Turkey: The Engine of European Juice Growth
Turkey has been a bright spot of the retail juice market in Western Europe, partially offsetting a negative volume performance for the continent as a whole since 2008. Over the next five years, Turkey is expected to continue to be the focal point of juice volume growth in Europe, with innovation primarily emerging from nectars (Turkey is Europe’s second largest nectar market, after Germany) and juice drinks. While refreshing, flavourful juice drinks are driving volume, the category could still benefit from greater investment in higher value, wellness positioned juices that appeal to Turkey’s younger, health-conscious consumers.
Source: Euromonitor International
A Young Market
A core advantage enjoyed by Turkish juice brands (and the Turkish CPG market more generally) is a youthful population; a demographic fact that stands in stark contrast to the more affluent nations in Western Europe. Half the population of Turkey is under the age of 30, compared to just a third of the aggregated EU population.
Source: Euromonitor International
A higher population of young families, children and teenagers offers considerable opportunities for juice brands in family households, particularly during the breakfast meal occasion, with packaged juices presenting an attractive blend of taste and nutrition for parents. As a youthful population matures and grows more affluent, this segment of the population also represents a wider mix of marketing channels through which to reach consumers and build lasting packaged juice brands.
One company already succeeding with the young Turkish consumer demographic is Coca-Cola Icecek, Coca-Cola’s leading independent bottler in Turkey, Central Asia and parts of the Middle East. Coca-Cola Icecek reported low single digit growth in the fruit juice and nectars category in 2013. The company enjoy a leadership position in the Turkish juice category with its ‘Cappy’ brand juices, controlling 18% of total juice volumes in 2013.
In addition to the marketing muscle of Coca-Cola, the Cappy brand has several factors contributing to its success. Crucially, Cappy offers a diverse portfolio of juices in all tiers of the juice market: from low juice content, ambient refreshment fruit drinks, mid-priced family portioned nectars to more expensive 100% juices. Neither has the Cappy brand been afraid to innovate: in 2013, the company successfully introduced Cappy Atom – a nectar blend of fruits and honey. This product and high profile television advertising campaign specifically targeted urban, young professionals in its messaging. The company positioned Cappy Atom as a refreshing, impulse beverage for on-the-go consumers, emphasizing the functional, energy boosting properties of the Atom fruit blend.
Prospects for Future Growth
The Turkish juice category is not without its challenges. A long winter and a hot summer in 2012 contributed to a poor fruit harvest, triggering a 4% contraction in retail volume sales and a double digit spike in unit prices. This particularly impacted the cherry harvest, a fruit flavour (along with peach) which is particularly popular in Turkish nectar blends. Yet with per capita juice consumption still roughly half the Western European average, there is considerable room for the market to continue growing. How can manufacturers convert the growing Turkish appetite for juice into profitable value sales?
Turkey is a market ripe for health and wellness led innovation in the juice category, developments which can drive value (as well as volume) in the burgeoning packaged juice segment. Food safety, sourcing and nutritional content are increasingly important purchase drivers for Turkish consumers, particularly parents, who seek to use fresh juices as a natural source of vitamins and nutrients. The strong Turkish demand for relatively high priced nectars (between 25-99% juice content) indicates the value potential in Turkish juices and the consumer premium placed on freshness and quality. What is the next step?
Naturally healthy ‘superfruit’ 100% juice is expected to demonstrate positive value growth over the forecast period. An increasing number of health-conscious consumers are looking for healthy beverages that provide health benefits and hence choose superfruit 100% juices for their exceptional nutrient richness and superior antioxidant qualities. These products – which carry much higher unit price points – can be a driver of long term value growth in the Turkish juice industry.
This is not simply a packaged beverage phenomenon. Turkey is a great producer of fresh fruits and vegetables, which means that juice sales are also challenged by the presence of fresh alternatives. Turkey is expected to be the home of some of the strongest expected volume growth, in percentage terms, for juice extractors. While the availability of fresh fruits or unpackaged juices may limit the potential for high priced 100% juices, the high market penetration for relatively high priced nectars indicates a consumer tolerance for branded, healthy packaged juices that can justify price with freshness, nutrition and quality. A younger, healthier generation seems likely to sustain Turkey’s position as Europe’s most promising market for juice growth.