2012 Uk Soft Drinks Report

THE 2012 UK SOF DRINKS HE 012 SOFT 2012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS BSDA 2012 INTRODUCTION A LONG-TERM COMMITMENT With some of its brands and companies in existence for a hundred years or more, the soft drinks industry is a living example of how long-term commitment can lead to long-term success. The 2012 UK Soft Drinks Report is an account of that success over the last 12 months. During that time, the business climate has been dif? cult.

Disposable incomes have been falling and input prices rising; legislative and regulatory pressures have been on the increase; and scrutiny from the media and the general public has been intense. Against that background, the soft drinks industry has delivered growth while BSDA, its trade association, has been active in promoting its reputation. BSDA was founded 25 years ago, after the merger of four predecessor associations, and during that time has supported its member companies by providing information and advocacy for the media, communicating with stakeholders, and offering practical assistance and technical expertise.

Particular thanks are due to Jill Ardagh, Director General of BSDA for 12 years until her retirement in January 2012, who did much to shape BSDA into a highly effective, well regarded organisation. BSDA’s efforts help its members to operate in a fast-moving marketplace where the regulations are often changing and where the media spotlight rapidly moves from one issue to another. Its strong and uni? ed industry voice helps shape the climate in which the industry operates.

Soft drinks companies that are not yet members of BSDA are welladvised to consider joining. REPORT METHODOLOGY AND BACKGROUND

Specialist food and drink consultancy, Zenith International, has been commissioned to produce the 2012 BSDA UK Soft Drinks Report. All data and insights contained in this report were produced using Zenith’s internal market databases and primary research. In compiling its research, Zenith relies on the goodwill and co-operation of companies active in the marketplace. During Zenith’s annual research into the UK soft drinks industry, over 150 soft drinks producers are contacted. This includes larger branded operators, retailer own label specialists, contract packers and a signi? cant number of smaller independent companies.

Based on individual producer volumes for the year, market, sector and segment totals are calculated from the ‘bottom up’. At a sector and segment level, adjustments are then made for any double counting of contract and licensed bottling. Estimates for unauthorised soft drink imports sold through the ‘grey market’ are also included. This is more pronounced in categories such as energy drinks rather than dilute-to-taste drinks, for example. The market ? gures presented therefore encompass all aspects of the market including: take home, impulse and on premise; water cooler volumes for the of? e; home dispensed carbonated soft drinks; and pump dispensed carbonates in the licensed trade.

Following a detailed review of all data ? les received, certain adjustments have been made to historic volumes. To this end, a considerable amount of time and effort is spent contacting industry players and striving to analyse the complexities of the UK soft drinks arena. Zenith would like to express its sincere gratitude to BSDA and the entire UK soft drinks industry for its continued help and support during the research process. 2 BSDA UK Soft Drinks Report THE 2012 UK SOFT DRINKS REPORT

LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS CONTENTS 4 6 8 10 12 14 16 OVERALL SOFT DRINKS CONSUMPTION BOTTLED WATER CARBONATES DILUTABLES FRUIT JUICE AND SMOOTHIES STILL AND JUICE DRINKS SPORTS AND ENERGY DRINKS 18 20 22 23 INVESTING IN THE FUTURE THE SUN STILL SHINES ON SUNSET YELLOW WATER REMAINS A HYDRATING DRINK ABOUT BSDA LONG-TERM COMMITMENT BARR’S IRN-BRU Launched in Scotland in 1901 by Robert Barr and his son Andrew Greig Barr, IRN-BRU still commands a leading place in Scotland where it is seen by many as part of the culture of the Scottish nation. It is “Scotland’s Other National Drink”.

The brand’s success has been built on a continued and sustained investment in both above and below the line marketing activity over its 111 year history. When Barr’s IRON BREW (as it was then spelt) was launched in 1901, sporting heroes of the day such as Donald Dinnie – “All-Round Champion Athlete of the World” – endorsed the product in newspaper advertising as an invigorating and refreshing tonic for aspiring athletes. The unique sense of humour associated with IRN-BRU advertising was ? rst used to great effect in the Ba-Bru and Sandy cartoons which appeared in Scottish newspapers from the mid 1930s to the early 1970s.

Ba-Bru and Sandy became the longest running advertising cartoon in history. It was in the mid 1970s that IRN-BRU’s most famous advertising campaign ‘Made In Scotland From Girders’ was launched. Even though the campaign ended in the early 1990s, consumers still remember and acknowledge it as a great campaign to this day.

3 BSDA UK Soft Drinks Report 2012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS UK soft drinks, low calorie & no added sugar vs regular, 2011 STATISTICS UK soft drinks consumption, 2005 – 2011 Year Million litres % change Litres per person Value, ? illion % change Value per litre, ? Source: Zenith International Low calorie & no added sugar 61% 2005 13565 +0. 4 225. 3 12155 +1. 7 0. 90 2006 13985 +3.

1 231. 0 12525 +3. 0 0. 90 2007 13865 -0. 9 227. 7 12595 +0.

6 0. 91 2008 13725 -1. 0 224. 0 12720 +1. 0 0. 93 2009 14005 +2.

0 227. 2 13120 +3. 1 0. 94 2010 14585 +4. 1 235.

1 13880 +5. 8 0. 95 2011 14685 +0. 7 235. 3 14585 +5. 1 0.

99 Regular 39% Source: Zenith International UK soft drinks sectors 2011 All market ? gures have again been fully reviewed and revised historically, where appropriate.

UK soft drinks sectors annual percentage change, ge 2005 – 2011 12 Bottled water 10 8 6 4 Carbonates 2 0 -2 -4 -6 Still and juice drinks Fruit juice Carbonates 45% Dilutables 22% Bottled water 14% Dilutables Fruit juice 8% Still & juice drinks 10% Source: Zenith International UK soft drinks, packaging, 2011 Total 2005 2006 2007 2008 2009 2010 2011 Source: Zenith International Plastic / PET 65% Can 12% Carton 11% 5 4 BSDA UK Soft Drinks Report Glass / other 7% % INCREASE IN VALUE SINCE LAST YEAR Dispense 5% Source: Zenith International LONG-TERM COMMITMENT COCA-COLA ENTERPRISES S F SOFT DRINKS COMMENTARY C 011 was another tough year for the UK soft drinks industry with real price pressures from higher commodity prices and disappointing summer weather. Consumers maintained their recessionary spending habits and therefore value was the key market driver in 2011. However, April was a strong month with the impact of the Royal Wedding and also unusually warm autumn and winter months provided a slight boost for the industry. Despite the tough economic conditions, the UK soft drinks market registered 0.

7 per cent growth in volume and 5. 1 per cent increase in value to stand at 14,685 million litres and ? 4,585 million respectively in 2011. Bottled water continued to show a recovery with the help of promotional activity and multi-pack formats. Carbonates ? rmly maintained the top share, led by cola, fruit carbonates and energy drinks. Despite some aggressive promotional activities, both dilutables and fruit juice saw a decline in 2011.

Still and juice drinks still showed their resilience, providing an array of product choice to a wide range of consumers. Although consumer con? dence remained low, soft drinks remained a favourite item on the consumers’ shopping lists in 2011.

Consumers buy soft drinks for affordability, fun n and refreshment. However, r, innovations and promotional activities continued to be the e key driver for the market in n 2011. In September 2011, Coca-Cola Enterprises (CCE) celebrated ? fty years at its manufacturing facility in Sidcup, Kent. Opened in 1961, the site employs over 340 people and encompasses manufacturing, direct service distribution and a regional service centre.

The site currently produces in excess of 40 million cases of drinks every year, equating to nearly 300 million litres. CCE has invested signi? antly to improve production capabilities at Sidcup. In 2011, the company installed a new ? 15m canning line, capable of producing approximately 2,000 cans per minute, raising the site’s capacity by an additional 20 million cases of product per year. CCE’s fundamental goal is to increase the competiveness of its Sidcup operation year-on-year, whilst maintaining the highest possible sustainability standards. Since 2007 it has reduced carbon emissions by a total of 7. 4 per cent, whilst increasing volume (litres) by 9 per cent.

Between 2010 and 2011, the site achieved zero waste to land? ll for the ? st time and reduced energy and water use by 30 per cent. The newly installed line will also offer signi? cant environmental bene? ts in water and energy usage, and carbon emissions. Beyond its site operations, CCE also invests in local community initiatives. In July 2011, a new onsite Education Centre was launched at Sidcup – a ? 750,000 investment that will bene? t over 4,000 local students a year. 7 YEARS TO 2011 UK soft drinks consumption, 2005 – 2011 A steady upward trend over the past few years, interrupted by two years of exceptionally bad weather.

000 million litres 15 12 DEFINITION

Soft drinks Carbonated drinks, still and dilutable drinks, fruit juices, smoothies and bottled waters, including sports and energy drinks. 9 6 3 0 2005 2006 2007 2008 2009 2010 2011 Source: Zenith International 5 BSDA UK Soft Drinks Report 2012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS BOTTLED WATER UK bottled water, packaging, 2011 STATISTICS UK soft drinks consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Value, ? million % change Value, per litre, ? Source: Zenith International Source: Zenith International 2005 2140 +3. 9 35. 5 15. 8 1470 +6. 5 0.

69 2006 2240 +4. 37. 0 16. 0 1550 +5. 4 0.

69 2007 2125 -5. 1 34. 9 15. 3 1460 -5. 8 0.

69 2008 2005 -5. 6 32. 7 14. 6 1385 -5. 1 0. 69 2009 2040 +1.

7 33. 1 14. 6 1425 +2. 9 0. 70 2010 2055 +0.

7 33. 1 14. 1 1440 +1. 1 0. 70 2011 2100 +2.

2 33. 6 14. 3 1520 +5. 6 0. 72 Plastic 92% Glass / other 8% UK bottled water categories, 2011 UK bottled water, types, 2011 UK bottled water, origins, 2011 Still bottled 72% Sparkling bottled 14% Still water cooler 13% Natural mineral water 59% Spring water 30% Bottled drinking water 11% UK produced 76% France 17% Others 7% Source: Zenith International Source: Zenith International

Source: Zenith International DEFINITION Bottled water Still, sparkling water and lightly carbonated water; natural mineral water, spring 2. 2 6 BSDA UK Soft Drinks Report water, bottled drinking water; % INCREASE IN VOLUME SINCE LAST YEAR packaged water in sizes of 10 litres and below; water for coolers in sizes of 10.

1 litres and above. LONG-TERM COMMITMENT COCA-COLA B T LED WATER BOTTLED WA E COMMENTARY C Continuing the momentum of the last two years, in 2011 the UK bottled water market continued showed further signs of recovery, growing by 2. 2 per cent in volume, compared to 2010. Sales reached 2,100 million litres.

Similar to 2010, pricing remained under pressure, as both raw material and distribution costs have increased.

An autumn heat wave, mild winter and extensive brand activation helped prop up growth. Consumption of water in smaller retail pack sizes (of 10 litres and below) increased by 3. 0 per cent to 1,819 million litres – as opposed to water coolers in of? ces, which witnessed a 3. 8 per cent decline. Promotional activity was still key to driving sales across take home outlets and on-the-go retail.

Sales continue to be challenged in the on-trade channel as cash-strapped consumers chose to stay in more often.

Despite the ongoing challenges, with per person consumption of bottled water in the UK still far below the West European average e of 115 litres, manufacturers are e looking forward to continuing g growth for bottled water in n the UK. 2011 was a signi? cant year for the biggest selling brand, Coca-Cola, which celebrated its 125th anniversary in May. The iconic brand, now worth ? 614. 5m value sales in Great Britain, celebrated the milestone with a new integrated marketing campaign including a new TV advert, special commemorative packs and a range of instore point of sale.

The campaign and bespoke pack graphics played on the strong heritage of the brand, and celebrated Coca-Cola’s iconic adverts and vintage ‘Real Thing’ theme.

In October Coca-Cola gave consumers the chance to win London 2012 Olympic Games VIP experiences, as well as weekly chances to win a once in a lifetime trip to the Opening or Closing Ceremony. The on-pack promotion was available across all My Coke packs (Coca-Cola, Diet Coke and Coca-Cola Zero) and the supporting marketing campaign included radio and national outdoor advertising in key shopping areas throughout the promotional period.

Coca-Cola has been associated with the Olympic Games since 1928 – longer than any other corporate sponsor of the Olympic movement. In addition, this will be the eighth time Coca-Cola has served as Presenting Partner of the Olympic Torch Relay. 7 YEARS TO 2011 UK bottled water consumption, 2005 – 2011 A sales peak in the hot summer of 2006 was followed by decline during two years of bad weather.

Consumption is now recovering once again. Million litres 2500 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 Source: Zenith International LONG TERM COMMITMENT TO BOTTLED WATER 7 BSDA UK Soft Drinks Report 012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS CARBONATES UK carbonates, low calorie & no added sugar vs regular, 2011 STATISTICS Regular 62% UK carbonates consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Value, ? million % change Value per litre, ? Source: Zenith International 2005 6015 -2. 9 99. 9 44. 3 6795 -1.

9 1. 13 2006 5875 -2. 3 97. 0 42. 0 6755 -0.

6 1. 15 2007 5810 -1. 1 95. 4 41. 9 6850 +1.

4 1. 18 2008 5920 +1. 9 96. 6 43. 1 7120 +3.

9 1. 20 2009 6100 +3. 0 98. 9 43. 6 7515 +5.

5 1. 23 2010 6400 +4. 9 103. 2 43. 9 8000 +6. 5 1.

25 2011 6660 +4. 1 106. 7 45. 3 8490 +6. 1. 28 Low calorie & no added sugar 38% Source: Zenith International UK carbonates ? avours, 2011 LONG TERM COMMITMENT TO CARBONATES Cola 53% Fruit 14% Lemonade 14% Energy 7% Other 12% Source: Zenith International UK carbonates, packaging, 2011 PET 58% Can 27% Dispense 10% Glass 4% % INCREASE IN VOLUME SINCE LAST YEAR Other 1% Source: Zenith International 8 BSDA UK Soft Drinks Report LONG-TERM COMMITMENT BRITVIC C R ONATES CARBONATES COMMENTARY C The largest soft drinks sector, carbonates, saw strong growth in 2011, registering 4.

1 per cent volume growth to reach 6,660 million litres. Carbonates value also sparkled at ? ,490 million, up 6. 1 per cent on 2010. The growth was mainly driven by cola, energy drinks and also fruit ? avoured variants in 2011, and carbonates continued to be the most popular soft drinks sector in 2011. Due to increasing food and drink prices, consumers became less experimental and stuck to traditional favourites. People were going out less and bought soft drinks, especially carbonates, to consume at home.

A wide range of pack choices target different consumption occasions throughout the day. Larger pack sizes for in-home enjoyment were popular amongst consumers looking for greater value for money.

Multipacks, carrying smaller bottle and can formats, added more excitement to the lunchbox and social occasions. Carbonates clearly have the affordable treat qualities that have sustained UK om m soft drinks for so many years. From an refreshment on-the-go, or as an alternative to alcohol, it is clear th that n carbonates have a sound footing in the UK soft drinks industry. Kola drinks were ? rst consumed in the UK in the 1890s, and cola (in its modern spelling) is ? rmly the nation’s favourite soft drink today.

Pepsi continues to bene? t from long-term and on-going investment.

The brand experienced a strong year in 2011, remaining the fastest growing cola brand within take-home, recording 10 per cent value growth and maintaining its place as the number one brand within on-premise, recording 8 per cent value growth. Key contributing activities included the introduction of the ? rst 250ml range of multipack cans across the portfolio, as well as Pepsico and Britvic forging a powerful partnership with the launch of their cross promotion, ‘Fire and Ice’. Other activity included a price-marked pack for 500ml and 600ml PET bottles of Pepsi Max, Pepsi and Diet Pepsi.

The promotion was run to deliver great value to shoppers in tough economic times and to help drive penetration of Pepsi in-store, driving rate of sale for retailers across the crucial summer months. 2011 also saw continued investment in brand marketing programmes to drive consumer demand and engagement including TV, digital, in-store activation and on-pack promotions, such as ‘The World’s Best Mate’ giving consumers the chance to win wild experiences for themselves and their mates every hour for eight weeks from 1 July 2011. 7 YEARS TO 2011 UK carbonates consumption, 2005 – 2011 Tough economic times saw tastes return to the old favourites.

Carbonates have grown during the ? nancial crisis, with no added sugar now up to 38 per cent of the total. Million litres 8000 7000 6000 5000 4000 3000 2000 1000 0 2005 2006 2007 2008 2009 2010 2011 DEFINITION Carbonates Ready to drink including draught dispense; home dispense; regular including sparkling juice; low calorie and zero calorie; cola; lemon including lemonade; lemon-lime; mixers including tonic and bitter drinks; orange; shandy; others including other carbonated fruit ? avours, energy drinks, sparkling ? avoured water, health drinks and herbal drinks.

Source: Zenith International 9 BSDA UK Soft Drinks Report 012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS DILUTABLES UK dilutables, low calorie & no added sugar vs regular, 2011 STATISTICS UK dilutables consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Value, ? million % change Value per litre, ? Source: Zenith International Low sugar & no added sugar 71% 2005 3100 -0. 8 51. 5 22. 9 775 -0. 6 0. 25 2006 3350 +8.

1 55. 3 24. 0 805 +3. 9 0. 24 2007 3350 55.

0 24. 2 805 0. 24 2008 3250 -3. 0 53. 0 23.

7 795 -1. 2 0. 24 2009 3350 +3. 1 54. 3 23. 9 850 +6.

9 0. 25 2010 3500 +4. 5 56. 4 24. 0 910 +7. 1 0.

26 2011 3300 -5. 7 52. 9 22. 5 945 +3. 7 0.

9 Regular 24% High juice 5% Source: Zenith International UK dilutables ? avours, 2011 LONG TERM COMMITMENT TO DILUTABLES Blends 51% Orange 29% Blackcurrant 11% Lemon 5% Lime 2% Others 2% Source: Zenith International UK dilutables, packaging, 2011 Plastic up to 1 litre 60% Plastic over 1 litre 37% 3. 7 10 BSDA UK Soft Drinks Report Others 3% % INCREASE IN VALUE SINCE LAST YEAR Source: Zenith International LONG-TERM COMMITMENT SCHWEPPES D U A DILUTABLES COMMENTARY C Despite aggressive promotional activities, dilute to taste drinks saw a decline in 2011 with consumption volume dropping by 5. 7 per cent to 3,300 million litres.

The retail value of concentrate was up 3. 7 per cent to stand at ? 945 million. By ready-to-drink volumes, dilutables kept the second largest share in the UK soft drinks market.

Classic dilutables are typically mixed with four parts water to one part syrup. Double concentrate, a strong driver of overall consumed volume in recent years, is typically mixed nine parts water to one part syrup. Schweppes was founded in 1783 by a German-born Swiss jeweller and amateur scientist named Jacob Schweppe, who discovered a way of producing carbonated water on a commercial scale. The Schweppes brand arrived in Britain in 1792, with the opening of the ? st factory on Drury Lane, London. Schweppes Mixers are the most popular branded mixer in the UK.

They can be enjoyed on their own or combined with alcohol or fruit juice. The Schweppes portfolio is now worth ? 66m, and includes numerous variants available in different pack formats. In 2011 Schweppes and Diageo GB worked together once again, this time to ensure retailers made the most of the Royal Wedding occasion. As part of the campaign for their long-term, joint initiative to drive spirit and mixer sales, they ran a special Royal Wedding radio execution and a Royal Wedding- peci? c print ad reading, ‘Let’s Celebrate the Royal Wedding (and the extra day off)’. In addition to the joint initiative activity, the special occasion was marked with special limited edition themed packaging across a range of Schweppes SKUs including Lemonade 2ltr, Slim Lemonade 2ltr, Tonic 1ltr, Slim Tonic 1ltr, Soda 1ltr, Canada Dry Ginger Ale 1ltr, Bitter Lemon 1ltr and Slim Bitter Lemon 1ltr. Schweppes was granted the Royal Warrant in 1837, and Schweppes packaging proudly states ‘By Appointment to Her Majesty Queen Elizabeth II’.

The Schweppes Royal Wedding commemorative packs featured the Royal Warrant and an eyecatching celebratory silver ribbon design with copy announcing ‘29th April 2011, Celebrating the Royal Wedding, Prince William of Wales, Miss Catherine Middleton’. Double concentrate, from its retailer own label origins, has added even more affordability to the sector. However, at the same time the overall price level of dilutables went up. Consumers were tightening their belts due to general price increases, which did not help the sector in 2011. ost However, dilutables offer a low cost e and reliable standby in the kitchen.

Low and no added sugar variants e remain dominant in the sector y and provide healthy everyday refreshment for both adults and children. DEFINITION 7 YEARS TO 2011 UK dilutables consumption, 2005 – 2011 Dilutables remain one of the nation’s stand-bys in the kitchen cupboard. Dilutables Squashes, cordials, powders and other concentrates for dilution to taste by consumers, normally adding 4 parts water to 1 part product; high juice (minimum 40% fruit content as sold); regular including squashes and cordials (minimum 25%); low sugar including no added sugar and sugar free;

Million litres 3500 3000 2500 2000 1500 1000 500 0 (dilutables are expressed as ready to drink for ease of comparison where measuring overall soft drinks market ? gures/shares). 2005 2006 2007 2008 2009 2010 2011 Source: Zenith International 11 BSDA UK Soft Drinks Report 2012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS FRUIT JUICE AND SMOOTHIES STATISTICS UK ambient vs chilled fruit juice, 2011 Ambient 45% UK fruit juice consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Value, ? million % change Value per litre, ? Source: Zenith International

Chilled not from concentrate 29% 2005 1120 +7. 7 18. 6 8.

3 1675 +8. 8 1. 50 2006 1210 +8. 0 20. 0 8.

7 1820 +8. 7 1. 50 2007 1230 +1. 7 20. 2 8.

9 1830 +0. 5 1. 49 2008 1190 -3. 3 19. 4 8.

7 1760 -3. 8 1. 48 2009 1145 -3. 8 18. 6 8.

2 1670 -5. 1 1. 46 2010 1180 +3. 1 19. 0 8. 1 1760 +5.

4 1. 49 2011 1160 -1. 7 18. 6 7. 9 1835 +4.

2 1. 58 Chilled from concentrate 20% Chilled smoothies 5% Chilled freshly squeezed 1% Source: Zenith International UK fruit juice ? avours, 2011 UK smoothies consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Source: Zenith International 005 35 +52. 2 0. 6 0. 3 2006 55 +57.

1 0. 9 0. 4 2007 80 +43. 6 1. 3 0. 6 2008 65 -19.

0 1. 0 0. 5 2009 45 -26. 6 0. 8 0. 3 2010 50 +8.

5 0. 8 0. 3 2011 55 +11. 0 0. 9 0.

4 Orange 54% Apple 15% Blends 14% LONG TERM COMMITMENT TO FRUIT JUICE AND SMOOTHIES Pineapple 5% Grapefruit 2% Others 10% Source: Zenith International UK fruit juice, packaging, 2011 Carton 75% 4. 2 12 BSDA UK Soft Drinks Report Plastic 17% % INCREASE IN VALUE SINCE LAST YEAR Glass / other 8% Source: Zenith International LONG-TERM COMMITMENT GERBER JUICE F U FRUIT JUICE A AND SMOOTHIES COMMENTARY

Growth in the value of the fruit juice market of 4. 2 per cent to ? 1,835 million was driven by increases in raw material prices, but volume saw a 1. 7 per cent decline to 1,160 million litres, despite a lot of promotional activity.

Juice from concentrate suffered from large commodity price hikes, and as a result the price gap between chilled and ambient became smaller in 2011. With the help of promotional activities, chilled not-fromconcentrate juices increased volume share by 2 per cent in 2011. Gerber Juice has a long association with Bridgwater in Somerset – its food nd drink production facilities in the town were ? rst established in the late 19th century. It has recently moved to a new purpose-built site, where its futuristic production facilities feature advanced robotics and are the greenest and most advanced in Europe. From single serve cartons with straws to bottles with screw caps, the facility has more than 30 separate production lines, catering for a wide variety of bottle and carton sizes. The site produces 12 million litres of juices and juice drinks per week, equating to almost a billion individual consumer packs per annum.

An on-site laboratory tests and veri? es incoming raw materials from around the world, over 80,000 tonnes of juices, concentrates, pulps and purees per year. Stringent quality control systems ensure that standards are adhered to at every point in the complex production process. Waste is kept to an industry-leading minimum and the calori? c value of any waste is extracted and converted into energy. The ambient and chilled warehouses can store more than 45,000 pallets of juice, aided by a computerised stock control system which regulates everything from rotation to despatch.

In partnership with major hauliers, Gerber delivers over 120 vehicles daily to retailer depots across the UK.

Smoothies adjusted their premium prices to help cash-strapped consumers. The volume registered a strong growth of 11 per cent to reach 55 million litres in 2011. This equates to 0. 9 litres per person consumption. Value er sales also increased by 8 per ng ng cent to ? 152 million. By ? nding an affordable price point in d 2011, smoothies continued to ta provide consumers with a tasty e on-the-go alternative to one or two of their 5-a-day.

7 YEARS TO 2011

UK fruit juice consumption, 2005 – 2011 Fruit juice sales have struggled against an economic background of rising prices and reduced household disposable incomes. Million litres 1500 DEFINITION Fruit juice 100% fruit content equivalent, sometimes referred to as pure juice or 100% juice. Chilled juice comprises four main types: smoothies (based predominately on whole 1200 900 crushed fruit, chilled and with a short shelf life); freshly squeezed juice (not pasteurised, chilled with a shelf life of a few days); not from concentrate juice (squeezed then pasteurised, chilled with a shelf life of a few 00 300 weeks); other chilled from concentrate (from concentrate or part squeezed and part from concentrate). Ambient or long life juice is 2005 2006 2007 2008 2009 2010 2011 0 mainly from concentrate and heat treated; shelf life of up to 18 months. Source: Zenith International 13 BSDA UK Soft Drinks Report 2012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS STILL AND JUICE DRINKS STATISTICS UK still and juice drinks, low calorie & no added sugar vs regular, 2011 Regular 60% UK still and juice drinks consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Value, ? illion % change Value per litre, ? Source: Zenith International 2005 1190 +9.

2 19. 8 8. 8 1440 +8. 7 1. 21 2006 1310 +10. 1 21.

6 9. 4 1595 +10. 8 1. 22 2007 1350 +3. 1 22.

2 9. 7 1650 +3. 4 1. 22 2008 1360 +0. 7 22.

2 9. 9 1660 +0. 6 1. 22 2009 1370 +0. 7 22.

2 9. 8 1660 1. 21 2010 1450 +5. 8 23. 4 9. 9 1770 +6.

6 1. 22 2011 1470 +1. 2 23. 5 10. 0 1795 +1.

5 1. 22 Low calorie & no added sugar 40% Source: Zenith International UK still and juice drink categories, 2011 LONG TERM COMMITMENT TO STILL AND JUICE DRINKS Juice drinks 60% High juice drinks 13% Still ? voured water 13% Sports 11% Other 3% Source: Zenith International UK still and juice drink packaging, 2011 Carton 48% Plastic 25% Glass / other 27% 1. 5 14 BSDA UK Soft Drinks Report % INCREASE IN VALUE SINCE LAST YEAR Source: Zenith International LONG-TERM COMMITMENT SHLOER S L A STILL AND J JUICE DRINKS COMMENTARY C Still and juice drinks registered a modest growth of 1. 2 per cent to reach 1,470 million litres in 2011. The volume growth was mainly driven by sports drinks and ? avoured water, and value also saw an increase of 1. 5 per cent to ? ,795 million in 2011.

This diverse sector appeals to a wide range of consumers from children to grown ups, providing an array of product choice. Still and juice drinks continue to offer a tasty alternative to plain bottled water or carbonates, and remain a popular choice for all health-minded consumers. As an accompaniment to everyday meals, sports, work and leisure, still and juice drinks provide varied refreshment. Along with sports as and ? avoured water, ice tea has er been one of the star performers l within the sector in the last v couple of years.

This diverse n sector has a great potential o to expand its range through v brand extensions, and ?avour innovations in 2012.

Shloer, the sparkling juice drink, was ? rst developed by Professor Jules Shloer in Switzerland in 1935. Over the years, the brand has had different ownership but, since 2005, has been part of the SHS Group. Through the focus of the team in the Group’s Drinks Division, the brand has seen consistently high level performance and investment, including TV, sponsorship, sampling and carefully tailored promotional plans.

The best examples of support for the brand have been product-led innovations, such as the introduction of a Rose variant in 2009 and seasonal limited editions of Summer and Berry Punch in 2011. In recognition of the consumer demand for Shloer in the out of home market, a 275ml bottle has also been introduced to the menus in family dining pubs this year. These additions to the range have all extended Shloer’s product life cycle by adding incremental sales to the brand and the category.

Plans for 2012 include a high pro? e consumer campaign around Shloer Sundays, which not only focus on occasion usage for the brand, but aim to put it on the weekly shopping list – making adult soft drinks a regular purchase, whatever the occasion. 7 YEARS TO 2011 UK still and juice drinks consumption, 2005 – 2011 Consistent growth over the last few years, as consumers respond positively to wider choice on offer. DEFINITION Still and juice drinks High juice drinks (25-99% fruit content); juice drinks (5-25% fruit Million litres 1500 content); other still drinks (0-5%) including iced tea, sports drinks, still ? voured water and non-fruit drinks. 1200 900 600 300 0 2005 2006 2007 2008 2009 2010 2011 Source: Zenith International 15 BSDA UK Soft Drinks Report 2012 LONG-TERM COMMITMENT FOR LONG-TERM SUCCESS SPORTS AND ENERGY DRINKS STATISTICS UK sports and energy drinks, 2011 Sports 25% UK sports and energy drinks consumption, 2005 – 2011 Year Million litres % change Litres per person % of all soft drinks Energy 75% 2005 365 +14. 1 6.

1 2. 7 2006 405 +11. 0 6. 7 2. 9 110 +15.

8 1. 8 0. 8 295 +9. 3 4. 9 2.

1 2007 455 +12. 3 7. 5 3. 3 125 +13. 6 2.

1 0. 9 330 +11. 9 5. 4 2. 4 2008 05 +11. 0 8.

2 3. 7 135 +8. 0 2. 2 1. 0 370 +12. 1 6.

0 2. 7 2009 530 +5. 0 8. 6 3. 8 140 +3.

7 2. 3 1. 0 390 +5. 4 6. 3 2. 8 2010 600 +13.

2 9. 7 4. 1 160 +14. 3 2. 6 1. 1 440 +12.

8 7. 1 3. 0 2011 660 +10. 0 10. 6 4. 5 165 +4.

5 2. 7 1. 1 495 +12. 5 7. 9 3.

4 Source: Zenith International Sports drinks, million litres 95 % change +11. 8 Litres per person 1. 6 % of all soft drinks 0. 7 Energy drinks, million litres270 % change +14. 9 Litres per person 4. 5 % of all soft drinks 2.

0 Source: Zenith International UK sports drink types, 2011 Isotonic 94% Hypotonic 5% Hypertonic