According to Canadean's latest quarterly beverage tracker, Q2 saw a number of strongly contrasting commercial beverage performances across West and East Europe.
West Europe benefited generally from milder temperatures than the corresponding quarter of 2013, and lower inflation rates helping to improve confidence levels.
East Europe, however, suffered from a cocktail of adverse weather conditions, cautious consumer spending, stringent alcohol legislation and the impact of the Ukrainian conflict. Few countries in East Europe recorded any appreciable growth.
The FIFA World Cup provided some stimulus for soft drinks and beer in West Europe, with extensive marketing activity by the major soft drinks producers and brewers focused on the tournament.
The effect was, however, more muted in those countries eliminated early from the competition.
In Germany both carbonates and beer bucked the longer term trend, while the Netherlands saw a healthy uplift in beer sales.
The scenario in East Europe, however, was depressed. Carbonates took the brunt of the soft drinks decrease, heavily influenced by Russia where unfavourable weather and an increase in ex-factory prices due to devaluation of the rouble hit hard.
Russia was also the primary reason for the fall in quarterly beer consumption in East Europe. Interestingly it was the lower end of the market that suffered the most in Russia, while premium beer is holding up. It seems a culture of drinking less but better is emerging, helping to sustain market value.
Looking forward to the rest of 2014, geopolitical issues could impact sales, with many producers recently citing foreign exchange headwinds and cost input pressures as likely to make for a difficult trading environment.
Expectations are that both East and West Europe will see a flat performance for commercial beverages in 2014.
Producers can be expected to face the volume challenges with a strong focus on driving value growth through new packaging designs to differentiate their products from the competition and drive brand equity, and development of value-added variants.
