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Economic downturn stalls growth in the UK beverage market

The UK beverages market has been witnessing slow growth in the recent years, inspite of having exhibited tremendous growth potential in the past. The recent economic slump resulting in tight household budgets, coupled with unemployment, banking crisis and the continuing effects of a double-dip recession on consumer spending are considered as the key factors that decelerated the UK beverage market.

This report: Quarterly Beverage Tracker: United Kingdom offers a comprehensive analysis of the beverages market in UK, offering data information and market forecasts. The report identifies the key drivers, market trends as well as presents a detailed market overview.


Market overview

The overall commercial beverage consumption decreased by 0.7% in the review period Q1 2013, though segments like packaged water, energy drinks, iced drinks and coffee experienced growth during this period. Additionally, the sports drink market registered slow growth, while the alcoholic beverages market saw a rise in demand. Despite the economic downturn, the U.K. recorded positive volume sales in the beverage industry; however, value sales suffered as consumers traded down to items that offered the best value for money. Growth areas were strong particularly for the health-positioned beverages and functional drinks. Given the rising health consciousness, the total soft drinks consumption fell by 2.5%, while the UK bottled water market continued to recover, growing by 3.3% in volume.


Market influencers

The double-dip recession coupled with banking crisis and severe unemployment issues crippled the spending power of the UK consumer population. British consumers are likely to remain price-conscious and will continue to cut spending on non-essential items. Beverage consumption is therefore expected to decline, as most of these products are not considered necessities and are easily replaced by standard versions.


Key players

The leading brands in the market include private label companies, Coca Cola, Pepsi, Lucozade, Robinson squash, Volvic, Tropicana, Innocent, Ribenna and Red Bull with private label occupying 31.9% of the total market share. 


Market outlook

The beverage industry in the UK is expected to continue at its sluggish pace, till the economy starts to look up. To deal with this slump in the market, a host of players are now opting for new ways of packaging mainly to increase the products’ shelf life as consumers, faced with budget constraints, are now looking to purchase products which will provide them the value for money. To deal with this increased pressure on prices, marketers are also following discount formats to attract consumers hoping to have a better turnout.


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