The global position of the PET bottle in the retail soft drinks marketplace continues to go from strength to strength, recording 4% CAGR in 2015. PET is outpacing growth of other packaging materials because of its flexibility in form and size, especially in beverages when compared to arch rivals, such as the beverage can, glass bottle and liquid carton. The re-closability afforded by the PET bottle for on-the-go convenience is a pertinent, core strength of the format. When it comes to global prospects for the PET bottle, Asia Pacific is a particular stand-out region that shows an increasing propensity for this pack format.
Current global consumption of PET bottles in the retail marketplace - encompassing the needs of the beverage industry, but also foods, beauty and home care industries - amounted to 471 billion bottles in 2015. Some 42% of this global PET demand came from Asia Pacific, with this regional position to intensify further with 47% of the world’s consumer products in PET bottles set to be sold in Asia by 2019.
PET Spotlight on China
China is the number one, world-leading country for consumption of PET bottles, accounting for 28% of global PET bottle demand alone in 2015 and so a critical country to understand when examining the global prospects for PET. A couple of other big numbers on China to think on…China’s requirement for PET bottles is set to expand by a further 10 billion bottles in 2016, 6 billion of which will come from the bottled water category alone.
The significance of soft drinks to PET’s prospects in China is clear and this is very much shaped by the bottled water industry and players, such as Master Kong and Nongfu Spring and important year-on-year increasing consumption of bottled water by Chinese consumers. Other notable strong performing soft drinks categories this year include ready-to-drink tea and juice drinks with some interesting developments favouring PET from companies, such as Suntory, Uni-President and Wong Lo Kat.
Premiumisation of bottled water as impetus for value-added packaging growth in China
Premiumisation is a trend seen across a number of food and beverage product categories on a wider global scale as consumers seek to treat and indulge in products with high-quality ingredients, also those with added-health benefits. This is a trend we also see developing in the Chinese bottled water market and wider Chinese soft drinks market with even a noted increase in the weight of PET bottles to denote a better quality and premium bottle image.
In the past couple of years Nongfu Spring, the second ranking player in China, switched from HDPE to PET bottles because it is considered a healthier and safer pack type with the clarity of PET to assess water quality also perceived positively amongst consumers. We are also seeing innovation in premium variants of still bottled water, with Nongfu Spring serving to segment the water category with new product lines. These include the 1-litre PET bottle new this year for water that targets mothers and babies and which contains lower levels of sodium and mineralisation making it healthier for infants. The bottle features a clean, decorative on-bottle design marketing the brand’s natural heritage and healthy water source, which is renowned in China.
For on-the-go consumers, Nongfu Spring has also extended its lines of bottled water featuring a push-pull style sports closure in 2015 in a 535ml size and a range of colourful illustrations on the bottles. These efforts are designed to appeal to younger consumers and ultimately add both volume and value growth to the brand’s bottled water packaging sales.
Healthier juice and tea drinks are other winners for PET in China
All-round healthier attitudes surrounding food and drink consumption habits make for a strong outlook for PET in products, such as functional bottled waters and herbal teas, this year. This is because Chinese consumers are showing signs of emulating consumer behaviours in Western markets in seeking to reduce consumption of sugary carbonates and juices. For instance, whilst consumption across the wider juice category shrank in 2014, retail sales of reduced-sugar juice and fortified/functional juices both rose 5%.
Sales of ready-to-drink tea also rose with per capita consumption of 11.4 litres in 2014, resulting from the growing popularity of herbal teas that have a strong health profile in China. Furthermore, herbal teas in China, which have traditionally favoured the red beverage can, are showing some signs of change in favour of the re-closable PET bottle and in adding sizes, such as 500ml and 1.5-litre, to the mix, as was done by Wong Lo Kat.
Uni-President, one of the leading soft drinks players in China, is increasing its portfolio of health orientated juice drinks by adding sea salt for hydration, thereby also making the product suitable as a sports drink, retailing in a 500ml PET bottle. Meanwhile, Suntory has also launched more juice drinks in PET bottles using colour to denote new flavours with Suntory Qin Ning Shui (lemon flavour in a yellow bottle) and Suntory Qin Tao Shui (peach flavour in a pink bottle).
We are also seeing some gender-targeted design initiatives resonating well in brand launches in China in the fast-growing area of plant protein drinks as illustrated by launches in 500ml bottles from Wahaha and Bright, also serving to compete with the popular metal beverage can.
Meanwhile looking at pack sizing innovation in carbonates, Coca-Cola’s 300ml PET bottle, retailing at circa RMB2.5, offers consumers a healthier portion size alternative to the more standard 500ml size and also competes with the 330ml beverage can that retails at circa RMB2.8. We expect to again see more innovation in product variety and pack sizing especially amongst the smaller single-serve sizes to further the opportunities overall for soft drinks packaging and particularly for the PET bottle as the clear-cut soft drinks pack of choice in the Asia Pacific region.