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According to the latest report from Canadean on the global juice & nectars market, by the end of 2008 global juice and nectar consumption will have reached 39 billion litres, the equivalent of almost 6 litres for each person around the world. This represents a compound annual growth rate since 2005 of 2.8%, slowing down from the 4.2% enjoyed by the category between 1999 and 2005. Despite its strong associations with the vogue attributes of health and wellbeing, growth in the juice & nectars category can only be described as modest.
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The poor performance of some of the leading markets can be partly accredited with causing the slowdown. By far and away the biggest volume market for juice & nectars is the United States, which accounts for more than a quarter of global sales, this is only slightly less than the whole of West Europe and it is the sluggish performance here that is handicapping the whole global market. Per capita of 31.5 litres might suggest that the US market is already approaching saturation point, however in the States, the juice category has slipped the wrong side of the health line and it is this factor that is behind the poor performances of the category. The carbohydrate content of juice prompted the juice category to record one of its worst years on record in 2004, reflecting the popularity of low carbohydrate diets (such as Atkins). Some American drinkers have switched to the nectars category but this has not compensated for the overall loss.
To a lesser extent, the German market, which accounts for just under 10% of global juice & nectar sales, is also contributing to the category’s weaker showings. In Germany, it is the nectar category that has been dragging the category down; nectars have been losing out to the buoyant still drink category for a few years now. In a very health sensitive German market, still drinks may have a lower juice content but they do have a high ratio of added vitamins, minerals and other substances that boost the products’ health attributes.
The growth in still drinks in general has undoubtedly played a part in taking the shine of the juice & nectars performance. The still drinks category may be attracting consumers leaving the carbonates category but there is little doubt that the still drinks category is also poaching drinkers from the juice & nectars category. In volume terms between 2005 and 2009 the juice & nectars category is expected to expand by a little over three billion litres, while during the same period, the market for still drinks will add over four billion litres. The more refreshing qualities of still drinks gives them advantages over juice & nectars during the key consumption occasions away from the juice & nectar stronghold of breakfast.
The two cola giants have maintained their faith in the category and 2005 has seen Coca-Cola and PepsiCo strengthen their presence in the global juice & nectar marketplace. Last year saw the Coca-Cola Hellenic Bottling Company and the Atlanta-based Coca-Cola Company agree to buy 100 per cent of Multon, a big Russian juice producer; this was followed by the announcement that Coca-Cola Brasil was to purchase Sucos Mais, a major Brazilian juice operator. Meanwhile PepsiCo snapped up the founder of the UK Smoothie market; PJ Smoothies and the German based fruit drink brand Punica from Sunny Delight Beverages.
Currently, the juice & nectars category faces a new threat in the form of price rises brought on by poor orange and apple harvests in some parts of the world. These are anticipated to have implications in the short term.