In 2006 the soft drinks category grew seven per cent to reach sales of £8.3billion in value, revealed the Britvic Soft Drinks Report 2007.
Apart from 2003 where the extraordinarily hot summer drove higher sales, this is the industry's highest growth level in six years.
Overall, the UK's annual per capita consumption rose four per cent to 251 litres as drunk - a 22 per cent increase since 2001.
Across all channels cola, pure juice, water and juice drinks continued to lead the market in value and volume. A continued growth in stills versus carbonates and no-added-sugar/diet variants confirmed the better-for-you trend continues to influence the industry.
"The past five years have been an immensely significant time for the soft drinks category and 2006 was no exception. The escalating trend towards health and well-being and the introduction of new legislation continued to shape the category," said Andrew Richards, sales director, Britvic.
"However despite these rapidly changing conditions, the industry grew a remarkable seven per cent. This exceptional performance is testament to manufacturers' innovation and understanding of changing consumer needs."
A comparison with major European markets revealed a marked difference in consumption patterns between the UK and its European counterparts, particularly in relation to bottled water consumption.
"Despite recent growth, the bottled water category still only accounted for around 20 per cent of total soft drinks volume in the UK in 2006. This is in contrast to all other European countries where volume is over 50 per cent, which demonstrates the scale of opportunity for growth of the category domestically," said Andrew Richards.
Soft drinks manufacturers threw their weight behind the better-for-you trend in 2006 with innovation and marketing spend focused around this area. Overall soft drinks manufacturers invested £150m in marketing their brands in 2006, with CCE, Britvic, PepsiCo and Unilever contributing the most spend with £61m between them.
Soft drinks remains best performer in grocery top ten with sales up eight per cent to £5.9bn.
In the take-home channel, soft drinks grew eight per cent in value to reach £5.9billion in 2006, continuing its lead as the largest grocery category.
Its strong growth outperformed all other categories in the top 10 (with the exception of toilet tissue which saw equal growth of eight per cent).
A look at the grocery industry over the past five years confirmed that soft drinks sales have grown 44 per cent since 2001, representing £1.8billion in value added to the category and one of the strongest growth performance of all categories in the top ten.
According to Andrew Richards, sales director, Britvic: "In 2006, still soft drinks continued to outperform carbonates with pure juice, water, functional and smoothies driving value share growth
"Sales of fruit flavoured carbonates continued to decline while sales of other carbonates including cola, lemonade, non-fruit carbonates and mixers remained stable. Cola, pure juice and water led the category in value and volume."
He added, "The take-home market saw a continuation of trends driving the growth of stills and better-for-you categories, with manufacturers responding with innovation to cater for a range of changing consumer preferences."
"Looking ahead, there will be a continued focus on health and well-being and natural ingredients, particularly as product labelling further refines the way consumers choose their soft drinks."
Coca-Cola, Lucozade and Robinsons were the top three brands, whilst CCE and Britvic remained the top two suppliers.
Sub-category performance summary:
Cola remained the number one sub-category with growth of two per cent to reach £1.2bn in value. Diet and no-added-sugar continued to drive category growth and accounted for 51 per cent of all cola sales.
Pure juice was the second largest sub-category and third fastest growing category with value sales up 14 per cent to reach £1.1bn - just behind the cola category in value.
Water - the third largest category - also continued its strong growth, up 11 per cent to achieve £643m in value sales.
Juice drinks grew nine per cent to £529m in value with the continuing introduction of new brands to the category.
Functional drinks enjoyed another successful year as value grew 18 per cent to £520m.
2006 was a strong year for squash, with growth of five per cent to £465m.
Smoothies was the fastest growing sub-category, up 102 per cent to £163m. However, whilst this sub-category has attracted new entrants, it holds only three per cent of the total soft drinks category in take-home.
Fruit-flavoured carbonates declined by nine per cent, showing a slight recovery from its 12 per cent decline in 2005.
Non-fruit carbonates only grew one per cent in value, while mixers declined one per cent as consumers switched to 'better-for-you' sub-categories.
Dairy drinks grew four per cent to reach £394m in value.
Adult drinks grew six per cent to reach £107m in sales.
Soft drinks growing faster than alcoholic beverages with sales up five per cent to £2.4bn
In 2006, the soft drinks category in on-premise grew five per cent in value sales - faster than total alcoholic beverages - to reach sales of £2.4billion.
According to Andrew Richards, sales director, Britvic, "The soft drinks category is the third largest in the licensed trade with its strong performance in 2006 placing it just short of the spirits category in value.
"Cola and lemonade led the channel in terms of value and volume, but growth was driven by juice drinks, squash and bottled water."
He added, "With soft drinks growing faster than total alcoholic beverages, it is clear this category is growing in importance in the pub environment.
"As the smoking ban comes into force in 2007, soft drinks will become a more important part of the on-premise trade as licensees cater for new customers and a likely increase in the demand for food."
Andrew Richards concluded, "While the health and well-being trend has prompted growth in bottled water and fruit juice, it is evident that customers are still seeking indulgent and premium soft drinks when they visit a pub, bar or restaurant.
"This is demonstrated by the continued success of cola and the growth of premium packaged soft drinks."
Coca-Cola, Pepsi and R Whites were the top three brands, while Britvic remained the number one supplier, followed by CCE.
In the hotels, restaurants and catering channel (HORECA), soft drinks also performed well with value up 10 per cent. Fruit juice was the driver of growth with sales up 21 per cent to £61m. Energy, bottled water and fruit drinks also showed strong growth across this channel.
Sub-category performance summary:
Cola remained by far the largest sub-category in the on-premise, up four per cent in value to reach £969m in sales - accounting for 41 per cent of total value and 47 per cent of total volume.
The second largest sub-category, lemonade, performed strongly with value sales up six per cent to £445m.
Juice drinks - the third largest sub-category - grew nine per cent to £206m.
Mixers grew three per cent to reach £165m in sales.
Squash had an exceptional year, with value up ten per cent to reach sales of £170m.
Water was the fastest growing category, up 28 per cent in value and 24 per cent in volume with sales of £75m.
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