Soft drinks stabilises as economy remains flat
While Irish consumers continued to struggle with their daily finances, there was some respite in 2013 and the slightly tentative signs of positivity were reflected in the stabilisation of soft drinks. This was especially true for off-trade, which continued to see better performance than on-trade, both in volume and value sales terms. Many consumers continued to seek value and found it possible to do so through bulk buying and stocking up when products were available on special offer.
Private label continues to convince customers of quality
Consumers continued to shop in private label outlets, now that the stigma that was once attached to these outlets has been removed. Irish consumers came to realise that the quality of private label products is often equal to that of their branded counterparts. However, there were some strong brands that Irish consumers remained highly loyal to. Products with strong branding, such as Coca-Cola and Club Orange, continued to perform strongly for once off purchases such as in convenience stores. However, many private label offerings in supermarkets and discounters encourage consumers to buy cheaper similar alternatives in larger quantities. On the whole, mid-range brands suffered and to an even greater degree within some categories, such as bottled water and juice.
Mergers and acquisitions at global level increase competition domestically
A lot of company activity was seen within soft drinks, as some manufacturers tried to gain a stronger foothold and others looked to concentrate on their core businesses. The latter was true for GlaxoSmithKline Plc (GSK), which just confirmed the sale of the Lucozade and Ribena brands to Suntory Holdings, in a bid to concentrate on its core consumer healthcare business. New investors will bring about change for soft drinks in Ireland, as new brand owners are likely to invest heavily in growing these brands, in a bid to increase their overall share of soft drink sales.
Supermarkets remains the leading distribution channel for soft drinks but loses share
In 2013, the retail environment remained relatively unchanged from the previous year. Supermarkets continued to dominate, in accounting for an off-trade volume sales share in excess of 50%. However, the channel saw a loss of off-trade volume sales share over the review period, mainly to discounters, convenience stores and internet retailers. A significant proportion of soft drinks were bought on impulse through convenience stores and the better than usual summer in Ireland in 2013 resulted in an increase in impulse purchases. A growing number of consumers shopped in discounters, as they sought even greater value-for-money, allied to the fact that these outlets started to offer a greater number of branded products at competitive prices.
Better summer improves sales but overall outlook remains flat
In 2013, the summer in Ireland was the best the country had seen since 2006. The better than usual weather encouraged consumers to spend more on soft drinks, not only because they needed to cool down but also because it made them feel more positive, as it allowed them to loosen the purse strings a bit more than usual. However, warm weather and Ireland do not always go hand-in-hand. The future outlook is that volume sales are expected to remain relatively flat, as both off-trade and on-trade volume sales continues to struggle. A potential increase in VAT from 9% to 12.5% for services, coupled with potentially bad summers in the coming years, could have a negative impact on the performance of soft drinks in Ireland.
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Discover the latest market trends and uncover sources of future market growth for the Soft Drinks industry in Ireland with research from Euromonitor's team of in-country analysts.
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The Soft Drinks in Ireland market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Soft Drinks in Ireland?
- What are the major brands in Ireland?
- What potential exists for multinational vs. local soft drinks companies looking to increase market share?
- How have changing social attitudes affected soft drink sales?
- How have sustainability issues; such as environmentally-friendly packaging, legislation on recyclability, or the amount of plastic in bottles, affected the soft drink industry?
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This industry report originates from Passport, our Soft Drinks market research database.