Executive Summary
The soft drinks market enjoyed strong growth in 1994 and 1995, reaching a
total value of £6.75bn by 1996. Hot summers were beneficial, but renewed
`marketing wars' among the big brands and product innovation have continued the
growth pattern into 1996.
Carbonated drinks are worth £4.2bn and, therefore, account for 62.2% of
the sector. This market share has changed little over the years, because there
are growth categories in each of the other markets: dilutables such as squash
and their `ready-to-drink' (RTD) versions (£950m), fruit juices
(£1.17bn) and bottled water (£430m).
The dominant carbonates segment is driven by the `cola wars' conducted
traditionally between Coca-Cola and Pepsi, but recently involving Virgin and
the premium brands sold in supermarkets, such as Sainsbury's Classic Cola. The
cola category, now worth over £2bn, has increased from 43% to 50% of
carbonate sales over the last 5 years.
Fruit-flavoured carbonates have also benefited from overall market growth. As
in colas, sales are increasingly concentrated on a few brands -- Tango, Irn
Bru, Lucozade, Lilt and Schweppes are outstanding. The dilutables segment
(squash, cordials, etc.) tends to domination by own label, with Ribena (from
SmithKline Beecham) and Robinson's Barley Water (bought by Britvic in 1995) the
outstanding brands.
The two dominant producers are Coca-Cola & Schweppes Beverages (CCSB) and
Britvic. They have 38% of the market between them, built on their respective
distribution for Coke and Pepsi, but including fruit carbonates, dilutables,
mixers, juice and bottled water brands. In 1996, Cadbury Schweppes has
withdrawn from direct control of C-C&SB, following its purchase of Dr
Pepper/7-Up in the US in 1995.
Massive advertising campaigns continue to drive the market (e.g. £34.1m
spent on Coca-Cola and Diet Coke in 1996) and there is still potential for
higher UK consumption. New drinks categories are constantly emerging; the most
important recently have been adult-oriented fruit drinks, such as Oasis and
Fruitopia and sports or energy drinks. Both categories will develop adult
consumption and add to the traditional market among children.
Twelfth Edition 1996
Edited by Zoe Ratcliff
ISBN 1-85765-620-2
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