Fruit Juices and Health Drinks

• Publication date: December 2008

The UK market for fruit juices and health drinks was worth an estimated £2.92bn in 2007, having increased in value by 5.6% on the previous year. However, poor summer weather undermined sales and, in volume terms, they declined by 1%, to 2.66 billion litres, in line with sales in the total soft drinks market, of which this market has a 41% share. The market is divided into three broad sectors: fruit juices, health drinks and fruit drinks....

The UK market for fruit juices and health drinks was worth an estimated £2.92bn in 2007, having increased in value by 5.6% on the previous year. However, poor summer weather undermined sales and, in volume terms, they declined by 1%, to 2.66 billion litres, in line with sales in the total soft drinks market, of which this market has a 41% share.

The market is divided into three broad sectors: fruit juices, health drinks and fruit drinks. In general, carbonated drinks are excluded, but there is some overlap, as health drinks are available in carbonated forms, as well as ready-to-drink (RTD) formats and cordials.

The total fruit juices and health drinks market showed strong value growth across the review period (2003 to 2007) and, until 2007, rose at a healthy pace in volume terms. Demand for convenient and healthy products have been the main drivers of growth. Products such as juice and smoothies are regarded as being innately healthier than many alternatives, such as carbonated drinks, tea and coffee. They are also very convenient in that they are portable and can be drunk anywhere, and they are available from a broad range of outlets.

Suppliers have exploited the health and convenience benefits by investing heavily in new product development (NPD), especially in premium products. This resulted in fast-growing sales of smoothies and freshly squeezed juices, as well as lifestyle energy products and drinks offering functional benefits. Indeed, premium-priced glucose and stimulant drinks, sports drinks and smoothies were the fastest-growing subsectors of the market over the review period. The long-running trend towards diet or no-added-sugar variants has slowed as consumers increasingly prefer options containing natural sugar.

Large multinational companies, led by Coca-Cola Enterprises Ltd and Britvic Soft Drinks Ltd, dominate this market. There are also some smaller players such as The Juice Doctor, which rolled out an eponymous juice brand nationally in 2006. Small niche players can also become highly successful companies in their own right. Innocent Drinks, which was founded in 1999, dominates the smoothies sector, overshadowing beverage giants such as PepsiCo.

The economic slowdown is likely to have an impact on the market. Although the sector will continue to benefit from its healthy image and the convenience that these products offer, the economic downturn is already having an impact on sales of premium products such as smoothies, and consumers are likely to become even more cost conscious as the recession intensifies in 2009. Key Note expects consumers to trade down to cheaper products and also to cut down on their overall consumption, thereby restricting both value and volume growth. Consequently, market growth over the next 5 years is unlikely to match that of the previous 5 years, and the impact will be felt across all sectors.  
 

Juice Industry in the United Kingdom

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

Fruit Juices

Health Drinks

Fruit Drinks

MARKET TRENDS

Credit Crunch Hits Smoothies Market

Health and Convenience Remain Market Drivers

ECONOMIC TRENDS

Gross Domestic Product

Table 1: UK Gross Domestic Product at Current and

Annual Chain-Linked Prices (£m), 2003-2007

Household Disposable Income

Table 2: UK Household Disposable Income Per Capita (£), 2003-2007

Inflation

Table 3: UK Rate of Inflation (%), 2003-2007

Unemployment

Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007

Population

Table 5: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007

MARKET POSITION

The UK

Table 6: Fruit Juices and Health Drinks’ Share of the Total UK Soft Drinks Market

by Volume (million litres and %), 2003-2007

Overseas

2. Market Size

THE TOTAL MARKET

By Value

Table 7: The Total UK Fruit Juices and Health Drinks Market by Sector

by Value (£m at rsp), 2003-2007

Figure 1: The Total UK Fruit Juices and Health Drinks Market by Sector

by Value (£m at rsp), 2003-2007

By Volume

Table 8: The Total UK Fruit Juices and Health Drinks Market by Sector

by Volume (million litres), 2003-2007

Figure 2: The Total UK Fruit Juices and Health Drinks Market by Sector

by Volume (million litres), 2003-2007

BY MARKET SECTOR

Figure 3: The Total UK Fruit Juices and Health Drinks Market by Sector

by Value (%), 2007

Fruit Juices

Table 9: The UK Fruit Juices Sector by Value (£m at rsp and %), 2003-2007

Health Drinks

Table 10: The UK Health Drinks Sector by Value (£m at rsp and %), 2003-2007

Fruit Drinks

Table 11: The UK Fruit Drinks Sector by Value (£m at rsp and %), 2003-2007

OVERSEAS TRADE

Imports

3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES

Table 12: Number of UK VAT-Based Enterprises Engaged in the Manufacture

of Fruit and Vegetable Juices, and Mineral Waters and Soft Drinks

by Turnover Sizeband, 2007

EMPLOYMENT

Table 13: Number of UK VAT-Based Enterprises Engaged in the Manufacture

of Fruit and Vegetable Juices, and Mineral Waters and Soft Drinks

by Employment Sizeband, 2007

REGIONAL VARIATIONS IN THE MARKETPLACE

DISTRIBUTION

Table 14: Distribution of Fruit Juices, Health Drinks and Fruit Drinks

by Type of Outlet by Value (%), 2007

HOW ROBUST IS THE MARKET?

LEGISLATION

KEY TRADE ASSOCIATIONS

British Soft Drinks Association

European Fruit Juice Association

4. Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

Britvic Soft Drinks Ltd

Coca-Cola Enterprises Ltd

Cott Beverages Ltd

Del Monte (UK) Ltd

Gerber Juice Company Ltd

GlaxoSmithKline PLC

Princes Ltd

Other Companies

AG Barr PLC

Calypso Soft Drinks Ltd

Merrydown PLC

Nichols PLC

Red Bull Company Ltd

Tovali Ltd

Tropicana UK Ltd

OUTSIDE SUPPLIERS

Raw Materials

Processing, Distribution and Packaging

MARKETING ACTIVITY

Main Media Advertising Expenditure

Cordials

Table 15: Main Media Advertising Expenditure on Cordials and Organic Drinks

(£000), Years Ending June 2007 and 2008

Fruit Juices and Still Fruit Drinks

Table 16: Main Media Advertising Expenditure on Fruit Juices

and Still Fruit Drinks (£000), Years Ending June 2007 and 2008

Recent Campaigns

Capri-Sun

Fanta

Nestlé Boosted Smoothies

Robinsons Fruit Shoot

Vimto

Other Activities

Sports Sponsorship

Character Licensing

Exhibitions/Trade Shows

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

CONSUMER PENETRATION

Fruit and Vegetable Juices

Table 17: Penetration of Ready-to-Drink Fruit and Vegetable Juices, Including

Smoothies, by Sex, Age, Social Grade and Region (% of adults), 2008

Frequency of Consumption

Heavy Users

Medium Users

Light Users

Table 18: Frequency of Consumption of Ready-To-Drink Fruit and Vegetable Juices,

Including Smoothies, by Sex, Age, Social Grade and Region (% of adults), 2008

Fizzy Soft/Energy Drinks

Table 19: Penetration of Fizzy Soft/Energy Drinks by Sex, Age, Social Grade

and Region (% of adults), 2008

7. Current Issues

CORPORATE DEVELOPMENTS

Coca-Cola Targets Emerging Markets

PepsiCo Cuts Jobs and Lowers its Forecast

NEW PRODUCTS

Coca-Cola to Launch High-Caffeine Energy Drink in the UK

HEALTH ISSUES

Could Fruit Juice Affect Absorption of Drugs?

Can Juice Help Prevent Clogged Arteries?

Liberal Democrats Propose Juice Tax Cuts

More Concern Over Energy Drinks

8. The Global Market

OVERVIEW

THE US

9. Forecasts

INTRODUCTION

Economic Background

Table 20: Forecasts for the UK Economy

(%, million and 000), 2008-2012

FORECASTS 2008 TO 2012

Table 21: The Forecast UK Fruit Juices and Health Drinks Market by Sector

by Value (£m at rsp), 2008-2012

Figure 4: The Forecast UK Fruit Juices and Health Drinks Market by Sector

by Value (£m at rsp), 2008-2012

MARKET GROWTH

Figure 5: Growth in the UK Fruit Juices and Health Drinks Market by Sector

by Value (£m at rsp), 2003-2012

FUTURE TRENDS

Demographics

Table 22: Projected UK Population by Age (000), 2006-2031

Product Development

Competitor Forecasts

10. Company Profiles

Britvic Soft Drinks Ltd

Coca-cola Enterprises Ltd

Cott Beverages Ltd

Del Monte (UK) Ltd

Gerber Juice Company Ltd

GlaxoSmithKline PLC

Princes Ltd

Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Bisnode Sources

Understanding TGI Data

Number, Profile, Penetration

Social Grade

Standard Region

Key Note Research

The Key Note Range of Reports