Executive Summary
This Key Note Market Report on fruit juices and health drinks covers the market for fruit juice, health drinks and fruit drinks. In general, carbonates are excluded from this report, although drinks of this type can also be fruit-based. However, there is some overlap with the carbonates sector as health drinks, which might be carbonated and available in ready-to-drink formats of cordials, are included. In 2003, the total UK fruit juices and health drinks market was worth an estimated £2.19bn at retail selling prices (rsp), a rise of 6.6% on 2002. Fruit juice was the largest sector in 2003, accounting for 40.2% of the total market.
Despite the relatively mature nature of the fruit juice sector, the market grew strongly in terms of both value and volume between 1999 and 2003. In addition, fruit juices, fruit drinks and health drinks recorded a high household penetration level. A number of factors contributed to this growth, including the increasing interest in health and diet, which is undoubtedly one of the main drivers. In general, fruit juices and health drinks are regarded as healthy choices, certainly in comparison to alternative soft drinks, such as carbonates. In addition, the strength of the economy and rising household disposable income levels have contributed to the growth of premium-priced products, such as freshly-squeezed juice.
Manufacturers have launched innovative products, which are popular with consumers; for example, Sunny Delight proved to be one of the marketing phenomena of the past decade. Although sales of Sunny Delight eventually declined sharply as a result of concerns relating to the high sugar and low juice content of the drink, many consumers switched to more natural juice drinks rather than leaving the market altogether. In the health drinks sector, Red Bull has enjoyed astonishing success and, since its launch in 1995, has contributed to growing sales in this sector. Indeed, Red Bull is now the most significant brand in the health drinks sector in terms of value, ahead of Lucozade.
Over the next 5 years, Key Note forecasts that the fruit juices and health drinks market will remain healthy, with sales growing by an average annual rate of just over 6%. Increasing concerns relating to health and diet will play a major role in the market, as consumers move away from products that are perceived as being unhealthy, such as carbonated soft drinks, towards more natural alternatives, such as fruit juices. In addition, growing awareness of the importance of the Government's 'five-a-day' campaign to increase fruit and vegetable consumption will encourage new entrants into the market. In particular, younger consumers might regard fruit juice as a convenient way of boosting their consumption of fruit and vegetables.
The fruit juice sector will be boosted by growing demand for premium-priced products, such as smoothies. In addition, heavy marketing expenditure and the introduction of new products that are fortified with vitamins and other additives should help to drive sales. In some European countries, drinks with added vitamins A, C and E have proved very successful. Although this sector is still in its infancy in the UK, it could show rapid growth over the next 5 years. |