Soft drinks industry not expecting growth until 2010

The soft drinks industry will not see growth until next year, with the bottled water and smoothie sectors particularly hit by a decline in volume in 2008, according to the latest British Soft Drinks Association report.

The BSDA commissioned 2009 UK Soft Drinks Report, carried out by Zenith International, found that across all sectors, volume declined 1.1% to 13,905 million litres. The industry did see a marginal 1% increase in value to £13bn.

Bottled water reported a decline for the second year running, 5.5% down on 2007 volumes. The BSDA report forecasts that 2009 is likely to be another challenging year for the category.

The bottled water industry body, Natural Hydration Council, is hoping to redress this with the launch of its first ad campaign promoting the benefits of hydration and drinking water.

In contrast, the enhanced water category, which includes brands such as Glaceau Vitamin Water and V Water, enjoyed an 11% growth.

Sports and energy drinks, such as Red Bull and Gatorade, also proved strong with a volume growth of 11%.

Carbonates remained steady, reporting a volume increase of 1.7% in 2008.

Consumers’ focus on health and well being, together with a desire for naturalness benefited the not from concentrate (NFC) fruit juice category led by Tropicana, with volumes up ten million litres. The growth now sees it represent over 45% of the chilled juice segment.

In contrast however, the overall retail value of fruit juice declined last year, down 4% to £1900m.

The smoothie sector, led by Innocent, was a major victim of the economic downturn, will volumes falling 20% last year, while category’s market share remained static at 5%.

While the BSDA says it does not expect soft drinks growth to return until next year, by 2013 it forecasts that the market could reach 14890 million litres, with per person consumption hitting 239 litres.

BSDA director general, Jill Ardagh, says: “It is encouraging to see that the soft drinks market is holding up during the economic downturn and after the legacy of two disappointing summers.

“The industry’s ability to provide the public with a wide range of enjoyable and affordable drinks will ensure it remains resilient despite the tough climate.”