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Industry mood lifts as European commercial beverages growth declines ease in Q4 2013

Canadean’s latest Quarterly Beverage Tracker reveals an upward shift in industry confidence levels, despite only a marginal improvement in consumption in the final quarter of 2013.

In the final quarter of 2013, the generally milder weather across the European region is likely to have contributed to the marginal slowdown in the rate of decline in commercial beverages consumption. Overall Q4 consumption in both West and East Europe was flat versus the corresponding period of 2012.
Against this backdrop, and despite the still prevailing bleak economic conditions in many European countries, with staggeringly high youth unemployment rates, tax hikes and weak consumer spending power, Canadean’s latest quarterly mood monitor indicates a notable upward shift in industry mood. In West Europe over 60% of markets reported more optimism in industry sentiment, while in East Europe one-third of markets registered improvement on the previous quarter. Even in some of the most economically-stricken markets, such as Italy, Spain and the Czech Republic, business confidence proved more optimistic.
Looking ahead, Canadean’s preliminary prediction for 2014 commercial beverages consumption is for another difficult year, given the depths of the still unresolved problems in many European countries. Political and social unrest makes the outcome in markets such as Ukraine difficult to call, but the outlook overall is more optimistic, with some easing in the rates of decline at both regional and category level forecast.
Product innovation and differentiation addressing changing consumer demographics and increasing consumer savvyness regarding ingredients credentials, will play an important role going forwards. A strong focus on lowering distribution and production costs, but investment in brand equity and added value product extensions targeting differing health and lifestyle needs, can be expected to be highly visible in 2014. In the soft drinks arena, more stevia, low sugar and organic launches, use of natural ingredients and transparency of production methods are anticipated, given the ongoing health/calorie intake and sustainability debates. Price point will, however, remain key across the commercial beverages industry.

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