013 was $13.8 billion, static on 2011 and 2012 sales. Snacks volume
was up 3%, but beverages were down by 1%. Operating profit fell by 3%.
In 2011, PepsiCo bought Russian dairy to snacks business Wimm-Bill-Dann

for a total of $5.1 billion. Subsequent merger costs in 2012 were $16
million, and in 2013 were $10 million. This brings together PepsiCo’s
international brands with its Russian juice and water brands (Fruktovi Sad,
Ya, Tonus, Hrusteam and Aqua Minerale) and Wimm-Bill-Dann's portfolio
of leading dairy and juice brands (Domik v Dorevne, Chudo, Imunele, J7,
Lubimy Sad, 100% Gold Premium and Agusha).
In Asia, revenues also declined slightly. Snacks volume rose by 7%, but
beverages volumes were up 12%, driven by ‘double-digit growth in China
(including the co-branded juice products distributed through our strategic
alliance with Tingyi) and Pakistan partially offset by a double-digit decline
46 | P a g e
in Thailand. Additionally, the Middle East experienced low-single-digit

growth and India experienced slight growth. Profits grew by almost 60%
because of some one-time gains in licensing and franchising.’
In 2012, PepsiCo undertook an asset swap with its bottler, Tingyi,

contributing its bottling operations to Tingyi’s beverage division and
receiving 5% indirect equity interest in return. Tingyi is now the PepsiCo
bottler in China. PepsiCo could increase its holding to 20% in 2015.
Restructuring costs so far are $150 million.
For the future, the company lays an emphasis on new markets: ‘Growth
will continue to be fueled by developing and emerging markets. The
growth rates of developing and emerging markets are expected to
continue to outpace developed markets for the foreseeable future. And by
2030, experts estimate an additional 3 billion people may join the middle
class. These trends present excellent growth opportunities, but will require
significant investment and development of the right people, skills and tools
to compete. We have already established strong positions in developing
and emerging markets, but need to continue to invest in building our
capabilities in these markets to capture these growth opportunities.’
However, health and wellness is also an established trend:

‘The consumer shift to more nutritious products will
accelerate. Trends such as a desire for convenient,
functional nutrition, local and natural ingredients, and
better-for-you snack and beverage options have firmly
taken hold and will continue to accelerate around the
world. We anticipated these trends early on and have taken
significant actions to balance our portfolio of offerings.
Additionally, we have improved the nutritional profile of
many of our social snacks and beverages by reducing
added sugar, sodium and saturated fat in key brands.’
(Presumably ‘social snacks’ means that big bags can be
sold without implying over-consumption by one person).
47 | P a g e
Coca Cola
The world’s largest juice and juice drink company as well as a leading
carbonated soft drink company in the USA. Sales in 2013 were $46.6 bn, a
2.5% decline on 2012. Profits at $8.6 bn, also declined by nearly 5%.
Some decline is attributed to the deconsolidation of bottling plant returns
in Brazil and the Philippines (these were sold to FEMSA, a bottling
partner).
The company notes that ‘Our consolidated results were unfavorably

impacted by geographic mix as a result of growth in our emerging and
developing markets exceeding growth in our developed markets. The
revenue per unit sold in our emerging markets is generally less than in
developed markets’
Total volumes were up by 7% in Eurasia and Africa, and by 3% in the

Pacific, but static or in slight decline elsewhere. Carbonated drinks showed
lower growth overall: in total drinks volume was up by 2% split into a 1%
increase for carbonates and a 5% growth in still drinks, led by 13% growth
in Eurasia and Africa.
In North America, a core region at 21% of volume but 24% of net

operating income, there was a 2% volume decline in carbonates and a 5%
growth in still drinks. Their current market share in the US is believed to
be 21%. Still beverage growth in North America was led by strong
performance in teas, juices and juice drinks and packaged water.
In Europe, 14% of all volume and 28% of operating income, carbonates

were down 1% by volume, but still beverages were down by 5%,
attributed to economic conditions and a very poor summer. In the key
Latin America area, 29% of volume and 28% of net operating income,
carbonates were static and still beverages up by 8%. This reflects
increases in the tea, packaged water, and juice and juice drink categories
of 16%, 6% and 5%, respectively.
48 | P a g e
By individual territory, the largest single market at 20% of volume is still

the USA. The company claim increased market shares (in a market which
is generally declining) and strong growth in RTD tea, Illy coffee, and the
new coconut water sector. The second largest, at 12% of global volume,
Mexico, benefitted from launches into the value-added dairy sector. China,
at 8% of global volumes, grew by 3% across both carbonates and still.
High growth rates were seen in the newer (but very small) markets in
Thailand and Vietnam.
Coca Cola own or license and market more than 500 nonalcoholic
beverage brands in over 200 countries, primarily sparkling beverages but
also a variety of still beverages such as waters, enhanced waters, juices
and juice drinks, ready-to-drink teas and coffees, and energy and sports
drinks. Along with Coca-Cola, which is recognized as the world’s most
valuable brand, Coca Cola own and market four of the world’s top five
nonalcoholic sparkling beverage brands, including Diet Coke, Fanta and
Sprite.
Coca Cola manufacture beverage concentrates and syrups, which they sell
to authorized bottling and canning operations to produce finished beverage
products. Juices and waters are normally bottled by the company. 38% of
company revenues are due to concentrate sales, and 62% to finished
product sales. Coca Cola also take large minority stakes in their biggest
regional bottlers. In 2010 the company bought out the bottler operating in
the US, Canada and some Caribbean territories, but the European bottling
operation remains separate.
Major brands include Coca Cola and variants, Fanta, Sprite, Pibb Xtra,
Mello Yello, Tab, Fresca and Barq’s sparkling beverages, Powerade,
Aquarius, Sokenbicha, Ciel, Bonaqa/Bonaqua, Dasani, Dasani flavored
waters, Georgia ready-to-drink coffees (sold primarily in Japan), Lift,
Thums Up, Kinley, Eight O’Clock, Qoo, Mother, Vault, NOS, Full Throttle
and other products developed for specific countries.
Beverage products also include enhanced water products such as glaceau

vitaminwater and smartwater, Fuze fortified beverages, tea-flavored
49 | P a g e
beverages and fruit drinks sold in the United States, and Matte Leao herbal
beverages sold in Brazil.
Juice products include Minute Maid juices and juice drinks, Simply juices
and juice drinks, Cappy juices, Odwalla nourishing health beverages, Five
Alive refreshment beverages and Bacardi mixers concentrate.
In 2012, Coca Cola invested in the beverage business of Aujan Industries

Company J.S.C., one of the largest independent beverage companies in
the Middle East, now owning 50% of the company including Rani, a juice
brand, and Barbican, a flavored malt beverage brand, in certain territories.
In 2013, the company bought most of the remaining shares, to 90%, in

UK group ‘innocent drinks’, which makes all-natural fruit drinks, with no
added water, sugar or other sweeteners, concentrates, or preservatives.
No purchase figure has been published. Products include juices, smoothies,
and thickies (yogurt and fruit); it also offers fruit tubes (pureed fruit and
juice in squeezable packaging). The innocent operation has now become
part of the Europe division, although the founders retain a small stake.
In 2014, the company finalized an agreement for a 17% interest in

Monster Beverages, a US energy and health drinks group with 4% of the
US soft drinks market. When finalized, Coca Cola will be represented by
two directors on Monster's board and will transfer its global energy drink
business (including NOS, Full Throttle, Burn, Mother, Play and Power Play,
and Relentless) to Monster. In return, Monster will transfer its non-energy
drink business (including Hansen's Natural Sodas, Peace Tea, Hubert's
Lemonade and Hansen's Juice Products) to Coca Cola. Upon closing, the
Company will make a net cash payment of $2.15 billion to Monster.
In 2014, Coca Cola made an agreement with Green Mountain Coffee

Roasters, Inc. for the development and introduction of Coca Cola brands in
GMCR’s the new Keurig Cold at-home beverage system and bought about
10% GMCR, for $1.25 bn.
50 | P a g e
Coca Cola have a range of joint ventures covering brands such as Nestea,
Schweppes and Dr. Pepper brands (outside the US), and RTD coffee under
the Illy brand.
Sales to the third quarter (September 2014) are showing a further slight
decline in revenues and gross profit. 9-month sales volumes as measured
were up by 2% on the comparable 2013 period, but net operating
revenues were down 2%, attributed to currency fluctuations and structural
changes,.
On October 21, 2014, the Company announced that it is

expanding its previously announced productivity
initiatives. This will focus on four key areas: restructuring
the Company's global supply chain, including
manufacturing in North America; implementing zero-
based budgeting across the organization; streamlining
and simplifying the operating model; and driving
increased discipline and efficiency in direct marketing
investments. The Company expects that the expanded
productivity initiatives will generate an incremental $2
billion in annualized savings, making the expected total
annualized savings $3 billion by 2019.
Nestlé
An international food-based group, Nestlé’s total sales in 2013 were CHF
92.2 billion, a ‘real growth’ of 3.1% on 2012. Sales are broken down both
by geography (Europe, Americas, ‘Asia, Oceania and Africa’) and product
(powdered and liquid beverages, water, milk products, prepared dishes,
confectionery, nutrition and healthcare, and petcare). The USA is the
biggest market at 25% of sales, and the biggest sector is beverages
(coffee, tea and milk drinks, but not soft drinks),
Water sales in 2013 were CHF 6.7bn, no change on 2012, but profit slid
slightly. Water is 7.3% of sales and 9.4% of profit.
51 | P a g e
Recent moves have seen Nestlé sell some of its L’Oreal shares to buy into
Galderma dermatology products, plus aesthetic products business
commercialization rights from Valeant Pharmaceuticals International, USA
and Canada. This is in line with its interest in ‘health and wellness’
although not apparently in pharmaceuticals (which it has sold).
Waters are seen as part of the ‘health and wellness’ platform. Growth was
recorded in all geographies, with Perrier, San Pellegrino, Buxton, Erikli and
La Vi being mentioned as strong performers. Nestlé Pure Life remains the
pioneer brand for emerging markets. Trading margin improved by 50 basis
points due to growth and greater efficiencies. About half of Waters sales
are in the USA, followed by Europe at 30%.
Half year results to June 2014 showed group organic growth of 4.7%,
composed of 2.9% real internal growth and 1.8% pricing. Total sales were
CHF 43 billion. The strong Swiss Franc continued to have a substantial
negative impact (–8.8%) and after divestitures, net of acquisitions (–
0.7%), reported total sales were down by 4.8%. Trading profits were CHF
6.4 bn.
Since this result the Swiss Central Bank has removed the Swiss Franc’s
value peg to the Euro, leading to a rapid increase in value relative to the
euro and dollar, and this can be expected to impact full year results for
2014 to a significant extent. (Sales denominated in Euro’s and Dollars will
be worth a lot less when translated to CHF).
There have also been significant changes to the Swiss corporate

governance code, resulting in annual elections for all directors, the
chairman to be elected directly by shareholders, and remuneration to be
decided at the AGM. This could be destabilizing in the short term, and
could make Nestlé a rather more ’exciting’ company to follow, until
systems bed in.
At the 2014 half-year stage, the Waters division had sales of CHF 3.7
billion, 6.1% organic growth, 7.3% real internal growth; and a 10.4%
trading operating profit margin, up 80 basis points.
52 | P a g e
‘Nestlé Waters delivered broad-based profitable growth

across geographies and brands with acceleration in the
emerging markets. The bottled water category continued
to show solid growth overall. Nestlé Pure Life continued to
drive our growth, particularly in emerging markets with
China, Egypt, Turkey and Pakistan the highlights. In the
developed markets our regional brands delivered steady
growth, notably Levissima in Italy, Poland Spring and Deer
Park in the United States, Buxton in the United Kingdom
and Hépar in France. The premium brands Perrier and
S.Pellegrino continued their good momentum and grew
double-digit in several developed markets.’
Danone
The second-largest global water company after Nestlé, Danone is a
diversified food and drink company with major interests in dairy products
and nutrition as well as bottled waters. The company defines its main
activities as fresh dairy, waters, early life nutrition and medical nutrition.
Emerging markets account for 51% of sales.
Recent investments have concentrated on the dairy sector in emerging

markets such as Africa, which sector was 56% of sales. Danone’s top
market is now Russia, with 11% of sales, followed by France with 10% and
the USA with 8%.
In full year 2013, sales were EU 21.2 bn. Waters were EU 3.9 bn, showing
6.8% like for like volume growth, and an 11.1% value increase. According
to the company ‘This performance was underpinned by steady growth in
the plain waters segment, driven by flagship brands Evian and Aqua, as
well as very strong pace in aquadrinks, in particular the Mizone brand’s
gains in Asia, but also growth for Bonafont con Jugo in Latin America and
Volvic Juiced in Europe.’
Total sales to Q3 2014 were up by 3.8% on a like for like basis, a 2% fall
in volume being balanced by a 5.8% increase in value. On a reported
53 | P a g e
basis, this means a 2.7% decline. Sales growth was especially strong in
emerging markets despite a product recall linked to a problem with
Fonterra milk powder. Fresh dairy products remain the main sector at 53%
of sales, while waters are 20%, an increase from 18% in full year 2013.
Waters recorded an 11.4% increase, comprising a 7% volume increase

contribution and 4.4% in pricing contribution.
The Waters Division comprises the natural waters business along with
aquadrinks (flavored and vitamin-enriched waters). The main international
brands include Evian and Volvic (France, Germany, United Kingdom,
Japan), Bonafont (Mexico, Brazil), and Mizone (China, Indonesia and India,
where it is marketed under the B’lue brand name). The Division also has
very strong local brands in Indonesia (Aqua), Spain (Fontvella and
Lanjarón), Argentina (Villavicencio and Villa del Sur) and in Poland (Zywiec
Zdroj).
The Division’s strategy is based primarily on the development of bottled

water consumption, notably in emerging countries, and in particular
through the following actions:
i. Promotion of hydration-related health benefits

ii. Management and environmental protection of high-
quality natural water resources;
iii. Development of an alternative product line with taste
qualities that are superior to other products and
categories: in the past five years, many of the Group’s
water brands have been rolled out as so-called
aquadrinks, i.e. waters flavored with natural fruit
extracts or fruit juice. The goal is to attract a new
consumer segment to the waters category by offering a
light and natural alternative to sodas and other sugary
beverages;
iv. Packaging innovation: in order to reduce its
environmental footprint, the Division regularly
redesigns its packaging in order to reduce the weight of
54 | P a g e
its bottles on the one hand and use new materials – e.g. plant-based
or recycled materials – to a greater extent on the other.
Red Bull
In 1984, Austrian entrepreneur Dietrich Mateschitz founded Red Bull. He
fine-tuned an energy tonic format from Thailand, developed a unique
marketing concept and started selling Red Bull Energy Drink on the
Austrian market in 1987. It expanded into Singapore (1989) and Hungary
(1992), then Germany in 1994, the UK in 1995 and in 1997, the US.
Sales in 2013 were EU 5.04 billion, with a 3.1% increase in volumes.

Growth was especially strong in India (55%), Japan (32%), Turkey (18%)
and Scandinavia (16%). It is reported to be the biggest selling energy
drink in the world. The ‘energy’ in the formulation is delivered by caffeine
and taurine.
‘Red Bull is targeting the core markets of Western

Europe and the USA and growth markets in the Far
East, while also focusing on the ongoing world-wide
roll-out of the Red Bull Editions. In spite of the still
uncertain financial and global economic climate, our
plans for growth and investment in 2014 remain very
ambitious, envisage a continued upward trend, and –
as always at Red Bull – will be financed from the
operative cash flow.’
The brand supports cutting edge pop music festivals

and extreme sports events, such as motoGP, F1 racing,
air racing, snowboarding and surfing. The company
also owns soccer and ice hockey teams.
Sources: Company Reports, Innova Market Insights
55 | P a g e
Major markets, other leading producers

France
Orangina
The brand has a complicated ownership arrangement. In the U.S. and
Canada, the brand is owned by Dr Pepper Snapple Inc, the company spun
off from Cadbury Schweppes in 2009. Orangina was originally produced for
the North American market by Schweppes in Canada, and then produced
under license by Mott's LLP of Rye Brook, New York. Motts is now part of
Dr Pepper Snapple.
Outside the US, in 2006, private equity firms Blackstone Group and Lion
Capital LLP took ownership under the company name Orangina
Schweppes. In November 2009, this was bought by Japanese brewer
Suntory, and the brand is now housed in a subsidiary called Orangina
Schweppes Group. In Britain, Orangina was manufactured under license by
A.G. Barr plc of Glasgow, but is now made by Suntory subsidiary Lucozade
Ribena Suntory.
As of 2012, the Orangina Schweppes Group was:
- Number 1 in the still fruit drinks market in Western

Europe.
- Number 2 in the non-cola sparkling soft drinks in
Western Europe.
- Number 3 in the sparkling soft drinks market in Europe
- Headcount: 2,500 people.
- Net Sales: 1.2 billion euro (+11% vs 2010).
- Core historical brands: Orangina, Schweppes, Oasis,
Trina, Pulco and La Casera. Generating 80% of
revenues.
Products are sold in over 80 countries - with Western

Europe central to the business, reaching as far as Eastern
56 | P a g e
Europe, Asia and Africa, the Middle East and French overseas territories
and departments.
Some brands are leaders in their categories such as Schweppes Tonic in

France and Spain, while in the still fruit drinks market, Trina is number 1
in Spain and Oasis in France and Belgium.
There are 4 Business Units: France (in France, production by Européenne

d'Embouteillage), Iberia, Belgium, and International.
UK
Britvic
Britvic manufactures and markets bottled juices, carbonated and still
beverages, sports drinks, mixers, and bottled water, in the UK and
internationally. It claims to be one of the two leading branded soft drink
companies in the UK, covering brands such as Robinsons, J2O, Tango and
Fruit Shoot.
As a bottler, it has exclusive agreements to make and distribute global

brands like Pepsi and 7UP on behalf of PepsiCo in the UK.
Britvic is the largest supplier of branded still

soft drinks in Great Britain and the number
two supplier of branded carbonates. It
supplies both retail outlets and has a strong
position in sales to the HRI sector, as well as
fully-serviced vending machines. It has
operations in France and Ireland as well as
the UK, and recently expanded in the US
with the Fruit Shoot brand, and into India.
Sales for FY 2014 were £1,344 million, up 2.4%, with volume down in UK
still products by 5%, due to the impact of recession on higher priced
products like J2O. However, UK carbonates rose by over 4%, driven by
sales of Pepsi, and profits rose by nearly 18% due to cost savings and
rationalizations.
57 | P a g e
Brands include Robinsons (dilutables), J20, Tango, R Whites Lemonade,

Britvic juices and mixers, Fruit Shoot kids’ soft drinks, the leading French
syrup brand, Teisseire, and Teisseire Fruit Shoot, Ballygowan water,
MiWadi squash and Club sodas.
PepsiCo owns approximately 5% of the group, has a director on the board,

and is partnering on the US Fruit Shoot rollout on a 15 year franchise.
Nichols
A quoted company but still run by members of the Nichols family, the
company makes and sells Vimto fruit-flavored soft drinks and the Panda
and Sunkist (licensed) brands of soft drinks to major retailers,
wholesalers, and cash-and-carry food and beverage operations in the UK.
The company also provides ‘dispense’ sales to UK HRI customers, and has
merged its Cabana and Benshaws business to form Nichols Dispense, third
largest supplier in the UK in the soft drink draft sector.
In 2013, sales reached £110 million, split almost equally between

carbonates and still drinks, of which £86 million was in the UK. A decision
to focus on value over volume led to an operating profit margin (pre-
exceptional items) increase to 20% (2012: 19%) and profit before tax
(pre-exceptional items) increased by 10% to £22.5m (2012: £20.5m).
The company is reducing exposure to promotions in heavily discounted UK

carbonates and sales have fallen 6%. Sales to Africa and the Middle East
have grown to £23m, of which £10 million are in the Middle East where
Nichols works in partnership with Aujan Industries and Coca Cola.
New products include a Levi Roots soft drink brand (Caribbean) and the
‘Extreme’ Sports and Energy brand, targeted at 18 – 24 year old males
who are interested in extreme sports events and linked to the Extreme
sports TV channel.
58 | P a g e
Nichols exports to 65 countries, and the Vimto brand has been licenced
onto a variety of products, including Vimto Candy Spray, Vimto Fruit
Numbers, Vimto Lollipops and Vimto Ice Lollies.
AG Barr
The company manufactures, bottles, distributes, and markets juices and
carbonated soft drinks, including IRN-BRU, Rubicon juices and Strathmore
water and will be bottling Snapple under licence from DPSG. In 2014, it
lost the Orangina bottling contract which was taken in-house by Suntory
subsidiary, Lucozade Ribena, when Suntory bought the brand.
In 2013, sales were £254m, and profit was £38 m. Carbonates account for
76% of sales, most of the rest being in still drinks and water, but there is
also a £1.4 million ice-cream and ‘other’ business – water coolers, vending
machines and vending supplies. Barrs primarily sell within the UK and
have a strong regional presence in Scotland, but Rubicon juices are sold
into Northern Europe, and non-UK sales were £6.7m in 2013.
The company stated that ‘Core brands, IRN-BRU, Barr,

Rubicon and (franchised) Rockstar, grew and
outperformed the market in the period with particularly
strong growth coming from the carbonates segment’
At half-year 2014, sales were up 5.4% and profit

increased by nearly 15%, not including the impact of
the Orangina contract termination. Carbonates grew by
4.5% and still drinks by 6.3%. New products launched
in 2014 include Rubicon Coconut Water, IRN-BRU ice
cream and BARR XTRA Cola.
Princes Limited
Princes Limited is owned by the Mitsubishi Corporation (MC), Japan's
largest general trading company with over 200 operations in c.80
countries worldwide.
59 | P a g e
The Princes group turned over £1.7 bn in 2013, up by 15% on 2012. UK

based, the group is now expanding into Europe with sales of £350m. Core
food products include canned fish, meat, fruit and vegetables, sandwich
fillings, pasta, sauces, cooking and olive oils and microwavable ready
meals. Core soft drinks products include bottled water, fruit juice, squash
and carbonates. The group has been buying or licensing established
brands from owners such as Unilever. Brands include Aqua Pura, Napolina,
Branston, Flora, Mazola, and Jucee.
As the country’s third largest soft drinks supplier, Princes supplies over
10% of the UK’s soft drinks. A state-of-the-art factory gives manufacturing
capability in every soft drinks category – squash, chilled and ambient fruit
juice & juice drinks, carbonates and water.
Princes entered the soft drinks market in 1991 and waters in 2004. As well
as the Princes juice brand, the group owns the Aqua-Pura natural mineral
water brand and Jucee, the number one selling squash in the impulse and
convenience sector. In addition, they supply Ocean Spray squash under
license.
Italy
Davide Campari-Milano
The group is the producer of Campari liqueur and Aperol as well as the
single-serve CampariSoda. Campari also makes and markets non-alcoholic
soft drinks Lemonsoda and Oransoda, which have a strong position in the
Italian market, and distributes other beverages, including Glenfiddich
Scotch whisky, Jägermeister, and Ouzo 12. Its exports reach some 190
countries.
In 2013, sales were EU 1.5 billion, of which soft drinks were 5.8% or EU
88 m. 25% of group sales are in Italy and 24% in the rest of Europe.
Recent spirits brands purchases have increased sales in the Americas to
41%, from 35%.
Lemonsoda is the market leader in single serve soft drinks in Italy, with
Oransoda on fourth place. Recent exotic flavor additions are Pinacolada-
60 | P a g e
soda and Mojitosoda. The main water brand is Crodo,

which covers a range of waters and water-based drinks
such as fizzy mineral water, lightly fizzy mineral water
and natural.
There are also soft drinks such as Chinotto, bitter orange

squash, tonic water, grapefruit and citron juice, offered
both in cans and Pet bottles. Soft drinks also include iced
teas, Softé, with flavors such as peach and lemon, and a
bitter non-alcoholic variety that is available in white and
red.
Other
Grupo Leche Pascual /Calidad Pascual
The group, a private company, makes and packages more
than 200 dairy, cereal, and beverage products, including
fluid milk (fresh and shelf-stable), cream, fruit juices,
mineral water, yogurt, liquid egg products, and breakfast
cereals. Brands include Bezoya water, Leche Pascual,
Bifrutas fruit drinks, and ViveSoy soy drinks. It has
recently launched some of its soy milk products in the UK
With the exception of South and Central America, Pascual

sells its products worldwide. The company is owned by
Spain's Pascual family. Sales are over EU 1 bn, and Spain
remains the largest market, but no detailed figures are
published.
The company was renamed Calidad Pascual in 2014, in line with the new
strategic plan for 2015 and beyond.
Sources: Company Reports, Innova Market Insights
61 | P a g e
Conclusions and projections

Market size projections, 2015 onwards
Carbonated soft drinks are a mature market in Europe and the US, and are
showing more signs of retrenchment, due as much to a change in
consumer tastes as economic events, although recessionary pressures are
important across Europe and China.
It is hard to see significant growth in these territories as although per

capita consumption varies widely by country, the relative strengths of
different beverage formats seem to be stable. Carbonates are suffering
from the development of more fashionable sports and energy drinks, and
the resurgence of ‘natural’ still juice and water products. Every 1% or 2%
growth is very hard-won, even by the biggest brands.
In developing countries, carbonates are growing rapidly in some but seem

to be reaching a consumption ceiling, and there are growing health
concerns even here. Mexico is about to impose a sugar tax on carbonates:
it has the highest per-capita carbonates consumption in the world, and a
rapidly increasing obesity problem. This link, whether between carbonates
as a group or the high fructose corn syrup used to sweeten many of them,
is being picked up by health regulators across the world, as is the question
over the safety of high caffeine or taurine ‘energy drinks’.
It still seems to be the case that although the concentration of the industry
and the level of new product development and investment can still
maintain volume sales, especially if consumer incomes rise again, overall,
in developed markets this will be a battle for sector share, not growth.
Bottled waters have also reached a stable level. Plain waters are now
competing with ‘enhanced’ products with added vitamins or flavors, and all
have faced reduced demand due to the economic downturn. Nectars and
high juice content products have suffered from higher prices as well as
health concerns over giving undiluted products to children: in Europe, they
are no longer seen as a straightforward ‘healthy choice’.
62 | P a g e
The main growth sectors appear to be still RTD products and fruit drinks.
Although growth across Europe is not strong, these products can support a
health message which preserves sales in difficult economic times. It is
notable that large US carbonates companies are increasingly buying up
health beverage and fruit juice producers although the Monster Beverages-
Coca Cola deal also shows the opportunities in niche products which can’t
be called health products.
The very high growth rates in China have now been subdued by the
economic situation, but at least there is actual growth, unlike the USA or
Europe. Because of the level of bad health publicity now attached to soft
drinks, and carbonates in particular, new product launches can only
counter the declines in mainstream colas and carbonates to a certain
extent. Use of ‘natural’ sweeteners like stevia is one way forward;
although these products remain minority sub-brands (like Coke ‘Life’).
To regain the momentum of growth, companies are moving further away

from the purely ‘liquid confectionery’ aspect of CSD’s, and from plain
bottled waters which are becoming commoditized, towards added value
products and those supported by the generally positive attitude to fruit
juices and ‘natural’ products. However, it has been a tough couple of years
for manufacturers, and there are no signs that 2015 to 2017 will be any
easier.
63 | P a g e

Informe Bebidas

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Informe Bebidas

Uploaded by

Copyright:

Available Formats

Healthier outlook for beverages

Healthier outlook for beverages

Healthier outlook for beverages ................................................. 3

Healthier outlook for beverages

The global carbonates market is dominated by three major players, all US

sweeteners such as high-fructose corn syrups (HFCS). Low calorie versions

One problem has been the perception of artificiality around aspartame or

Carbonates were a rapidly developing market in China

Carbonates are a target for health regulators, in terms

Bottled water is still growing in Europe despite consumer concerns over

Bottled water outsells carbonates by volume across most of Europe, but is

Juices and juice drinks

As a high-priced product, fruit juices are exposed to changes in consumer

Orange juice, whether frozen concentrate or non-frozen, is a major item of

Tropical fruits for juice such as pineapple, and citrus

Fruit juices have started to come under medical

Regional specialties like kvass and kefir are popular in

Production data from Eurostat shows increasing volumes overall. Some,

Production, EU 27, volume and value by sector, 2013

Value of production is not necessarily a good indicator for ultimate market

There appears to have been reorganization in major soft drinks

Soft drinks production is largely within the major consuming markets

Production, soft drinks, major markets 2009 - 2013

Source: Eurostat, Innova Market Insight

In ‘other water’, packaged water not made to EU mineral water

Production, mineral waters, major markets 2009 - 2013

Production, non-alcoholic mixed drinks, no dairy content, major markets

Source: Eurostat, Innova Market Insights

Orange juice is by far the largest single juice flavor in

Production, EU 27 juices, production by sector

Source: Eurostat, Innova Market Insights

Production of packaged fruit juice occurs across Europe: as noted, a lot of

Major nation producers, packaged fruit juices, by volume 2009, 2013

* likely to be the producers of the tons not separately specified

*Excluding grape juice and grape must

Source: Eurostat, Innova Market Insights

EU: Soft drinks consumption

Data on volume consumption of ready to drink (RTD) drinks across the EU

On a per capita basis, a pronounced downward trend can even be seen in

Europe: Consumption of RTD drinks by volume, 2008-13

Source: Canadean, Innova Market Insights

Greece. It will not be a coincidence that these are countries suffering a

RTD drinks market size, consumption by volume: 2005-2013

Euro million, manufacturer’s sale prices

*No recent figures are available for the Netherlands.

Source: Canadean, Innova Market Insights

Market consumption by volume by type: 2008, 2013

Source: Canadean, Innova Market Insights

Consumption profiles show that the UK is a ‘soft drinks’ markets, with a

Germany, Spain, Poland and Belgium show relatively equal weighting

Country profile by volume, %, 2013

Source: Canadean, Innova Market Insights

EU soft drinks* manufacturers – profile, 2012

Source: Eurostat, Innova Market Insights

In juices, the value of production and the number of enterprises is

EU Juice manufacturers – profile 2012

Countries with turnover of EU 100 m or more

Number Turnover Value

Source: Eurostat, Innova Market Insights

Exports and imports

Water is less frequently traded across boundaries. As most countries have

Exports ex EU 27, by type, by value, 2009, 2013