Beverage

PERFORMANCE AND PROSPECTS FOR BEVERAGE PACKAGING MATERIALS
JUNE 2011
INTRODUCTION
GLOBAL DRINKS PACKAGING OVERVIEW

FOCUS ON PET BOTTLES FOCUS ON GLASS BOTTLES
FOCUS ON METAL BEVERAGE CANS

FOCUS ON LIQUID CARTONS PROSPECTS
INTRODUCTION
Scope
This briefing on the global beverage packaging market examines off-trade performance and prospects for packaging across the alcoholic and soft drinks industries. BEVERAGE PACKAGING 2010 938 billion units
Disclaimer Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors. Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies opinions, reader discretion is advised. Learn More To find out more about Euromonitor International's complete range of business intelligence on industries, countries and consumers please visit www.euromonitor.com or contact your local Euromonitor International office: London +44 (0)20 7251 8024 Chicago +1 312 922 1115 Singapore +65 6429 0590 Shanghai +86 21 6372 6288 Vilnius +370 5 243 1577 Dubai +971 4 372 4363 Cape Town +27 21 552 0037 Santiago +56 2 915 7200 Sydney +61 2 9275 8869 Tokyo +81 3 5403 4790
PET Bottles 331.6 billion units
Glass Bottles 249.5 billion units
Metal Beverage Cans 240.6 billion units
Liquid Cartons 55.1 billion units
Flexible Plastic 10.9 billion units
Thin Wall Plastic Containers 10.2 billion units
Flexible aluminium/ plastic 8.5 billion units
Stand-up Pouches 6.4 billion units
HDPE Bottles 5.9 billion units
Paperbased Container 5.8 billion units
Other Metal 5.7 billion units
Other Packaging 8 billion units
Euromonitor International
PACKAGING: BEVERAGES
PASSPORT 3
INTRODUCTION
Key findings
2011, a year of growth: resilient emerging markets key to packaging gains PET bottles record most lucrative gains, extending into alcoholic drinks Outside emerging markets, fortunes for glass muted; look to premium for growth Global economic recovery makes for a positive outlook for all beverage packaging materials for 2011 and through to 2014. Emerging markets in Asia-Pacific and Latin America widely exhibit resilience and growth. China and India will lead volume gains: these two countries alone are set to account for 18% of global gains to 2014. PET remains the star beverage pack performer, with global off-trade demand up by 6% in 2010, enjoying buoyant sales in soft drinks through health-oriented uptake of juices and RTD tea. A much smaller player in the alcoholic drinks arena, the PET bottle is making inroads in the glass stronghold of wine and spirits, with launches offering value-oriented and safe on-the-go propositions. The best volume performance and prospects for glass in beverages will be derived from consumption growth in emerging markets, headed by Asia and Latin America. In saturated European and North American markets, growing consumer interest in craft, low ABV and premium beer presents openings for added-value glass.
Eastern Europe shows After a difficult 2010, Eastern Europe is showing a return to growth. Russia and a return to growth Ukraine, hardest hit by the economic crisis, show more positive macroeconomic despite constraints performance and potential in 2011. High excise duties placed on alcohol impinges on absolute packaging growth potential, but rising incomes and growing interest in premium beverages augurs well for packaging volume growth.
Carbonates may be out of favour but beer is on the ascendancy for beverage can sales
A shift to healthier soft drinks has a detrimental impact on beverage can sales in carbonates. Beer, however, has a far more positive outlook for the can, with China to lead global growth. Development of the countrys retail infrastructure ,driven by rising wealth, sees beverage cans displace glass as a modern pack solution.
PASSPORT 4
INTRODUCTION


Beverages is second only to foods in FMCG packaging demand

Of global packaging demand, beverage packaging sales, comprising soft, alcoholic and hot drinks, importantly account for 24% of retail unit volumes in 2010, second only to the foods industry in global, retail packaging requirements. Soft and alcoholic drinks are the principal beverage industry users of packaging with combined retail packaging demand amounting to 938 billion units in 2010 and recorded a respectable 4% growth in sales in 2010. The PET bottle continues to consolidate on its position as favoured packaging format, with 37% of all soft and alcoholic drinks sold in a PET bottle in 2010. Global Retail Packaging by Industry 2005, 2010, 2014
2014
2010
2005
500
1,000
1,500
2,000
2,500 Billion units
3,000
3,500
4,000
4,500
5,000
Food packaging Alcoholic drinks packaging Home care packaging
Tobacco packaging Beauty and personal care packaging Hot drinks packaging
Soft drinks packaging Tissue and hygiene packaging Dog and cat food packaging
PASSPORT 6
Absolute importance of emerging markets to 2010 performance

% Unit Volume Growth for Soft and Alcoholic Drinks 2009-2010
Key: Decline Low growth Medium growth High growth Not illustrated
The emerging regions of Asia-Pacific, Middle East and Africa, and Latin America have been the most lucrative for packagers following the economic downturn. China, India, Brazil and Indonesia were the top four performers of 2010 in unit volume packaging gains. Of the developed world economies, through its sheer size, the USs growth of just 0.7% in 2010 equates to 1.3 billion additional packs sold.
Euromonitor International PACKAGING: BEVERAGES PASSPORT 7
Economic recovery proves fruitful for beverage packagers

Off-trade beverage packaging unit volume sales globally rose by 3.7% in 2010, bringing drinks packaging sales to 938 billion units. Growing consumer confidence, aligned with a recovering global economic environment, augurs well for continuing growth in beverage packaging in the period to 2014. Soft drinks, through still bottled water and still RTD tea, offer the best packaging prospects, largely though the pack leader, the PET bottle. Gains for PET in still bottled water are led by Asia-Pacific, notably China and India, and the US. The dynamics of Asia-Pacific are further shown in still RTD tea, with 93% of 2010 global pack gains in RTD tea coming from this region. The beverage cans position is meanwhile being squeezed, recording declines in RTD coffee, stout and juice, and also impacted by a slowdown in consumption of carbonates, its lead application. Despite these constraints, global beverage can sales across soft and alcoholic drinks recorded a 2% rise in sales in 2010, with even more positive development expected over 2010-2014, which will be underpinned by buoyant domestic lager sales in emerging markets. China, Brazil and India are forecast to lead beverage can gains. Glass, which accounts for 27% of global drinks packaging sales, is under pressure. Sales are mostly concentrated in beer, spirits, wine and carbonates, but performance is weak, with only 1% growth in 2010
Billion units 1,200
Global Beverage Packaging by Format 2005-2014
1,000
800
600
400
200
0 2005 2010 2014
PET bottles Glass bottles Metal beverage can Liquid cartons Flexible packaging Thin wall plastic containers Other packaging formats
PASSPORT 8
PET makes most headway at expense of glass and beverage cans

The PET bottle remains the outright winning pack type across soft and alcoholic beverages, capturing market share from glass in beer and bottled water, and also making inroads into traditional alcoholic beverage categories where glass holds a near monopoly, most notably in wine and spirits. The PET bottle is further challenging the beverage can in soft drinks, where it is showing significant volume gains over the can in carbonates. In juices and RTD tea, the PET bottle widely outperforms both glass bottles and beverage cans. Global Alcoholic Drinks by Pack Format 2005/2010/2014
100% 90% 80% 70% 60% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 PET bottles Flexible plastic 2010 2014 Metal beverage can Thin wall plastic containers 2005 Glass bottles Other packaging formats 2010 Liquid cartons 2014
Global Soft Drinks by Pack Format 2005/2010/2014
50%
40% 30% 20% 10% 0%
PASSPORT 9
A round-up of beverage packaging performance by format in 2010

The shift to healthier beverages is generating strong pack volume growth in key soft drink categories of still bottled water and still RTD tea, making these especially lucrative end-uses for both PET and glass bottles. For beverage cans, domestic lager and carbonates drove 2010 volumes, with expanding consumption in Asia-Pacific offsetting the declines recorded in the US and Russia. Energy drinks additionally provided robust gains for the beverage can in 2010, driven by rising per capita consumption in developing markets. Performance of Core Pack Types in 2010 2010 off-trade Unit growth 2010 % growth unit volume 2009-2010 Winning categories 2009-2010 (mn units) (mn units) Still bottled water, PET bottles 331,565.5 5.9 18,517.8 still RTD tea, juice drinks carbonates, sports drinks Whiskey, carbonates, wine Glass bottles 249,481.7 0.8 1,908.4 other spirits, RTD tea Lager, carbonates, energy Beverage cans 240,618.4 2.4 5,706.0 drinks, RTD tea Brick liquid Still RTD tea, juice drinks, 45,474.1 6.8 2,880.8 carton nectars Flexible plastic 10,890.7 7.5 756.9 Powder concentrates Thin wall plastic Still bottled water, RTD 10,163.8 7.0 666.4 containers coffee, still RTD tea
Euromonitor International PACKAGING: BEVERAGES
2010 Losing categories Carbonated RTD tea lager, dark beer, liquid concentrates Lager, white spirits, energy drinks RTD coffee,100% juice Wine Wine Fruit flavoured drinks
PASSPORT 10
88% of all beverages are sold in a PET bottle, glass bottle or can
Core beverage pack formats of PET bottles, glass bottles and beverage cans saw steady growth over 2005-2010. Of all packaging formats, the glass bottle is under most pressure with a weak 2010, largely due to declining demand for glass in China and Russias domestic lager market. In China, reduced prospects for glass come as the beverage can strengthens its foothold, whilst for Russia, consumers continue to suffer the effects of government regulation on alcoholic drinks, where the imposition of exorbitant taxes on beer has reduced offtrade sales of both beverage cans and glass bottles. The PET bottle is predicted to consolidate its leading position, with its share of beverage sales rising from 35% in 2010 to 37% by 2014. The brick liquid carton is also forecast good sales, with health-oriented juice and RTD tea purchases the key avenues of growth. Flexible plastic accounts for just 1% of drinks packaging sales, based largely on powder concentrates, but is recording a strong performance, attributable to rising sales in Mexico and Indonesia. Price sensitivity amongst Mexicans feeling the effects of the downturn has contributed to higher sale of concentrates in flexibles.
35 30 25 20 15 10 5 0 -2 0 2 4 6 8 10 12 % CAGR 2005-2010 PET bottles Metal beverage can Flexible plastic Flexible aluminium/plastic Glass bottles Brick liquid cartons Thin wall plastic containers
Global Beverage Packaging Performance and Prospects
Note: Bubble size shows 2010 retail pack unit volumes

PASSPORT 11
% CAGR 2010-2014
Dynamism in liquid cartons comes through growth in tea and juices

Leading Growth Categories for Brick Liquid Cartons in Beverages 2009-2010
1,885 mn units 400 30
Alongside the PET bottle, the brick liquid carton is forecast to be one of the star performers over 2010-14, with global sales rising by a 7% CAGR. Chinas growing economic prowess and purchasing power is central to the cartons prospects: this country alone is forecast to generate 83% of global incremental sales for brick liquid cartons over 2010-2014. RTD tea and juices are the most prominent enduses driving liquid carton growth, both in China and in the wider global marketplace. Other emerging markets in Asia and Latin America feature highly, with India showing rapid growth as the brick carton remains an important barrier pack type for juices despite the progress made by PET. Growth in the more mature Japanese market stems from the range of new flavour variants being launched and rising sales of RTD black tea.
PASSPORT 12
350 Absolute growth 2009-2010 (million units) 25 300 20 250 % growth 2009-2010
200
15
150
10 100 5 50
Absolute growth 2009-2010 (million units)
% growth 2009-2010
INTRODUCTION


FOCUS ON PET BOTTLES
RTD tea and juices become increasingly important to PET sales

Global PET Bottles by Category 2005/2010
100% 90% 80% 70% 60% 50% 40% 30% 20%
Global off-trade consumption of PET bottles reached 332 billion units in 2010, a 6% increase on 2009. This growth reflects the pack types versatility, with gains made across soft and alcoholic beverages, from shot-style energy drinks, more conventional single-serve beverages through to multi-serve, value for money family sizes. Bottled water alone accounts for 46% of global PET unit volume sales in the off-trade, with fast-developing Asia-Pacific providing the most lucrative volume gains, as maturity in levels of bottled water consumption in developed markets, particularly in Europe, serves to slow growth for PET in bottled water. Juice drinks and RTD tea are, meanwhile, becoming increasingly important to PET sales, with growth coming both from pure per capita gains and gains made at the expense of the beverage can. The share of carbonates in global PET bottle sales is falling, with 28% of off-trade PET consumption in 2010, down from 32% in 2005. This is not linked to PET losing share as a pack type in carbonates but is instead a reflection of consumers changing beverage consumption habits, favouring bottled water, juices and RTD tea.
10%
0% 2005 Bottled water RTD tea Sports drinks Spirits 2010 Carbonates Fruit/vegetable juice Beer Other beverages
In alcoholic drinks, beer and spirits offer further promise for PET. For beer, Asia-Pacific and Eastern Europe consumer demand is key to growth, whilst for spirits, North America, through white spirits, and Asia-Pacific, through local spirits and whiskey, are the key regions.
PASSPORT 14
Healthy soft drink choices and low value spirits drive PET sales
Despite a slowing in annual growth, bottled water, the leading end-use for PET bottles, will continue to lead off-trade volume sales through to 2014. Global PET bottle sales for bottled water are forecast to reach 175.6 billion units by 2014. More dynamic growth rates are being recorded in juices and RTD tea, due to rising levels of consumption and as PET erodes the shares of beverage cans and glass. Spirits account for less than 1% of global PET bottle sales in beverages, but represent a strong growth category. The US is the leader in sales of spirits in PET, accounting for 52% of global spirits sales in PET in 2010, and offers good growth prospects. Lower breakage rates and reduced transportation costs are factors supporting US development, as is the rise in sales of economy spirits in times of austerity. PET has been used for standard 75cl sizes, as well as 1- and 1.5-litre bottles, with launches from White Rock Distilleries and MS Walker Inc in 2010. The majority of mid-priced and premium spirits remain bottled in glass.
Global PET Bottles: Performance in Core Drinks Categories

14
12
% CAGR 2010-2014
10
Healthy beverage choices and economically priced spirits do well
4
Even maturing categories provide growth 0 2 4 6 8 10 12 14 16 18
% CAGR 2005-2010
Bottled water Fruit/vegetable juice Spirits Carbonates Sports drinks RTD tea Beer
PASSPORT 15
PET hit by weak growth from core bottled water nations in Europe
Of the leading per capita consumers of bottled water, Mexico is ranked first, with 2010 per capita consumption of 143 litres and with a rise in per capita consumption of 11 litres in that year. In packaging terms, Mexicos strong rise in demand for bottled water translated into an 11% rise in PET bottle sales in 2010. Poor tap water quality, most markedly in remote rural areas, rising health consciousness amongst consumers amidst rising levels of obesity, a shift away from carbonates, and economic recovery have all combined to effect a strong rise in bottled water consumption across income groups.
Top 10 Per Capita Countries for Still Bottled Water 2010 and Performance
Country 2010, % growth litres per 2009-2010 capita Absolute growth (litres) 2009-2010
PET is the preferred pack type for still bottled water in Mexico, accounting for 76% of all unit sales, with on-the-go sizes like the 500ml pack showing rapid growth. Many of the developed nations of Western Europe are characterised by saturated demand for bottled water, with little opportunity for a rise in per capita consumption across Spain, France or Italy. Improvements made to Spains public water supply and the countrys economic crisis have particularly hit spending on non-essentials like bottled water in PET bottles. In France, a muted 1% rise in 2010 sales for PET bottles for bottled water was a result of the continuing consumer trend favouring tap and filtered water, but this 1% growth was still an improvement on the previous years decline, helped by promotional offers, increased advertising spend by national brands and the success of on-the-go 500ml formats.
Mexico Spain France Italy Belgium Turkey US Portugal Israel Indonesia
143.4 115.2 101.0 99.1 74.1 71.5 67.8 64.5 61.1 58.1
8.5 -0.3 0.6 0.0 -0.4 8.7 1.9 5.0 1.6 5.3
11.3 -0.3 0.6 0.0 -0.3 5.8 1.3 3.1 1.0 2.9
PASSPORT 16
Developing countries provide best per capita growth opportunities

Mexico the world leader in per capita consumption of still bottled water is predicted a 7% CAGR for PET bottles in bottled water between 2010 and 2014. In actual unit volume gains for PET bottles, Mexico is, however, only forecast to take ninth position, owing to the importance of large bottle sizes, notably the 20-litre pack, which accounted for 83% of off-trade product volume litreage sales in 2010, as opposed to the 1.5-litre and 2-litre sizes that are the most common household pack sizes in many countries. Youthful demographics in countries like Turkey, Saudi Arabia, Indonesia will expand bottled water sales in PET. In absolute PET bottle volume gains, it is the populous Asia-Pacific region that offers most promise.
Top 10 Per Capita Growth Countries for Still Bottled Water 2010 and Prospects to 2014 2010, % growth Absolute growth Country litres per capita 2010/2014 (litres) 2010/2014 Mexico 143.4 8.5 31.7 Turkey 71.5 8.7 20.6 Saudi Arabia 50.7 7.8 14.1 Poland 34.1 10.8 14.0 South Korea 38.3 9.2 11.5 Morocco 14.6 12.6 9.1 Hungary 33.9 4.3 7.6 Indonesia 58.1 5.3 7.5 Brazil 23.5 8.6 6.8 Portugal 64.5 5.0 6.1
Regional Growth for PET in Still Bottled Water
4 Asia-Pacific North America Australasia
6 8 10 12 14 16 2010-2014 Absolute volume growth (billion units) Latin America Middle East and Africa
18
20
22
Western Europe Eastern Europe
PASSPORT 17
China and India to lead PET bottle volume gains in water

China is key to forecast PET bottle volume growth in bottled water, with national off-trade demand predicted to see growth of 4.4 billion units over 2010 to 2014, equating to 18% of all global gains for PET in bottled water. A number of convenient on-the-go sizes have been launched, like Master Kongs 330ml size. In addition, in response to growing environmental awareness in China, Coca-Cola launched its Ice Dew bottled water in a single-serve, lightweight PET bottle that can be twisted when empty to save space when recycling. Strong promotional pricing from the brand leaders encouraged multiple purchases by consumers. Lower tier cities offer good potential, as previously rapid consumption growth starts to slow in first-tier and some of the more developed second-tier cities. An equally strong outlook is forecast for India, as the need for safe drinking water remains pertinent, with demand highest in urban areas. Value-added lines offer potential for development, with natural mineral water from Bisleri (Parle Bisleri) and Himalayan (Tata Global Beverages) expanding their positions. Leading Volume Growth Countries for PET in Bottled Water 2010/2014
China India Germany Indonesia Mexico US Russia Italy Philippines Brazil 0 5 10 15 20 Billion units
China
Ice Dew Still Bottled Water PET bottle
2010 2010/2014 absolute
Coca-Cola April 2010

40
25
30
35
PASSPORT 18
Juices further provide PET with ample regional opportunities

Global PET demand in juices rose by a robust 10% in 2010, after a poor recession-induced performance in 2009. A solid outlook is forecast.
% CAGR unit volume growth
Regional Performance and Prospects for PET Bottles in Fruit/Vegetable Juice

18 16 14 12 10 8
Asia-Pacific and Eastern Europe present the most dynamic outlook, with China, Russia and India offering the best opportunities. These three countries are expected to account for 89% of global PET bottle gains in juices over 2010-2014.
6 Middle East and Africa (MEA) represents just 1% of global PET bottle sales in juices, but offers 4 strong potential, with South Africa to lead the way. 2 South Africas emergence from recession, 0 combined with rising consumer demand for healthy -2 food and drinks, will see single-serve juices perform well, especially the 250ml portion size. Continued momentum along health and wellness % CAGR 2005-2010 % CAGR 2010-2014 lines will underpin growth. The developed regions of W Europe, North America and Australasia have more subdued prospects, with the best opportunities to be found in Western Europe, through 100% juice and nectars, with Spain and France particularly strong. In Spain, brand owners are increasingly using PET as a means to compete with the encroaching strength of private label, the share of which has risen from 41% of off-trade juice volume sales in 2005 to 48% in 2010. The PET bottle packaging of Coca-Colas health-positioned Limon & Nada and Naranja & Nada, with an adult profile, serves to differentiate them from the more common liquid carton.
PASSPORT 19
PET, Chinas preferred pack for juice drinks, holds buoyant outlook
In China, juice drinks represent the primary juice application for PET, accounting for 92% of all Chinese fruit/vegetable juice sales, and offer the greatest potential for PET, with a forecast CAGR of 6% over 2010-2014. The global consumer wellness trend is a driver of Chinas performance, aided by rising consumer incomes, enabling more regular purchases of branded, packaged juices. Further, the governments strategy to develop agriculture, with the promotion of fruit planting alongside the Chinese Beverage Associations Loving health, drinking juice campaign undertaken with leading juice manufacturers like China Huiyuan Juice Group and Uni-President Enterprises, serves to encourage juice intake. Despite the wide appreciation of liquid cartons in the country, PET continues to gain share in juice drinks, through new launches. The entry of wide-neck bottles is apparent in single-serve drinks and adds to the positive outlook for PET. Nongfu Springs first juice drink, Shui Rong C100, was launched in a wide-neck PET bottle.
China Pack Breakdown for Juice Drinks in 2010

PET bottles Liquid cartons Metal beverage can Glass bottles Stand-up pouches HDPE bottles
China vs World in PET Bottle Growth for Juice Drinks 2009-2014

18 16 14 % growth 12 10 8 China World
6
4 2 0
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
PASSPORT 20
US leads PET prospects amongst the developed world markets

The important role of emerging economies in contributing to growth in PET is reflected in the strong unit volume growth predicted for China and India, which will lead global unit volume gains for PET bottles in beverages through to 2014. Top 10 Growth Countries for PET Bottles in Beverages 2010-2014 % CAGR Unit growth 2010, Country 2010/ 2010/2014 mn units 2014 (mn units) China 75,419.1 9.9 34,418.2 India 6,067.4 17.8 5,626.1 US 72,437.8 1.0 2,870.0 Brazil 11,380.2 5.5 2,716.8 Indonesia 9,085.4 5.6 2,230.3 Russia 9,777.0 5.2 2,194.8 Germany 16,587.9 3.1 2,167.2 Mexico 13,364.3 3.4 1,900.3 Philippines 8,405.1 4.2 1,490.4 Italy 10,113.3 3.2 1,349.7
In North America and Western Europe, the US, Germany and Italy are most prominent in PET bottle sales, and will continue to see significant unit volume gains. In the US, sales of functional bottled water have declined due to concerns over the high calorie content, which will dent the prospects for PET in water in the US. Still bottled water, despite showing a slowdown in per capita consumption levels, is forecast to see the greatest unit volume sales development, with PET sales in still bottled water predicted to expand by 1.5 billion units between 2010 and 2014, buoyed by a growing preference for smaller pack sizes. The shift from carbonates to healthier alternatives in the US bodes well for PET in RTD tea, with consumers favouring the natural health benefits, such as antioxidant properties, alongside a low calorie content. Half-lemonade and half-iced tea blends performed well in 2010 with Ferolito, Vultaggio & Sons enjoying success with its Arizona Arnold Palmer line. The company edged out Lipton as leader in US value sales of RTD tea in 2010. The importance of RTD tea in the US is evident in Coca-Colas acquisition of Honest Tea (2008) and Nestl Waters investment in tea company Sweet Leaf (2009), with a number of new product launches in PET.
PASSPORT 21
INTRODUCTION


FOCUS ON GLASS BOTTLES
Faltering glass sales for beer in 2010 following recession

Global Glass Bottles by Category 2010
100% 90% 80% 70% 60% 50% 40% 30% 20%
Global off-trade sale of glass bottles in alcoholic and soft drinks reached 249.5 billion units in 2010, an increase of 1% on 2009. Alcoholic drinks form the mainstay of glass bottle demand, where the dominance of glass stems from the long-established use of this format across a number of products. Consumer demand for glass is most developed in alcoholic drinks, through beer, spirits and wine, with global sales of 191.9 billion units in 2010.
Beer is the lead application for glass bottles, accounting for 54% of all 2010 glass bottle sales in soft and alcoholic drinks. However, glass is declining in this category with 2010 off-trade sales down by 1.3 billion units on 2009, with Russias drop-off in demand most damaging.
Despite Russia showing evidence of economic recovery in 2010, with a fall in unemployment and a rise in disposable incomes, the growth potential of glass in beer continues to be hampered by high taxes on beer, as the government seeks to address the nations problem of alcoholism. Russias Ministry of Health has focused particularly on beer. Declines in 2010 were also seen in Latin America, North America and Western Europe. Beer consumption in Western Europe is already high, making growth more difficult to attain.
10%
0% 2010 Beer Carbonates Bottled water Energy drinks RTD tea Spirits Wine Juices RTDs/premixes Other beverages
Spirits and wine have the potential for more upbeat performances for glass, with gains in Asia-Pacific instrumental.
PASSPORT 23
while RTD tea and spirits prove more lucrative for glass
Beers position as leading beverage end-use for glass is Global Glass Performance in weakening as a number of countries exhibit mature and saturated Core Drinks Categories consumption levels. In Western Europe, Germany and the UK saw 7 the greatest declines in glass bottle sales in beer, with off-trade 6 consumption down by 1% annually over 2005-2010 in both countries. At 108 litres per capita in 2010, German beer 5 consumption is second only to the Czech Republic. However, Asia-Pacific 4 spirits offer demand is static, and for glass has been further impacted by takegrowth for glass up of the beverage can, which has shown renewed vigour as retail 3 chains like Penny Markt and Netto reintroduced the can in 2010. 2 Spirits, another core end-use for glass, shows strong prospects, 1 with the highest growth in India and China, while the US and Russia have a much poorer outlook. Russia is expected to suffer 0 the greatest glass losses in spirits, in the wake of the countrys economic recession, alongside the high excise duties being -1 Limited soft placed on spirits, with vodka sales most impacted. US declines, drink prospects -2 though not on a par with Russias, come as PET has made -4 -2 0 2 4 6 8 inroads in economy spirits lines. The current rise in sales of % CAGR 2005-2010 heavily promoted premium and super-premium spirits does, Beer Spirits Carbonates Wine however, hold opportunities for value-added glass. Bottled water Fruit/vegetable juice Energy drinks RTDs/premixes RTD tea represents the single most dynamic area for glass in soft RTD tea drinks, but potential is very specific to Indonesia, where RTD tea Note: Bubble size shows 2010 retail pack in glass bottles is enjoying rising sales as a wellness beverage. unit volumes
Euromonitor International PACKAGING: BEVERAGES % CAGR 2010-2014 PASSPORT 24
Ups and downs of glass in beer: Australias highs to Russias lows

Off-trade sales of beer in glass rose by a 1% CAGR over 2005-2010, with Asia-Pacific and Latin America leading unit volume gains. In Latin America, while Brazil saw growth in alcoholic drinks over 2009-2010, Mexico, Colombia and Venezuela saw declines due to the economic slowdown, especially in the first half of the year. In Colombia, the governments issuance of decrees to generate financial resources for the countrys social security system is another factor. Decree 127/2010, effective February 2010, has led to significant increases in the taxes imposed on both domestic and imported beers, impacting the sales of market leader Bavaria SA (SABMiller Plc), in particular.
Regional Performance of Glass in Beer 2005-2010

Asia-Pacific Australasia Eastern Europe Latin America MEA North America Western Europe
The glass bottles weakest performance in 2010 was % CAGR unit volume growth in Eastern Europe, with declines in Russia most % CAGR 2009-2010 % CAGR 2005-2010 damaging, as the government imposed tax rises and tightened advertising legislation to address the countrys problem of alcoholism. 2010 saw a tripling in the taxes placed on beer, leading to sharp declines for the core formats of glass, PET and beverage cans. Australasia, meanwhile, remains loyal to beer, above other developed world regions, with off-trade beer sales in glass up by 5% in 2010, showing healthy growth comparable to the fast developing markets of China, Brazil and India.
-8
-6
-4
-2
PASSPORT 25
Russias best prospects lie in premium and non-alcohol beer

In July 2010, Russias State Duma (parliament) endorsed plans for a complete ban on drinking alcohol when driving. There is the prospect of legislation placing restrictions on the advertising of beer as the government seeks to reduce alcohol consumption amongst the youth. Brewers falling demand for glass in beer may, however, be offset by the minimum threshold price being set for spirits. Conversely, despite higher unit prices, interest in premium beer remains, driving demand for quality glass. Higher excise duties have not been an obstacle to premium product entries, with launches, such as Eve in a 33cl bottle from lead brewer Baltika PK OAO, likely to continue. Russia: Lager Consumption by Type 2005-2014
2005 2010 2014 0% 20% Economy lager 40% 60% Standard lager 80% 100% Premium lager LOSERS
Glass in low/non-alcohol beer: 2% CAGR 2010-14 Premium Live beer (Heineken); Baltika draught Flavours to attract female drinkers and brewers also expand into malt-based RTDs: ESSA flavoured beer (SABMiller) Eve, low-alcohol malt-based RTD with an ABV of 3.1% (123 calories) in a 33cl bottle. In light of the high excise duties placed on beer, a number of brewers are diversifying into non-alcoholic drinks: carbonates/kvas. Glass in domestic lager: -7% CAGR 2010-14 Accounting for 89% of all beer sold in glass in Russia, domestic lager has borne the brunt of the declines of glass in beer. Over 2010-2014, declining off-trade demand for glass in domestic lager is expected to mean 2 billion fewer glass bottles are used. Brewers favouring cost-effective PET will impact the potential for beverage cans and glass in this core category.
PASSPORT 26
WINNERS
Australians continue to prefer their beer to be in a glass bottle

Of developed world regions, Australasias loyalty to glass in beer is strong and explains why this region leads the growth in glass, with off-trade consumer demand for glass in beer up by 4% in 2010, compared with a far more restrained performance from North America and Western Europe. Consumer interest in premium lager, both imported beers and domestically produced boutique beers, is being boosted by the countrys economic recovery and lower unit prices of premium beers, which are proving a particular stimulus to sales of 330ml glass bottles, the favoured size for imported beers in Australia. The health trend has led to the launch of low-carbohydrate beers, which will produce additional growth for glass to 2014. Australia: Beer by Pack Format 2005-2014
2005
Standard to premium shift is good news for glass Premium lager has been the fastest growing beer category, recording 16% litreage volume growth in 2010, and is a positive area for growth in glass. Carlton Natural Blonde, from Fosters, is a lowcarbohydrate, midstrength premium beer that appeals to the growing health concerns over beer consumption. More launches of premium lowcarbohydrate lagers are expected.
2010
2014
0%
20% Glass bottles
40%
60%
80% Keg
100%
Metal beverage can
PASSPORT 27
Light and craft beer launches favour glass bottles

Mature beer-consuming nations in Europe and North America may show a reduction in total beer consumption but they exhibit greater interest in premium launches. In North America, also as part of the global wellness trend, the launch of light, low ABV, low-calorie beer is a continuing theme. A growing consumer interest in microbreweries and craft beer will be an important driver for on-going growth for glass bottles as this pack type is widely specified for its added-value feature. Molson Coors acquisition of the Sharps brewery in the UK is further indicative of the potential for such premium offerings that extol a beers ever-more important heritage credentials. A Couple of North America Light Beer Launches In 2010/2011
Canada
Molson Canadian 67 Sublime Molson Coors Launched in Canada containing, 67 calories per 34.1cl glass bottle, the new variant comes with a twist of lemon and lime
US
MGD 64 Lemonade MillerCoors MGD 64 Lemonade is a brand extension of MGD 64, one of the pioneers of light beer variants that has swept the US. The product contains just 64 calories and 2.4 g of carbohydrates per 12oz glass bottle serving.
PASSPORT 28
Its positive growth all round for glass bottles in wine

Global penetration of glass in wine has fallen from 86% of off-trade pack sales in 2005 to 83% in 2010. Despite this, the overriding positive development of the category enabled off-trade demand for glass in wine to increase by 2% CAGR over 2005-2010. All regions, with the exception of North America, are forecast to show an improved performance to 2014, as countries exhibit a return to healthier levels of growth after the difficulties of the economic downturn. Australasia and Eastern Europe have the highest penetration of glass in wine, at 92-93% of total sales. In Latin America, glass accounts for just two thirds of all wine sales, owing to the importance of liquid cartons in Argentina and Chile, where they are widely used to package low quality still wine. A move to quality wine is apparent, with glass-bottled wine in Argentina showing a 4% increase in sales against a 6% decline for wine retailed in cartons in 2010. Glass will benefit from Argentines growing preference for fine wines even if, overall, consumers are reducing their wine intake. Health benefits will further enable red wine varietals to lead global gains for glass in wine through to 2014. Regional Performance and Prospects for Glass Bottles in Wine
Asia-Pacific Australasia Eastern Europe Latin America Middle East/Africa
North America
Western Europe -2 0 2 4 % CAGR 6 8 10
% CAGR 2005-2010
% CAGR 2010-2014
Key Point: Wine is a dynamic global growth category for glass as consumption of still light grape wine expands in Asia-Pacific. In some countries, like Argentina, where per capita consumption of wine is actually falling, the prospects for glass remain strong as consumers shift towards higher quality, glass-bottled wine.
PASSPORT 29
Importance of Chinas non-grape wine to bottle sales in Asia-Pacific

Asia-Pacific accounts for 17% of the global 19.5 billion unit off-trade market for glass bottles in wine, second only in size to the traditional home of wine, Western Europe. Asia-Pacific is expected to generate the highest unit volume gains for glass in wine over 2010-2014, to account for 62% of global glass bottle growth in wine over the period. In contrast to other world regions, Asian wine demand is led by non-grape wine, but changes are afoot, with a strong rise in consumption of still light grape wine, which recorded an impressive 16% CAGR over 2005-2010. China, Japan, South Korea and Taiwan are the regions most important consumers of wine in glass bottles. In China, the dominant growth country for the region, still grape wine is enjoying rapid development, with red wine sales in glass outpacing growth of beer, spirits and nongrape wine in 2010. Grape wine is regarded as a fashionable drink, popular amongst young people who prefer the sweet taste of grape wine to non-grape. The entrance of multinational brands on the Chinese wine market supports growth, with lower ABV grape wine likely to take share from non-grape, rice wines and higher ABV local baijiu spirits.
Asia-Pacific Glass Demand in Wine by Country in 2010

China Japan South Korea Taiwan India Other
Core Asia-Pacific Countries Glass by Wine Type in 2010

100% 80% 60% 40% 20% 0% China Non-grape wine Still light grape wine Japan South Korea Taiwan Sparkling wine Fortified wine and vermouth
PASSPORT 30
Robust Indian spirits industry suggests a positive outlook for glass

Glass bottles will continue to lose market position, Top 10 Growth Countries for Glass Bottles in with their share of soft and alcoholic drink sales set Beverages 2010-2014 to fall from 27% in 2010 to 24% in 2014. Unit growth 2010, % CAGR In actual unit volume terms, glass bottles are, Country 2010-2014 mn units 2010-2014 however, forecast a rise of 1% CAGR over 2010-14. (mn units) The presence of a strong returnables system India 16,926.7 10.4 8,208.4 supports the positive outlook for glass in Mexico, Mexico 14,054.7 2.0 1,157.6 Colombia, the Philippines and Turkey. Indonesia 6,642.0 3.5 988.8 Conversely, traditionally strong users of returnable South Africa 5,563.3 3.7 872.4 glass systems, such as Germany and China, are Turkey 2,825.0 6.9 867.2 seeing a shift to non-returnable beverage cans in Australia 3,686.1 4.9 774.0 beer and PET in soft drinks, limiting the growth Colombia 5,646.0 3.2 763.7 prospects for glass. Philippines 4,617.0 3.8 737.0 India has the best global growth prospects for glass Vietnam 1,508.4 8.3 570.4 through significant national demand for spirits and Egypt 1,758.5 7.2 566.7 beer, set to build on the recovery and robust volume expansion already recorded in 2010. Other whiskey, which accounts for 61% of total Indian off-trade spirits consumption, will continue to drive demand for glass in India to 2014. Brand owners are additionally making requests for added-value glass bottles in terms of colour and shape, most notably in wine and spirits. Among the brands that experimented with new premium glass bottle launches in 2010 were Kingfisher Ultra, Whyte & Mackay Special, Pinky Vodka, and Cavalli Vodka. The ongoing switch by low income consumers from country liquor to branded brown spirits, combined with the rise in the urban youth population, suggests a dynamic future for Indias glass industry.
INTRODUCTION


Beer outperforms carbonates to become top beverage can end-use

Global Beverage Cans by Category 2010
250
Global off-trade demand for metal beverage cans in alcoholic and soft drinks reached 240.6 billion units in 2010, an increase of 2% on 2009. As far as positioning compared to other pack types is concerned, the beverage can has lost share to the leaps in progress made by the most purchased beverage pack type, the PET bottle, particularly within carbonates. Beer and carbonates remain the core end-uses for the can, with 78% of global off-trade beverage can demand in 2010.
200
Billion units
150
100
A consumer shift away from carbonates to alternative beverages in a number of markets, for health reasons, has had a detrimental impact on beverage can sales, whilst the wider application of PET bottles in on-the-go sizes further hampered the performance of cans in 2010. A far more positive outlook for the beverage can is found in beer, with China, Brazil and India offering the best expansion opportunities enabling beer to surpass carbonates in can sales by 2011. Regional expansion of functional drinks, driven by energy drinks brand Red Bull, contributed further to can growth in 2010.
2005 2010 Beer RTD coffee RTD tea Bottled water
50
Carbonates Fruit/vegetable juice Functional drinks RTDs Other beverages
Wine has a niche presence in beverage can sales, specifically in the classic single-serve measures of 187ml, 200ml and 250ml. The beverage can is, however, seeing some gains as part of the pack diversification witnessed in wine, alongside a number of bag-in-box, PET bottle, shaped carton and pouch entries in 2010.
PACKAGING: BEVERAGES PASSPORT 33
Beer and wider supply of energy drinks drive can sales

Beers global strength in beverage cans comes predominantly Global Beverage Cans through domestic lager sales. The Football World Cup was a 2005-2014 catalyst for increased 2010 sales. China and Brazil recorded the 10 strongest growth over 2005-2010, with these two countries alone accounting for 87% of incremental beverage can sales, as the 8 purchase of beer in these countries was less affected by the global downturn and as beverage cans recorded gains in share over glass. 6 On the downside, the US and the UK, two major beverage can 4 nations for beer offer little growth potential, as consumption levels fall and premium trends favour glass. Premium, craft beers are 2 doing well for glass in the US, whilst a newfound interest in world beers and local/regional bottled ales in the UK indicates a change in 0 beer consumption habits, also to the benefit of glass. For carbonates, the Asia-Pacific and MEA regions have the best -2 prospects. Western European demand is forecast to see a CAGR of just 1% to 2014, although growth in France and Germany is set to -4 far surpass this. In France, brand owners launch of smaller portion -6 -3 0 3 6 9 12 15 % CAGR 2005-2010 sizes of 150ml, in response to health concerns over child obesity, have provided a stimulus for can sales. Such health concerns are Carbonates Beer Fruit/vegetable juice RTD coffee fuelling the growth of smaller can sizes, alongside a rise in the Functional drinks RTD tea purchase of low-calorie over regular carbonates. RTDs Functional drinks may only represent 3% of global can sales, but Note: Bubble size shows 2010 retail pack unit volumes are a strong growth contender through uptake of energy drinks.
Euromonitor International PACKAGING: BEVERAGES % CAGR 2010-2014 PASSPORT 34
Regional winners and losers for the beer can to 2014

Across most regions, with the exception of North America, glass is the preferred pack for beer.
WINNERS LOSERS Glass bottles Liquid cartons PET bottles Keg
However, global forecast growth favours the can, with a 7% 2010-2014 CAGR, led by China. Off-trade Beer Pack Mix by Region 2010
100% 90%
Asia-Pacific, Latin America, Europe China, Brazil, India, Mexico and Japan are forecast to lead beverage can gains to 2014. Progress in Eastern Europe is expected to be led by domestic lager in Russia and Poland. In Poland, embossing has been used for premium launches, such as the Lech brand from Kompania Piwowarska SA. In Western Europe, Germany offers strong potential as an increasing number of brands reintroduce the beverage can. Australasia, North America In Australia, the glass bottle retains its dominance, with a number of the premium product launches in 2010 favouring the glass bottle over the beverage can. In North America, beer consumption has slowed in correlation with the health of the national economy. Despite off-trade sales proving more resilient, US beverage can sales in beer fell 2% in 2010. A current move to craft/craft-like beers will constrain growth.
PASSPORT 35
80%
70% 60% 50% 40% 30% 20% 10% 0%
Metal beverage can Other metal Other packaging
Brazils drink and drive legislation a boon for beverage can sales
Beverage can penetration in beer is lowest in Latin America, at 26% of all beers sold through the offtrade channel in 2010, but is showing rapid growth, led by Brazil where the can is seeing growing consumer acceptance. Rising disposable incomes and increasing consumer confidence are contributing to growth. In per capita terms, Brazilian off-trade beer consumption rose by 10% in 2010, making it the most dynamic growth country in Latin America for beer, and the third highest growth country in global terms, after India and Vietnam. The growing preference for socialising at home is the impetus behind off-trade sales growth, further supported by more stringent drink and drive legislation (Lei Seca). This higher growth in offtrade sales is providing a positive boost for the can, which has a far stronger presence in the off-trade. Investment activity by brewers, such as Heinekens acquisition of FEMSA Cerveza in early 2010, with plans for increased production, indicates potential for packagers, with premium and dark beers to show the highest levels of growth.
Brazil Beer Consumption Growth by Channel 2005-2014

8 7
6
% CAGR 5 4 3
2
1 0 % CAGR 2005-2010 Off-trade % CAGR 2010-2014 On-trade
Brazils Off-trade Beer Packaging Mix (%)

2014
2010
2005
0%
20%
40%
60%
80%
100%
Glass bottles
Metal beverage can
PASSPORT 36
Beverage can prospects in carbonates led by emerging markets

In global terms, prospects for the beverage can in carbonates are weak, with a forecast CAGR of less than 1% to 2014. Declines are being seen in key developed markets, as consumers seek healthier beverage options, most markedly in the US, reducing global growth potential. There are, however, growth opportunities to be had, with Asia-Pacific and MEA prominent targets for beverage can growth. Indias rapidly expanding demand for the beverage can comes from increased urbanisation, with carbonates the primary driver for beverage cans in India. Beverage manufacturers are widening distribution of beverage cans in organised retail chains in urban city centres. This, combined with more modern, Western-influenced lifestyles, is behind take-up amongst the youth demographic.
Top 10 Growth Countries for Beverage Cans in Carbonates 2010-2014

Country India France Egypt Russia China Saudi Arabia Brazil UK South Korea Indonesia 2010, % CAGR mn units 2010-2014 639.5 2,128.2 929.9 761.2 5,254.2 1,646.6 1,489.4 2,975.9 1,562.2 487.7 24.6 5.7 9.9 9.3 1.3 3.5 2.6 1.1 1.6 3.9 Absolute growth (million units) 2010-2014 900.0 532.2 428.4 327.0 269.0 243.8 158.4 127.9 104.5 79.6
Energy drinks and juices also offer good growth opportunities for the beverage can in India.
MEA regional prospects are led by Egypt, where the youth demographic is a key driver of can sales. The introduction of the slimline 250ml beverage can is proving successful on two levels: as a lower priced pack option and as a reduced portion size meeting health concerns over calorie intake, with launches from Al Ahram Beverages Co and Schweppes.
PASSPORT 37
Buoyant development in energy drinks, except in the US

After beer and carbonates, functional drinks constitute the third strongest growth area for cans to 2014. Latin America offers especially strong growth prospects for cans in energy drinks, which stems from gains made from a low per capita basis. Brazil and Chile lead prospects, driven by new brand launches. Gladiator (Coca-Cola Brasil) and Monster (Globalbev) relative newcomers to Brazil have been launched in a larger 473ml size, as a good value-for-money proposition compared with the industry standard 250ml can. Prospects for growth in Western Europe are led by France, where energy drinks is still a relatively young category and is being supported by strong marketing campaigns. Natural, organic and relaxation drinks are set to expand further. Meanwhile, the outlook for the more developed North America region is weak, as PET and metal bottle introductions erode the share of the beverage can. Beverage Can Sales in Energy Drinks by Region 2010
30 25 20 % CAGR 15
Beverage Can Performance and Prospects in Energy Drinks
10
5 0 -5
North America Asia-Pacific Latin America Australasia
Western Europe Eastern Europe Middle East and Africa
Western Europe
Latin America
Asia-Pacific
Eastern Europe
Australasia Middle East and Africa
North America
% CAGR 2009-2010
% CAGR 2010-2014
PASSPORT 38
INTRODUCTION


FOCUS ON LIQUID CARTONS
Global liquid carton supply is concentrated in juices and RTD tea

Global Liquid Cartons by Category 2005/2010
60
Global off-trade consumption of liquid cartons in alcoholic and soft drinks reached 55.1 billion units in 2010, an increase of 7% on 2009. Demand is concentrated in juices and RTD tea, which accounted for 88% of global liquid carton sales in beverages in 2010. Both leading categories saw growth over 2005-2010. Liquid carton sales in juice were up by a 4% CAGR, while RTD tea saw an impressive12% CAGR, driven by Asian still RTD tea. Juices share of global liquid carton sales is falling, but they offer significant potential for development through rising per capita consumption in the Asia-Pacific, Latin America and MEA regions, with China, Vietnam and Indonesia particularly notable growth markets. Chinas substantial growth in the worlds FMCG markets means that this country alone is expected to account for 47% of global liquid carton unit volume gains in juices over 2010-2014. RTD teas stellar performance in liquid cartons has been driven by its strong health credentials, as consumers the world over increasingly adjust their calorie intake and beverage consumption as a means to lead healthier lifestyles. Global liquid carton sales in RTD tea are led by Asia-Pacific, with strong growth forecast. Asia-Pacific, through RTD tea, and Latin America, through juices, are forecast to see the greatest gains for liquid cartons through to 2014.
50
40 Billion units
30
20
10
0 2005 Fruit/vegetable juice Wine RTD coffee Other beverages 2010 RTD tea Functional drinks Beer
PASSPORT 40
Year-round RTD tea sales to expand liquid cartons potential

Global liquid carton demand in beverages is forecast to rise by a 7% CAGR over 2010-2014, with still RTD tea in China the top volume growth category/country combination, underpinned by health-oriented launches. 2010 launches from Ting Hsin, President and Coca-Cola, with numerous herbal tea entries, illustrate this trend. Heqizheng Herbal Tea and Shenhui have joined the leading top RTD tea brands Wong Lo Kat and Master Kong. Strong prospects for liquid cartons are also to be found in Europe, with Portugal, Netherlands and Italy showing a rising preference for RTD tea in the summer months. Low-calorie, reduced sugar and green tea variants are all serving to expand consumption yearround, as consumers seek health-oriented drinks. Amongst the more niche but successful applications of liquid cartons are bottled water and wine, where shaped cartons are performing well. In wine, global declines for brick cartons in Argentina come as consumers increasingly shift away from lower quality wine to added-value lines in glass. However, carton declines in wine in Argentina are being offset by rising sales of shaped cartons in Western Europe and the US. RTD coffee presents a weaker outlook, attributable to declines in Taiwan and Japan. Japanese consumption of RTD coffee is saturated. With per capita consumption at 24 litres, it far exceeds any other country and, as such, offers little scope for growth.
Euromonitor International PACKAGING: BEVERAGES % CAGR 2010-2014
Liquid Carton Performance in Core Drinks Categories

14
12
10
0 -4 -2 0 2 4 6 8 10 12 % CAGR 2005-2010 Fruit/vegetable juice Wine RTD coffee RTD tea Functional drinks Beer
PASSPORT 41
Shaped cartons dynamism in sharp contrast to gable top slowdown

The brick liquid carton accounts for 83% of all liquid carton sales across beverage categories, and enjoys continuing healthy levels of growth, especially in AsiaPacific.
Million units growth
Liquid Carton Performance by Type 2009-2010

3,500 3,000 2,500 2,000 1,500 1,000 500 14 12 10 8 6 4 2 % 2009-2010 growth
It is, however, the shaped liquid carton that is making the biggest headlines, having recorded a 15% CAGR between 2005 and 2010, with China, Argentina and US accounting for 72% of 2009-10 sales growth. The presence of the gable top liquid carton in drinks is dominated by juices in North America. The gable top is faring less well than either the brick or shaped carton, suffering falling demand in the US and Japan. US beverage demand for gable tops fell by 6% in 2010, with significant losses in 100% juice, as US consumers reduced their juice intake in favour of other beverages offering lower sugar content and functional benefits, an area where RTD tea is performing well. Furthermore, both PET and HDPE bottles are showing gains at the expense of carton, especially in single-serve sizes. In Japan, gable top declines are spread across poorly performing juice, RTD tea/coffee and wine categories.
0
Brick Gable top Shaped % 2009-2010 growth
2009-2010 growth (million units)
Top Growth Markets for Shaped Cartons 2010-14 (Leading Growth Category) China (Still RTD tea) Russia (100% juice) US (Wine) Indonesia (Still RTD tea) Italy (100% juice)
PASSPORT 42
Buoyant brick gains driven by developed and developing Asia

Developed Japan enjoys carton growth in tea In fast-developing China, tea also drives sales Brick cartons for drinks rose by 6% in Japan in 2010. Brick cartons for drinks rose 15% in China in 2010. Still RTD tea excluding Asian saw the highest volume The strong development of Chinese herbal tea gains for the brick liquid carton in 2010, though this drove 2010 growth and prospects. Leading herbal beverage is coming under pressure from interest in tea manufacturer Wong Lo Kat (JDB Group) uses a other wellness beverages amongst its predominantly range of liquid carton sizes finished with a light female consumer base. Functional antioxidant lines green print design, which is intended to reflect the and the development of RTD black tea should help to healthy image of the product. expand consumption, with Suntorys Lipton, for Global liquid carton producer Tetra Pak has example, available in a range of fruit flavours. accelerated its recycling activities in China by Small sizes for functional drinks offer potential for liquid cartons. Nippon Paper Group launched what is noted as the worlds smallest drinks brick carton, the Ultraslim, in 65ml and 80ml sizes. Launched in 2009 for Yakult, the small size could expand sales as it is suitably sized for the countrys elderly population. Japan: Top Growth Categories for the Brick Carton Unit growth 2009-10 Category (million units) Still RTD tea excluding Asian Asian still RTD tea
establishing a recycling network. This helps to meet the global demand for more sustainable practices seen across developing and developed world economies alike. Gable top and other shaped cartons are further showing strong gains. China: Top Growth Categories for the Brick Carton Unit growth 2009-10 Category (million units) Asian still RTD tea Juice drinks 712.2 649.1
PASSPORT 43
56.1 52.3
Interesting juice carton growth to note in Asia and Australasia

Fruit/vegetable juice remains the most important avenue for liquid carton volume gains, with demand led by juice drinks. Demand is predicted to rise by a 7% CAGR over 2010-2014. Asia-Pacific, the largest region for juice sales in liquid cartons, has seen a strong performance and has good prospects, driven by China and India. These two countries, led by China, are forecast to account for 62% of liquid carton gains in juices over 2010-2014. Chinese consumers regard juice sold in liquid cartons as fresh and healthy, with a high nutritional content. Despite juice drinks retailed in liquid cartons typically carrying a higher price tag, demand will remain strong, as wealthier and health-conscious consumers are willing to pay a premium for juice in cartons. Australasia, the smallest region when it comes to global liquid carton demand for juices, has good prospects. Over 2005-2010, energy drinks, sports drinks and RTD tea dented juice carton sales, but renewed consumer interest in premium juices is apparent, with a number of launches providing health benefits, such as antioxidants, and organic lines, contributing to a positive outlook for liquid carton sales. Regional Performance and Prospects for Liquid Cartons in Juices
11 % CAGR
-4
Asia-Pacific Latin America Western Europe Eastern Europe Middle East and Africa Australasia North America
% CAGR 2005-2010
% CAGR 2010-2014
PASSPORT 44
Differentiation and value savings promote shaped cartons in wine

The niche wine packaging formats of pouches, shaped liquid cartons and PET bottles are forecast strong development. The US leads in global sales of shaped liquid cartons in wine, with Boisset Vineyards proving to be an especially strong innovator in wine packaging, through launches in metal bottles, PET bottles and shaped cartons. Development of the shaped carton cuts across both developed and developing countries. In Ukraine, the rising specification of liquid cartons is supported by the minimum prices fixed in December 2009 of UAH12 per 0.7L for bottled wine as against a more cost-effective UAH12 for 1-litre wine retailed in liquid cartons. Top Five Growth Countries for Shaped Liquid Cartons in Wine 2010-2014 2010, mn units 89.8 28.9 8.5 6.2 2.3 % Absolute growth CAGR (mn units) 2010-14 2010-2014 17.6 9.7 13.6 5.8 12.8 81.7 12.9 5.7 1.6 1.4
Country
US Italy
Ukraine
Carte de Vinos Koblevo VAT 1-litre shaped carton 2009
Sweden
Fair & Square Gierts Vinimport AB 1-litre shaped carton 2010 Germany UK Ukraine
PASSPORT 45
INTRODUCTION


PROSPECTS
Post-downturn, more positive outlook for drinks packaging to 2014

% Unit Volume Growth for Soft and Alcoholic Drinks 2010-2014
Key: Decline Low growth Medium growth High growth Not illustrated
Emerging Asia-Pacific, Middle East and Africa and Latin America offer the most buoyant rates of growth. Eastern Europe sees a return to growth, in particular for Russia and Ukraine, the two countries most severely impacted by the economic crisis. China will lead global beverage packaging growth to 2014. Japans ageing population and stagnant consumption will contribute to its seeing the greatest losses, with prospects further damaged by the earthquake in 2011.
PROSPECTS
Emerging markets, the driving force for beverage packaging growth

Key Forecast Actual Volume Growth Pack Types in Beverages 2010-2014 PET BOTTLES: China, India, US, Brazil, Indonesia METAL BEVERAGE CANS: China, Brazil, India, France BRICK LIQUID CARTONS: China, India, Brazil GLASS BOTTLES: India, Mexico, Indonesia FLEXIBLE PLASTIC: Indonesia, Mexico, China FOLDING CARTONS: China, Italy The importance of the emerging markets of Asia-Pacific and Latin America to global packaging gains through to 2014 is shown by the strong presence of countries in these regions, headed up by China and India, amongst the leading unit volume growth countries across all packaging formats. The unassailable PET bottle will make further gains across emerging and developed markets alike, challenging the position of beverage cans, glass and liquid cartons, most heavily in the single-serve arena, with recycled content developments a more common feature to improve the pack types ecological profile. Reduced portion sizes present unit volume growth opportunities in more developed countries, notably the US and France. In an increasingly competitive marketplace, beverages that traditionally specify glass, such as wine and spirits, show elements of differentiation, with launches of beverage cans, bag-in-box and shaped liquid cartons to satisfy different drinking occasion needs.
PASSPORT 48
FLEXIBLE ALUMINIUM/PLASTIC:
China, Brazil, Philippines, India THIN WALL PLASTIC CONTAINERS: Indonesia, Japan, Italy
REPORT DEFINITIONS
Definitions
This Global Beverage Packaging briefing examines the packaging performance of the following beverage categories: Alcoholic Drinks Beer Wine Spirits RTDs/premixes Cider And the following beverage pack types: PET Bottles Glass Bottles
Metal Beverage Cans

Liquid Cartons Other Packaging Formats include: Flexible Plastic, Stand-up Pouches, HDPE Bottles, Thin Wall Plastic Containers, Other Metal and Other Plastic Bottles
Soft Drinks
Carbonates Bottled Water Fruit/vegetable Juice Concentrates Functional Drinks Asian Speciality Drinks RTD Coffee
PASSPORT 49
Experience more...
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PASSPORT 50

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PERFORMANCE AND PROSPECTS FOR BEVERAGE PACKAGING MATERIALS

GLOBAL DRINKS PACKAGING OVERVIEW

FOCUS ON METAL BEVERAGE CANS

PET Bottles 331.6 billion units

Glass Bottles 249.5 billion units

Metal Beverage Cans 240.6 billion units

Liquid Cartons 55.1 billion units

Flexible Plastic 10.9 billion units

Thin Wall Plastic Containers 10.2 billion units

Flexible aluminium/ plastic 8.5 billion units

Stand-up Pouches 6.4 billion units

HDPE Bottles 5.9 billion units

Paperbased Container 5.8 billion units

Other Metal 5.7 billion units

Other Packaging 8 billion units

GLOBAL DRINKS PACKAGING OVERVIEW

FOCUS ON METAL BEVERAGE CANS

GLOBAL DRINKS PACKAGING OVERVIEW

Beverages is second only to foods in FMCG packaging demand

2,500 Billion units

Food packaging Alcoholic drinks packaging Home care packaging

GLOBAL DRINKS PACKAGING OVERVIEW

Absolute importance of emerging markets to 2010 performance

GLOBAL DRINKS PACKAGING OVERVIEW

Economic recovery proves fruitful for beverage packagers

Global Beverage Packaging by Format 2005-2014

0 2005 2010 2014

GLOBAL DRINKS PACKAGING OVERVIEW

PET makes most headway at expense of glass and beverage cans

Global Soft Drinks by Pack Format 2005/2010/2014

GLOBAL DRINKS PACKAGING OVERVIEW

A round-up of beverage packaging performance by format in 2010

GLOBAL DRINKS PACKAGING OVERVIEW

Global Beverage Packaging Performance and Prospects

Note: Bubble size shows 2010 retail pack unit volumes

GLOBAL DRINKS PACKAGING OVERVIEW

Dynamism in liquid cartons comes through growth in tea and juices

Absolute growth 2009-2010 (million units)

GLOBAL DRINKS PACKAGING OVERVIEW

FOCUS ON METAL BEVERAGE CANS

FOCUS ON PET BOTTLES

RTD tea and juices become increasingly important to PET sales

FOCUS ON PET BOTTLES

Global PET Bottles: Performance in Core Drinks Categories

Healthy beverage choices and economically priced spirits do well

Note: Bubble size shows 2010 retail pack unit volumes

FOCUS ON PET BOTTLES

Mexico Spain France Italy Belgium Turkey US Portugal Israel Indonesia

FOCUS ON PET BOTTLES

Developing countries provide best per capita growth opportunities

4 Asia-Pacific North America Australasia

Western Europe Eastern Europe

FOCUS ON PET BOTTLES

China and India to lead PET bottle volume gains in water

Coca-Cola April 2010

FOCUS ON PET BOTTLES

Juices further provide PET with ample regional opportunities

Regional Performance and Prospects for PET Bottles in Fruit/Vegetable Juice

FOCUS ON PET BOTTLES

China Pack Breakdown for Juice Drinks in 2010

China vs World in PET Bottle Growth for Juice Drinks 2009-2014

FOCUS ON PET BOTTLES

US leads PET prospects amongst the developed world markets