The Fundamental Change in the European Non-Alcoholic Beverage Market

NARTD consumption in western Europe has been static in recent years. At the same time, brands have shifted from producing a small range of large stock-keeping units (SKUs) to a large number of smaller SKUs. This complexity is set to increase further, even though growth in SKUs will not be infinite and will slow down in the future. 

Many brand owners have not yet fully adjusted their operations footprint to the new landscape. As changeovers on production lines cost a lot of time, brand owners should reconsider their production model. The logical result, we believe, will be additional consolidation among established bottling networks, along with a growing role for larger, full-service contract manufacturers. 

“The recently observed consolidation in the Coca-Cola bottling landscape and the acquisitions made by Refresco in North America are indications of things to come,” according to Francois Sonneville, Senior Analyst – Beverages. “Although we expect some small, efficient toll manufacturers to survive in the near term, we believe they will eventually need to decide if they want to be consolidators or be acquired.”