Fruit Juices and Health Drinks

Fruit Juices and Health Drinks
  • Report price : $ 828
  • Publication date : December 2008
  • Publisher : Key Note Publications Ltd

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Fruit Juices and Health 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.  
 


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