Sales of soft drinks have continued their long term growth, boosted by the hot summers of 1994 and 1995. Other factors contributing to market growth include changing eating habits, with more casual meals and fast food, changing attitudes towards alcohol, with the choosing of alternatives to alcoholic drinks becoming socially acceptable, and greater awareness of the need for a healthy diet.

A projected decline in the numbers of 15-34 year olds could depress demand, particularly for carbonates, but should also see further development of soft drinks aimed at more mature consumers.

The total drinks market has increased in value by 28 percent between 1991 and 1996. Although there has been pressure on soft drinks prices, while increases in alcoholic drinks have been ahead of inflation, boosted by increases in excise duty, the value of the soft drinks market has grown by 47 percent over the same period.

The alcoholic drinks sector is still by far the largest in value terms, with its share increased by the inclusion of excise duty and the high margins in the on-trade, soft drinks have increased their share of the total market by 3 percentage points over the period covered, to 26 percent.

The still very small health and energy drinks sector has shown the highest rate of growth, but carbonates have also easily outperformed the whole soft drinks market. This has increased their already predominant share to 54 percent by volume and 75 percent by value. Dilutables account for 31 percent of the total market volume, at ready to drink strength, but only 7 percent of the market value.

The market is dominated by two major soft drinks specialist companies, which have interests in all sectors of the market, Coca-Cola Schweppes and Britvic. Few other companies span the whole market, with most concentrating on particular areas of strength.

Recorded advertising expenditure in main media on soft drinks amounted to some £77 million in 1995, with by far the largest share, £55 million, being spent on carbonates. More than £8 million was spent on the emergent health and energy drinks sector.

Distribution is being increasingly dominated by the major grocery multiples. Smaller outlets, however, remain important for impulse purchasing, which accounts for a large share of sales, particularly in carbonates and juice drinks. More specialist outlets have retained a significant share of health and energy drink sales.

Sales of carbonated drinks have recovered from a fall in 1991 to resume their long term growth, which has been further boosted by the hot summers in 1994 and 1995. Volume sales have increased by 38 percent since 1991, but lower average prices have meant that the market value has improved by 17 percent over the same period.

Within the carbonates sector, colas have improved their dominant share to 48 percent of the total by volume, helped by the high profiles maintained by the major brands, Coca-Cola and Pepsi, and by new entrants such as Virgin and Sainsbury's Classic.

Other flavours have also grown, with the range on offer being extended, but both lemonade and mixers have been losing share.

Low calorie and no sugar carbonates, and caffeine-free colas, have become a very important feature of the market, increasing their share of the sector to 39 percent by volume in 1996.

Low calorie, no sugar and caffeine-free colas have grown to account for 52 percent of all cola sales.

Orange remains the most popular in other flavours, followed by lemon and lime, and shandy. There has been an increase in launches of more interesting, unusual flavours, often intended to appeal more to adults, than the children and teenagers who traditionally drink most carbonates.

Exclusive consumer research for this report showed that 53 percent of respondents had bought diet cola, 43 percent non-diet cola and 16 percent caffeine-free cola. In general, cola was biased towards the young, with the presence of children in the household being a very important factor. Penetration was highest in Lancashire, Scotland and Southern, and lowest in the South West.

Diet fruit flavoured carbonates had been bought by 32 percent, while 28 percent had bought non-diet versions. There was again a young, upmarket bias, with children once more an important factor. Yorkshire had the highest penetration for diet versions and London for the non-diet drinks, while the North East was lowest for both.

Coca-Cola continues to dominate the cola sector, with a 35 percent share for the regular version and a further 25 percent for Diet Coke. The Pepsi range takes another 21 percent, leaving little scope for other brands and own-label products.

The wide variety of flavours available in the other flavours segment means that the leading shares are much smaller. Tango, which has been extended into a range of flavours, has the largest share with 12 percent, followed by Irn-Bru with 10 percent. Own-label lines have established a significant presence in the segment with a share of 27 percent.

Branding is not so important in the lemonade segment, which has become a commodity market to a large extent, with own-labels accounting for 60 percent of sales.

Own-label brands have also become important in mixers, helped by the trend towards drinking alcohol more at home, and now take half of the segment's volume. The prestige of the Schweppes name has helped it retain a substantial share at 40 percent.

Advertising expenditure on carbonates rose to £55 million in 1995, with a significant further increase in 1996 anticipated. Colas accounted for some two thirds of the total in 1995, with the rest being spent on other flavours. Nearly £29 million was spent on the Coca-Cola brand alone, far more than on all non-carbonated soft drinks.

Grocery outlets continue to increase their share of sales, taking 58 percent by volume in 1996. CTNs and other small outlets are important for impulse purchasing, while the on-trade has retained 18 percent of the sector, helped by the increasing popularity of carbonates in pubs and in fast food outlets.

As very cheap drinks, dilutables tend to sell well in periods of economic constraint, and sales did fall in 1993 as the economy started to recover. The hot weather, and growth in the numbers of small children, however, brought renewed growth in 1994, which has been sustained.

Growth overall to 1996 was 13 percent by volume, but only 5 percent by value as there has been much pressure on pricing

There has been a general improvement in the quality of dilutable drinks, which has reduced the share taken by the premium high juice drinks. Concern about children's health has prompted an increase in low sugar dilutables, which almost trebled volume sales between 1991 and 1996 to account for almost half of sales.

Orange remains the most popular flavour, but its share is gradually being reduced as a wider choice becomes available, with blends increasing in popularity.

The consumer research found that 46 percent of respondents had bought concentrated fruit squash.

The presence of children in the household was again an important factor. Men and women were equally likely to have bought, but there was a distinct downmarket bias.

The highest penetration levels were found in Yorkshire and East Anglia, and the lowest in Scotland, London and the South West.

Robinsons, now handled by Britvic, continues to be the dominant brand with one third of volume sales, followed by Kia-Ora and Ribena. Retailers' own-labels have grown to take 43 percent of the sector.

Advertising expenditure fell to £3.7 million in 1995, mainly due to a severe reduction in activity for Robinsons, which was undergoing a change of ownership. Expenditure for 1996 is expected to return to a level of around £6 million. In most years Robinsons is the major advertiser, with Ribena accounting for most of the rest.

Sales in the on-trade are very small and grocery outlets dominate with 85 percent of volume sales. As impulse purchasing is not a factor in this sector, smaller outlets such as CTNs and garage forecourts are relatively unimportant.

After a slight fall in 1992, sales of fruit juice have returned to steady growth, with an overall increase of 17 percent in volume to 1996. Fluctuations in world commodity prices affect retail prices in Britain and the value of the market, which had improved by just 10 percent over the same period.

Pure juice has maintained a steady two thirds share of sales, but within this there has been a shift to the more premium short life products, which have increased their share from 10 percent in 1991 to 16 percent in 1996. The share taken by juice drinks has also improved, with the introduction of better quality drinks intended to attract adult drinkers.

Once again orange continues to be the most popular flavour with 71 percent of pure juice sales. Blends are much more popular in juice drinks, accounting for 45 percent of the segment, but orange is again the most popular single flavour, with 27 percent.

The consumer research found 57 percent buying small cartons of fruit juice and 54 percent large packs.

The presence of children was once again very important and penetration was well below average for those aged over 55, while there was a distinct upmarket bias for both sizes.

The Midlands was above average and the North East well below for both sizes, while London and Yorkshire were well above average for large packs.

Freshly squeezed juice had been bought by 50 percent of respondents, and had a younger, upmarket bias. It was most popular in Lancashire and London, and well below average in East Anglia and the South West.

The pure juice segment is very much a commodity market, with own-labels taking nearly two thirds of sales. Del Monte is the leading brand, but only has a 10 percent volume share. Although brands are more important in juice drinks, own-labels have improved to 25 percent of this segment. Five Alive, with 21 percent, has maintained a narrow lead over Libby's "C".

Advertising expenditure for fruit juice is rising quite rapidly, reaching just over £10 million in 1995. Of this, more than £9 million was spent on juice drinks and this proportion is increasing, with new entrants such as Ribena Juice & Fibre and Oasis being launched with large support budgets. Fruitopia spent some £4 million in the first half of 1996 before being withdrawn from the market.

Although impulse sales are an important factor in this sector, these tend to be in small cartons, while supermarkets sell multi-packs of one litre cartons. Inevitably this means that the pattern of distribution by volume is weighted towards the grocery trade, which accounts for some 78 percent of the total, with the major multiples taking a very high share.

As relatively expensive items, health and energy drinks suffered during the recession, but with economic recovery have resumed a high rate of growth. Volume sales improved by 40 percent to 1996, with the value of the sector up by 38 percent.

Both sports drinks and herbal fruit drinks have more than doubled volume sales since 1991, albeit from a very small base in both cases. Energy drinks, however, have been revived by the appearance of several well supported new brands and have returned to growth. They are still, by a wide margin, the largest segment in this sector.

The consumer research found that 27 percent had bought a sports drink, and 23 percent a vitamin enriched drink.

Only 12 percent of respondents had bought a herbal drink. These were most popular among 15-24 and 35-54 year olds, and had a distinct upmarket bias. Penetration was significantly above average in the South West and Southern, and below in the North East, Scotland, Yorkshire and East Anglia.

Beecham's Lucozade brands dominate the energy and sports drinks segments, although the energy drinks segment has become much more competitive in 1996. Orchid Drinks is the major company in herbal drinks with the leading brands Aqua Libra and Purdey's, as well as several other products.

Advertising expenditure more than doubled in 1995 to almost £8.5 million, as competition in the energy drinks segment has intensified. Lucozade accounted for two thirds of the 1995 total, with the remainder being spent on Red Bull.

The grocery multiples are increasing their share of sales in this sector, but chemists remain an important outlet, as are sports centres and shops for energy and sports drinks, and health food stores for herbal fruit drinks.

The alcoholic carbonates market was started in June 1995. Helped by the long hot summer and a strong appeal to young adults, sales have expanded rapidly, reaching an estimated 65 million litres at a value of £160 million in 1996.

The consumer research found a very high proportion, 27 percent, of respondents had already bought these new drinks.

There was a very strong bias towards younger consumers, with East Anglia, Southern and the North East being the areas with highest penetration, while Scotland was well below average.

The sector's originators, Hooper's Hooch and Two Dogs, are still the leading brands, but there has been a rush of new launches, with the number of brands available approaching 100.

With strong demand and extensive media coverage there has, thus far, been no great need for investment in extensive advertising support. Promotion of the drinks is being subjected to severe restrictions to prevent appealing to under-age drinkers.

On licences have a high proportion of sales as the market is new and appeals mainly to younger drinkers.