West Europe Quarterly Review, Q3 2004

In stark contrast to summer 2003 when West Europe generally sweltered under a tropical sun, quarter three 2004 suffered a dismal summer with the majority of West European countries recording below average temperatures and heavy rains, particularly in August. As might have been expected poor weather had a strong negative impact on overall soft drinks consumption. But it is the reversal of the long established underlying growth trend in packaged water consumption, which is the more surprising development in 2004. While carbonates have suffered, water has suffered more.

Only Switzerland registers positive growth

According to the latest Quarterly Review from beverage industry analysts, Canadean, in Quarter 3 total soft drinks sales were down 9.0% on the same period of 2003 and were below both the comparable quarters of 2002 and 2001, which also experienced unstable weather patterns. No country market, with the exception of Switzerland which recorded a very marginal increase, was able to register a positive performance.

Uncharacteristic declines for packaged water

There was no respite even for the usually resilient packaged water market which suffered a second quarter of uncharacteristic decline, with three of the major markets - Italy, France and Germany - registering stiff double-digit falls. Only Greece, Finland and Switzerland recorded any increment, with the former aided by the advent of the Olympic Games in Athens.

Carbonates were not immune either (-8.4%), with all segments suffering volume declines on the same period of 2003. Low calorie continued to hold up better than regular variants (-3.7% vs 9.3%) aided by increasing health consciousness and concerns regarding rising obesity rates, particularly amongst children.

Nectars fared better than juice, with the Netherlands and Spain both continuing to benefit from strong launch and promotional activities. Functional products (along with near water brands) rescued still drinks from sharper decline (-0.3%).

Better news for energy drinks and iced coffee

Amongst the smaller categories, the only two to record positive growth were: the miniscule iced/rtd coffee drinks sector - less susceptible to climatic change than iced/rtd tea drinks and benefiting from growing consumer awareness; while energy drinks continued to retain its buoyancy, driven by both leading international brands and growing own label activity (e.g. Germany)

2004 forecast revised down

Following a second dismal quarterly performance, where the summer weather was notable only in its absence and assuming a conservative economic development and no significant industry moves, Canadean's soft drinks forecast for 2004 has been revised downwards to 3.3%.

For further information on Canadean's West Europe Quarterly Review, please contact Debra Richards on 01256 394224.

emily.neill@canadean.com

This article was first published on brandrepublic.com