PETpla.net Insider 07+08 / 2012

REGIONAL MARKET REPORTS 14 PET planet insider Vol. 13 No. 07+08/12 www.petpla.net 60 50 40 30 20 0 2005 2006 2007 2008 2009 2010 2011* Soft Drinks (Per capita consumption) Volume growth in l * Forecast 20.6 28.3 33.6 38.7 44.2 50.3* 24.2 +18.7% +15.1% +14.2% +13.8% +17.5% +16.9% litres Development of per-capita-consumption in litres from 2005 to 2011 (Source Canadean) Consumption has more than doubled in the period under consideration, but is still very much below interna- tional standards – compared with:  Mexico 361 litres per capita  USA 335 litres per capita  Japan 175 litres per capita Japan as the neighbouring Far Eastern state is consid- ered as the benchmark for China. Soft Drinks - Packaging Mix Soft drinks packaging sales in China reached 137 bn units in 2011. 81% in PET 4% in carton 9% in cans 6% in glass Packaging mix 2011 (Source Canadean) PET continues to take share from other pack types mainly due to growth in packaged water, RTD teas and still drinks. Since PET will remain the most important packaging type for soft drinks, new regulations by the Chinese Government in terms of recycling and reprocessing are pending. Carton still maintains a significant presence in juice, nectar and still drinks. Cans mainly in carbonates. Soft drinks - key players - leading soft drink trademark owners Ting Hsin International 22% Coca Cola Company 17% Hangzhou Wahaha Group 9% PepsiCo 8% Uni-President 5% How will the soft drink sector continue…? According to “Worldpress”: “The outlook for the soft drinks industry in 2011 and 2015 is that it will maintain a 12% - 15% annual growth rate. The overall size of the indus- try will continue to expand. The industry focuses on develop- ing fruit and juice drinks, protein drinks and tea drinks. Bot- tled water will continue to show an upward trend, whereas production of carbonated beverages will gradually fall.” The four major categories We shall be looking only at the beverages that are pre- dominantly bottled in PET bottles and which are of signifi- cance for the PET industries. These beverages are:  Carbonated soft drinks  Packaged water  Juice, nectar, still drinks  RTD tea drinks. The Soft drinks sector has a chequered history as far as China is concerned: 1979 to 1995 : The first stage of beverage market was dom- inated by carbonated beverages like Coca Cola and Pepsi. 1996 to 2000: The second stage was marked by the tri- umph of bottled water from Master Kong, Wahaha, Nongfu and Robust. 2001 onwards: The third stage featured the rise of Master Kong’s tea beverage. 2002 onwards : The fourth stage: fruit juices – Uni-Presi- dent gained popularity. In 2012 the four major soft drink categories – bottled in PET containers – are obviously at different stages of their commercial life cycle. Juice, nectar and still drinks are at the high growth stage, as is ready to drink tea: bottled water is hovering between the growth and mature stage, while carbonates have already reached the mature stage. Beverage life cycles in principle are significantly reduced as consumer tastes change. We shall be ignoring those beverages that, although they are also produced and consumed in large quantities in China, are today bottled predominantly in glass (e.g. beer) or in polycarbonates (e.g. bulk/HOD Water) and this is likely to be the case in the future as well. (And which con- sequently do not generate high sales figures as far as the PET industries are concerned). Packaged water 25 20 15 10 5 0 2007 2008 2009 2010 2011* Volume growth in bn l * Forecast 11.5 14.5 17.1 20.0 23.0* +26.0% +17.9% +17.0% +15.0% bn litres Volume growth in bn litres from 2005 to 2011(Source Canadean) Per capita consumption 2011*:16.9l