Opinion from global food and drink experts, Zenith Global


April 1st, 2008 | Posted by Richard Hall in Soft drinks - (1 Comments)

Someone at Coca-Cola has kindly calculated that a can of Coke contains an average 18.9 million bubbles.

Well, maybe you didn’t really need to know this, but I thought you might at least be intrigued.

I had the privilege of chairing the annual Global Dairy Congress in Athens last week. 191 delegates, 37 countries, 24 presentations – a 48 hour world industry community. What did we learn ? What did it achieve ?

Lots, actually. Information, insights, contacts, deals of course. But also a focus on some unresolved priorities for further action. At least, this was my take on it:

  1. Consumer education – Dairy has massive benefits to communicate, but needs to co-ordinate its resources and messages more effectively – a task that is beginning to be addressed by the Global Dairy Platform.
  2. Nutrition labelling – There was no appetite for traffic lights and no enthusiasm for guideline daily amounts, but nor has a viable alternative been found.
  3. Added value – There was a spring in the industry’s step as a result of improved sales, and greater confidence as a result of innovation success, but also an awareness that many traditions remain to be updated.
  4. Natural vs functional – This is a real dilemma for product developers, with so many natural attributes in the market mainstream and yet an expectation of gradual moves towards more sophistication and extra functionality on the fringes.
  5. Face the fats – 0% fat was seen by some as the middle way to achieve all of the taste with none of the drawbacks.
  6. Environment imperative – Numerous initiatives were in evidence from pack lightweighting to renewable energy, but dairy has a big footprint and will need support to improve recycling.
  7. School milk – The chance of a UN School Milk Centre was raised and greeted. This merits confirmation with alacrity. To have a UN backed World School Milk Day is a material asset and a dedicated UN unit would be a genuine investment.

Nielsen’s ranking of 2007 winners and losers offers many insights.

  • Soft drinks is the largest category in UK grocery.
  • Cold drinks account for 17 of the top 100 brands and 5 of the top 15, led as ever by Coke.
  • 7 are carbonates including 2 energy drinks; 6 are fruit juices and drinks; 2 are waters; and 2 are dairy based.
  • Red Bull, Cravendale milk, Oasis and Capri-Sun sales all advanced by over 20% last year.
  • Innocent was the fastest growing, up 46% to £141 million, rising to no 33. It credits success to four key macro trends, well worth noting – health/wellbeing, indulgent/premium, convenience and ethical.

Seasonality affects the sales of most beverages, but my latest concern over climate change has been an exceptionally early start to the silly season. This normally comes in the late summer, when so many people are away that journalists make news out of almost anything.


Last week, no less than the Cabinet Secretary wrote to all UK government departments asking them to adopt tap water only policies, explaining “I have made this issue one of my key priorities.” This was front page news for the Evening Standard, leaving no room for health or education, defence or crime, not even football.

This is because Whitehall reportedly uses 250,000 bottles of water a year. Which amounts to 0.02% of a market that is responsible for at most 0.1% of UK carbon emissions. Hardly a drop in the ocean.


In mid February, the Environment Minister described bottled water as daft because tap water is so good. Yet Private Eye magazine found that his own department has installed special water filters at a cost of over £2,000 a tap.

I’m surprised the Minister didn’t add “let them eat cake”.

Silliest ?

This week beverages will have been higher than usual on the Chancellor’s agenda, when considering his first Budget statement. He has been urged to raise taxes on alcopops and lower taxes on fruit juice. These are not silly ideas, because the government can easily do more to encourage better social behaviour and better health.

Important elements of public health policy are for us to eat 5 a day of fruit or vegetables and to drink 8 glasses a day of water. There is no VAT on fruit or vegetables or tap water. But we have to pay 17.5% tax for fruit juice and bottled water.

The silliest thing would be not to promote better hydration and health by ending these anomalies, because the change would cost so little and save so much.

Joe Beeston OBE sadly passed away yesterday, the first person to have been honoured by the Queen for services to the UK bottled water industry.

Joe’s business contribution was remarkable. He kept the faith with a single minded approach to Highland Spring, building it into a greatly respected brand leader through massive market change. At the same time, he assembled a management team and workforce that became almost an extended family.

To the wider industry, and during his previous career in the world of spirits, he was always a chirpy friend full of great stories, even in his losing battle with cancer. Some of the funniest were about the 2005 G8 Summit held nearby at Gleneagles. When the security services needed to use Highland Spring land for logistics support, it didn’t take them long to realise how important it was to him that the Summit should use Highland Spring water in order to be assured of his full co-operation.

Joe, we shall miss you as a mentor and friend.

Some UK politicians have accused bottled water of a massive environmental impact, condemning huge amounts that travel thousands of miles.

Doh ! For a start, I don’t think anyone is suggesting that bottled water contributes more than 0.1% of total UK greenhouse gas emissions.

The Times newspaper has highlighted imports from the United States and Fiji. The Government’s own trade figures show these were in fact as little as 0.03% and 0.04% of the UK bottled water market in 2006.

Fiji Water in The Grocer at the weekend said its water only comes by ship and a full year’s UK imports created less carbon than a return flight from London to New York. Yet somehow BBC Panorama couldn’t avoid its flight to Fiji to investigate.

If Fiji water is wrong, what about the £2 billion of wine imports from Australasia, South America and South Africa. And why not ban beer from Mexico or India, vodka from Russia, cut flowers from Kenya or computers from Japan ?

It’s not wrong. It’s not right. It’s a choice.

Certainly, we’ll all have to wise up environmentally about some of the choices we make and it’s perfectly fair to have a debate about them. But let the debate be informed and proportionate … starting with once respected institutions like Parliament and the BBC.

4 x 4s, plastic bags, bottled water. Tonnes of oil, loads of waste, bottled water evil, drink from the tap.

This sounds great. Save money, salvage conscience. But there is a real danger that common sense could be turned upside down.

Water is as healthy as can be. It has almost no downsides, unlike any other product.

Stop bottled water in its tracks and people will become

  • less well hydrated and less healthy, because 50% of bottled water is drunk on the move and they will drink less liquid
  • fatter when obesity is already a major social concern, because most of bottled water’s recent growth has been as a replacement of calorie containing drinks.

Ah, but switching from bottle to tap will save the environment. Well, no actually. Bottled water uses less water and packaging than any other ready to drink beverage. Only a tiny proportion comes from outside Europe.

Two action points would be good though.

  • Government should encourage local authorities to recycle more plastic. Levels could be doubled if all areas followed best practice.
  • Public water supply companies could do more to reduce leakage. At present leakage is over 1,000 times the level of bottled water consumption.

What about the 1 billion plus people around the world without proper access to water ? Well, bottled water companies are doing proportionately more than any other grocery sector.

But isn’t all water the same ? Shouldn’t we just go back to the tap ? I’m a fan of tap water. I drink it a lot. But in the office we have water coolers for chilled water and jug filters for hot drinks. Sometimes I prefer a water from a protected known source where the water has had no chemical treatment. In other instances, it’s a matter of convenience or taste. Should I be made to feel guilty for these entirely reasonable and informed healthy choices ? I believe bottled water is much more on the side of the angels than a sinner.

So how should one respond to a Minister who says bottled water is morally unacceptable ? First, he should retract it because he is wrong. Second, he should concentrate more on real answers to public health, climate change and world poverty. Bottled water’s carbon footprint is just 0.1% of the UK total. What about the other 99.9% ? If that’s not tackled, then bottled water will be needed for more flood relief emergencies, not less.

As the biggest market for most beverages worldwide, US results are always worth watching. Although the Beverage Digest supermarket numbers represent well under 50% of total volume, they offer very strong indications.

  • Energy drinks were up most at 24% – Monster was just 1 share point behind Red Bull.
  • Teas rose 20% – with Lipton pulling away from the competition.
  • Bottled water gained 10% – Private label has jumped to a 22% share and Glaceau has overtaken Dasani in value.
  • Sports drinks increased just 3% – much weaker than in recent years, with Gatorade dipping below 80%.
  • Carbonates fell 8% – worse than the 5% decline of 2006. Coke was down 9%, Pepsi 8%, Cadbury 6% and private label 9%.

What should one make of this ? Well, these numbers certainly bear out the trends towards healthier and lighter beverages, with contrasting attractions in more natural or more functional propositions.

Carbonates undoubtedly have the most work to do, but it should be noted that both Coke and Pepsi did increase their prices by 6% in 2007.

Overall, it reinforces the scope for soft drinks to continue growing if they continue adapting and innovating.