Full of Promise

Sept. 20, 2002
The European Market for Bottled Water

About the author: Zenith International is a European drink consultant and may be reached at +44 (0) 1225 327900; www.zenithinternational.com.

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East Europeans drank almost 10 percent more soft drinks in 2001, pushing consumption past the 20,000 million liter mark for the first time, according to the 2002 East Europe Soft Drinks report from Zenith International. Volumes have jumped 36 percent since 1997, despite the economic troubles of the late 1990s. "1999 was a particularly difficult year after the collapse of the Russian rouble in August 1998," commented Gary Roethenbaugh, Zenith research director. "Since then, East Europe's soft drinks industry has been reinvigorated by a flurry of restructuring activity including the privatization of state-owned enterprises, increased foreign investment and new joint ventures."

The two fastest growing countries between 1997 and 2001 were Serbia and Bulgaria, both achieving gains in excess of 70 percent. The two biggest national markets of Poland and Russia had contrasting fortunes in 2001. Russia speeded up to top the rankings with growth of 20 percent, while Poland slowed to hit the bottom with growth of 4 percent. Individual consumption was highest in the Czech Republic at 239 liters per person in 2001, more than eight times the level in the Ukraine at 29 liters. The East European average of 64 liters has a long way to go before catching the West European figure of 223 liters.

Carbonated soft drinks were the largest overall product market with a 40 percent volume share, but growth has been modest. Bottled water, however, has consistently managed double-digit growth to reach 30 percent.

The new Zenith report provides a host of other details including

*               Flavors—Colas lead carbonates with a 31 percent share, while orange is most popular for fruit juice/nectars and dilutables.

*               Packaging—PET bottles have a commanding 61 percent share, followed by glass on 21 percent and cartons on 13 percent, with cans held back to just 2 percent.

*               Companies—The top 50 national operators are responsible for 47 percent of total volume including 12 entries by Coca-Cola and 7 by PepsiCo.

"East Europe represents a clear strategic priority for the international soft drinks leaders," added Roethenbaugh. "But the importance of local operators should not be underestimated. They still account for the majority of sales."

The Zenith report also offers other insights into East European soft drinks trends.

*               Bottled water—Six national markets have doubled since 1997.

*               Energy drinks have been slow to build.

*               Kvass malt-based beverages staged a recent revival.

*               Raspberry is the third most popular dilutables flavor with a share of 8 percent.

Concluding with detailed forecasts, Zenith predicts East European soft drinks growth of between 7 percent and 10 percent per year to pass 29,000 million liters by 2006.    

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