Paul Thomen

Wednesday, 19 June 2013

United Kingdom, Portugal & Hungary Soft Drinks Market 2017

Soft Drinks in United Kingdom, Portugal & Hungary report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data (2008-2012), allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market – be they legislative, distribution, packaging or pricing issues. Forecasts to 2017 illustrate how the market is set to change.

Soft Drinks Market in the United Kingdom

The UK soft drinks industry saw a limited effect from the continued economic pressures during the review period and in 2012. The year was characterized by small but stable growth in value terms and stronger volume growth than previously. The off-trade channel continued to grow at the expense of the on-trade, mainly driven by the ongoing cocooning trend. Within the soft drinks category overall, it was RTD coffee, followed by sports and energy drinks, that showed the strongest performance in 2012.

On-trade soft drinks sales in the UK saw a continued decline in 2012, directly affected by prevailing consumer attitudes to spending more time at home and the wide acceptance of ready-to-eat packaged food. Apart from the trend for convenience, consumers have also adapted to the economic climate by cooking more at home and have increasingly bought multipack drinks to consume at home.

Due to limited demand and declining spend on eating and drinking out, many bars and pubs, especially those located in office areas and high streets, have seen a slowdown in sales. There has also been a rise in tap water and table water consumption as many consumers chose not to opt for a soft drink in restaurants. Additionally, the corporate sector reduced the use of on-trade venues to host events, such as office parties, in the wake of pay freezes and staff redundancies.

Soft Drinks Market in Portugal

Total volume sales of soft drinks declined sharply during the review period. This was chiefly due to Portugal's poor economic performance. The country saw real GDP decline during three of the years of the review period, with the sharpest decline seen in 2012. Consumers faced declining disposable income levels due to rising unemployment, static wages and government austerity measures. Consequently, many cut back on purchases of soft drinks and sought out the cheapest possible options when buying these products. As a result of consumers' price-sensitivity, soft drinks saw an even sharper total constant value sales decline than volume decline during the review period.

Portugal is expected to see a return to slow economic growth from 2014 onwards. However, many consumers are likely to continue to struggle and will remain highly price-sensitive. Consequently, while soft drinks are expected to return to a slight total volume growth for the overall forecast period, this will be accompanied by a small constant value sales decline. The off-trade will furthermore be solely responsible for total volume growth, with on-trade volume sales continuing to decline due to poor domestic demand.

Soft Drinks in Hungary

The first business results of explicit government efforts to change consumption patterns and make customers prefer healthier drinks were witnessed during 2012. The chips tax on products with high levels of sugar launched in late 2011 and designing new product formulas with lower tax was the major topic for soft drink manufacturers. Concentrates with a fruit content of less than 33% were also heavily taxed, whilst those with more fruit enjoyed lower tax. Carbonates and energy drinks manufacturers had to raise their prices, which prevented growth in consumption. The previously high rates of growth posted by energy drinks slowed, whilst the consumption of cola carbonates declined further as consumers shifted towards bottled water and RTD tea.

The leading positions of the top three players Coca-Cola, Fovárosi Ásványvíz és Üdítoipari Zrt and Szentkirályi Ásványvíz Kft were stable in 2012. Private label and low-priced, mainly Hungarian brands and manufacturers with local production saw their volume sales increase. Manufacturers maintained a dual brand portfolio, keeping both upscale customers with premium brands and price-savvy ones with value brands, or allocated more production capacity to retailer brands.

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