Description
Before analysing the latest trends in the South African cold beverage market, it would be prudent to first look at the current pressures that confront the South African consumer, which may in turn affect their purchase of cold beverages.
COLD BEVERAGES
By Hippo Zourides
Before analysing the latest trends
in the South African cold beverage
market, it would be prudent to
first look at the current pressures
that confront the South African
consumer, which may in turn affect
their purchase of cold beverages.
The defined
cold beverage market
Consumer confidence levels
The Nielsen Global
Consumer Confidence
survey indicated that after three quarters
of positive growth last year (based on an
index of 100, the readings had ranged from
78 to a high of 86), the index had dropped
to 82 in the first quarter of 2014. 76%
of respondents were of the opinion that
the country is in a recession now and up
to 60% did not believe that the economy
would be any better in the next 12 months.
Inflation
According to Stats SA, the CPI (consumer
price index) inflation rate was level at 6%
(it has since grown to 6,6%), while the
various cold beverages had various inflation
rates, as indicated:
Food overall.............................. 7,2%
Dairy products......................... 7,2%
Alcoholic beverages............... 5,8%
Non-alcoholic beverages .... 4,4%
It is evident that the beverage industry has
fought hard to keep its price increases to a
minimum as it cannot pass the additional
costs onto the consumer. A.C Nielsen’s
Shopper Trends survey also found that 98%
of consumers surveyed perceive that prices
are rising and the reality is that prices on
FMCG has risen by approximately 60%
over the last four years.
Consumer coping mechanisms
The great majority of households (83%)
took some action to save on household
expenses such as:
10
SUPERMARKET & RETAILER, AUGUST 2014
By analysing these spending trends, it is
obvious that the effect is being felt by the
‘eat out’ industry and that private label
products are the highest beneficiaries in a
store environment.
So where do beverages fit
in this tough environment?
The picture is mixed, but it shows
interesting trends that should affect the
way you merchandise your products,
especially in terms of shelf space allocation.
Here are some examples:
Categories that are growing in terms
of value sales include energy drinks
(+13,8%), carbonated soft drinks (+8,2%),
bottled water (+5,2%) and liquor (+4,1%).
However, some categories have seen their
sales decrease, namely fruit juices (-2,9%).
Liquor did sell less volume but the value
sales were positive due to inflated prices
and the move by some manufacturers of
targeting the premium market.
Where is the growth
coming from?
The bottom chart overleaf indicates the
volume growth of all beverages that
compete for a ‘share of throat’ and all
players in this market consider any liquid
beverage to be a competitor.
Do you own a liquor store?
Many grocery stores are now involved in
the liquor trade and one is always looking
at the space allocations between different
categories as a tool to merchandise better.
The top chart overleaf indicates the
discrepancies between volume and value
sales and should be a good tool to assist
the reader in allocating the correct amount
of space in their store.
?
Cutting down on take-away
meals........................................................... 73%
Cutting back on electricity & gas..... 63%
Spending less on new clothes............ 61%
Switching to cheaper brands.............. 60%
Buying only essentials/
cut back on luxuries............................... 55%
Actively looking out for specials....... 27%
Saving by buying in bulk...................... 25%
Trends, opportunities
and alternative strategies
Imperial
is giving
Red Bull
wings
Imperial’s team driving the upgrade of Red Bull’s supply chain are, from left: Charmaine Smith, General
Manager Customer Services; Friedel Spies, Operations Director; Hester Fourie, Customer Services
Executive; Molebatsi Mtakane, Key Account Manager; and David Oates, Commercial Manager.
As Red Bulls’ logistics partner since January 2010,
Imperial Retail Logistics has been helping the producer
of the world’s most popular energy drink to define and
upgrade its supply chain network capacity, to enable
future growth strategies.
With more than 35 years’ experience in providing warehousing and
distribution services to various customers in the South African FMCG
sector, Imperial Retail Logistics is perfectly positioned to undertake
this journey with Red Bull, comments operations director Friedel
Spies. The scope of Imperial’s contract encompasses warehousing,
primary and secondary distribution services on a national basis,
he explains. The company is taking Red Bull to both formal retail and
wholesale stores across South Africa and into Swaziland and Lesotho,
with more than 14 000 product loads delivered annually.
“Imperial acts as a single point of contact, with full operational
accountability, as we manage Red Bull’s national distribution network
in South Africa, where routes to market include retail, supermarkets,
cash and carry, as well as wholesalers,” Spies adds.
Why Red Bull opted for Imperial
Outlining Red Bull’s motivation for partnering with Imperial,
Deon Brummer, operations manager at Red Bull South Africa, says:
“We needed a world-class 3PL service provider who could further
enhance and support our strategic objectives to enable future brand
development and growth, specifically with regards to technology
integration to increase visibility throughout the distribution and
warehousing process.”
Imperial more-than fits the bill
In Imperial Retail Logistics, Red Bull found a logistics partner that
exceeded its expectations. A business model and management
structure that allows the company to leverage its existing
infrastructure, with expansion, enables Imperial Retail Logistics
to offer a cost effective solution in the regional areas, which
are traditionally “expensive” to service, Spies explains. “We have
developed very close relationships with preferred agents and
sub-contractors in Polokwane, Mpumalanga and the Cape provinces.
This management structure means that Imperial Retail Logistics cannot
be classified as a classic 3PL organization, since we have adopted an
LLP (Lead Logistics Provider) management structure that enables us
to deliver product to over 10 000 customers nationally.”
Red Bull’s long-term strategy incorporates state-of-the-art
technologies that are routinely employed by Imperial, and which
place the company at the leading edge of technology. These
technologies were also among the factors that led Red Bull
to partner with us, Spies states.
World-class warehouse management system
Imperial Retail Logistics’ technical ability is reflected in the worldclass warehouse management system developed to interface with
Red Bull’s enterprise resource planning software, SAP. It provides
real time visibility and its functionality includes the management
of materials handling and inventory control from receipt to delivery.
Further benefits that this system is yielding for Red Bull include real
time visibility of inventory at all stages within the operation, as well
as workload management of resources, in order to meet deadlines.
It is also ensuring the optimum use of operations staff. The use of
an internationally recognised warehouse management system is
crucial to ensure that Red Bull has the highest level of batch integrity
and inventory and order accuracy, Spies stresses.
Both ambient and temperature controlled warehousing and
distribution is being provided by Imperial for Red Bull, while value
added services include customer services, inventory forecasting
and replenishment, as well as various support functions offered
via Imperial’s extensive IT resource network.
Through Imperial’s Enterprise Resource Planning (ERP) system,
Red Bull has access to a variety of reports for management reporting
purposes. This system enables an accurate view of inventory, batch
integrity and order status.
Planning, controlling and
managing transport operations
Imperial Retail Logistics’ has also implemented a world-class
transport management system for Red Bull, and this provides
information on expected time of arrivals and timely proof
of deliveries. “One of the key focus areas for Red Bull was the
implementation and roll-out of a comprehensive routing and
scheduling methodology,” says Spies. “Our transport management
system was implemented to plan, control and manage transportation
operations in order to improve our service commitment to our clients
at an optimal cost. The benefits of this system include reduced vehicles
through optimised routing, which results in a fixed cost reduction;
reduced kilometres travelled; improved customer service; and reduced
returns.”
The renewal of its contract with Red Bull for a further three years
is a testament to Imperial’s capability, capacity, experience and
suitability to provide Red Bull with a competitive and sustainable
logistics service. “Our total solution incorporates all of the services
offered by a Lead Logistics Provider,” Spies concludes.
Category
?
Looking
for a cold
room?
COLD BEVERAGES
Volume Growth Value Growth
(share)
(share)
Spirits
3,7%
-2,6%
25,2%
+5,2%
Wine
9,2%
-3,3%
12,8%
+4,0%
Flavoured
alcoholic
beverages
13,5% +0,4%
15,2% +6,3%
Beer
73,5%
-3,9%
Some further trends
The traditional beverage industry,
which has covered areas such as beer
and carbonated soft drinks, has been
conservative with their advertising spend,
while the liquor trade and the new
beverage trends such as bottled water
and flavoured alcoholic drinks are investing
in marketing their brands.
The figures below do not include the
coverage of beverages attributed to the
various chains in their weekly advertising.
? In the liquor trade, 440/450ml cans have
had the biggest growth in sales (+60%),
while the 330/340ml cans only grew
by +4%
? Flavoured carbonated soft drinks
have grown by 10% in the last five
years, showing a swing away from the
conventional colas.
What does the future hold?
Ailsa Wingfield, Executive Director,
Marketing and Communication for Africa
and the Middle East for A. C. Nielsen
summarises the future trends as follows:
Carbonated soft drinks....................... -23%
? Fire
retardant
? Injected Polyurethane –
does not absorb water
? Available in different thicknesses
? Cold and freezer rooms
? Easy to assemble – Speedy
installation saves time and money
? We manufacture and deliver
at short notice
Energy drinks.......................................... + 4%
? Consumer confidence will slowly
improve once again
Flavoured alcoholic drinks............... +11%
Whiskey ................................................ +44%
? There will be more innovation and
imports, especially in the liquor trade
Bottled water .................................... +200%
Alcoholic beverages spent as much as R1,7
billion which was 1% below last year’s
spend, and non-alcoholic beverages spent
R440 million, a reduction of 8% compared
with the same period last year.
? Growth in the right premium offerings
i.e., Craft beers and liquor
? Ready-to-drink ‘value’ cans will gain
further traction
? Grocery stores will capture more spend
with a significant trend in liquor sales
Is more money being spent directly with
the retail trade? Ask your supplier for your
share!
? Promotional competitiveness will heat up
ANNUAL VOLUME GROWTH
Sports & energy drinks
13.8
Long life milks
9.1
CSD’s
8.2
Ice tea
7.0
Squashes & cordials
5.6
Mineral/bottled water
5.2
Coffee creamers
4.3
Powder beverages
3.9
Milk modifiers
3.6
Yoghurt
3.4
Flavoured milk
1.5
Tea
011-462 2130
Fax 011-462 2621
Call
E-mail: [email protected]
www.insulatedstructures.co.za
+2,8%
Advertising support
Beer .......................................................... -13%
Check the
Insulated Structures
difference
46,8%
-0.2
Total coffee
-1.8
Infant milk
-2.0
Powdered milk
-2.9
Fruit juice: short life
Fruit juice: long life
Fresh milk
-2.9
-5.2
-5.7
12
SUPERMARKET & RETAILER, AUGUST 2014
C
M
Y
CM
MY
CY CMY
Industry
trends
Supermarket & Retailer brings
you a compiled a shortlist of the
various categories that make up
cold beverages, indicating certain
trends from a year ago and having
a peek at the possible future
scenario.
Ready-to-drink (RTD)
Fruit Juices
The size of the market
increased over the last
year due to the arrival of
new players, an increased
emphasis on private label
products, new pack sizes,
more affordable pack sizes
and strategic promotional
activity.
Trends indicate that the
consumer is moving from
premium products with high value per
rand per litre to cheaper options. Smaller
packs and family-sized savings pack have
also shown an increase in sales. Suppliers
are focusing on underserviced areas and
have seen very good volume increases in
areas such as the Free State, Mpumalanga,
North-West and Limpopo provinces.
However, the major urban centres still
account for 73% of the total volume sold
in the country. Top end retail is still the
favourite place to find RTD fruit juices and
the export market now accounts for 10%
of all sales.
Iced tea
Volumes are down but the value sales have
increased. Some new entrants into this
market will be assisting in the potential
increase of volumes and it is apparent that
there is a rise on the weighted average
price in this category. However, increased
competition could have the opposite effect
by dropping the average price per litre
and apparently there are more suppliers
entering this market.
The supply chain will be also looking at
the underserviced areas to increase the
availability of the product ranges. Here are
some patterns of growth or retreat :
Wholesale trade
...................... 27% market share (growing)
Superbly designed,
Bottom end retail............... 12% (growing)
top quality
Top end retail........................... 37% (static)
cold room and freezer doors offer
On site consumption.......15% (declining)
numerous options uniquely designed for
Garage forecourts..............10% (declining)
convenience stores, supermarkets, wholesalers
Bottled water
This category is divided
into plain waters, sparkling
waters (the inclusion of
CO2 gas), flavoured waters
(infused with flavours and
invariably with sugar) and
functional waters (infused
with herbs, vitamins,
minerals and raw fruit and
vegetables).
Volume and value sales are generally up,
especially with plain water, but the average
price per litre is dropping due to aggressive
competition, new entrants into the market
and heavy promotional activity. However,
the swing to a healthier lifestyle by the
affluent and middle class population will
ensure that this category continues to
grow. The negatives are the increases
in input costs and the depressed status
of consumer spending patterns.
and various customised applications.
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?
Volumes have increased
in this category due to
some very innovative
promotional campaigns,
the export trade, new
product launches and,
once again, a focus on
the smaller provinces.
Smaller pack sizes is where the sales come
from and it is estimated that the depressed
consumer spending patterns will keep this
market static for the foreseeable future.
Sports drinks
13
SUPERMARKET & RETAILER, AUGUST 2014
00232_I.S._3PROD_LUNACOMMS
According
to BMi
research:
K
?
COLD BEVERAGES
Although from a low base, the sale of
glass containers has shown some increase
but plastic bottles are still the main seller.
The lower value of the Rand has assisted
with the export business and Botswana
now subscribes to the South African Bottled
Water Standards, which makes export to
that country easier.
The distribution patterns of bottle water
are as follows:
Dilutables
Bottom end retail................................... 15%
This segment needs some definition as it
contains a plethora of products and their
respective qualities.
‘Bases’ are super concentrated cordials to
which the consumer adds sugar, ‘Cordials’
are concentrated fruit juices with less than
6% of the reconstituted fruit and can be
sweetened by flavours artificially. ‘Dairy
juice blends’ are flavoured milks with
fruit flavours to be drunk both ambient
and chilled. ‘Fruit juice concentrates’ have
anything between 20% and 50% fruit
juice content and are normally diluted
on a 1:4 basis. ‘Iced teas’ are dilutable
concentrated teas. ‘Sports drinks’ are drinks
with nutrients and electrolytes to replace
the loss of body fluids and to sustain
performance. It is important to note that
in this subcategory, we are referring to the
concentrates only and not to the RTDs.
‘Squashes’ are concentrated fruit beverages
with at least 6% of its reconstituted fruit
form.
As can be seen from the above, it is
important that, when merchandising this
category, these definitions are taken into
account when laying out your shelves.
Both volume and value sales have
increased over the last year as new players
and new products entered the market
and the consumer support of dilutables is
evident as they move away from spending
on premium priced products. Top end retail
is still the favourite purchase point for this
category (60%) while the convenience
areas of garage forecourts and bottom
end retail account for about 30% of the
market. Irrespective of the huge variety
available in this category, most of the sales
are accounted for by cordials and squashes
(43%) and dairy blend juices (44%). The
Eastern Cape was the single province that
showed significant sales increases over the
last year while the rest of the country has
lagged behind in percentage terms.
On consumption..................................... 10%
Carbonated Soft Drinks (CSDs)
Top end retail........................................... 45%
Bottom end retail................................... 18%
Garage forecourts................................... 12%
Wholesale.................................................. 13%
Three major urban metros.................. 72%
Energy drinks
These are defined as drinks with a high
level of caffeine that give one an adrenaline
rush.
This is one category that has grown
by double digit figures as the entry of
new players is continuous, the sale of the
product does not appear to be affected
by other beverages and both local and
imported brands are available for sale.
Although some variants are available
in glass or PET, the dominant packaging
is the metal can and there has been a
pronounced shift from the 440ml to the
500ml can.
BMi’s research indicates that both local
sales and exports will keep growing above
average and it is estimated that this market
may be worth three times its current
value by 2018. Distribution patterns are
as follows:
Garage forecourts....................................32%
Top end retail........................................... 30%
Wholesale.................................................. 15%
Gauteng accounts for 51% of all sales,
followed by Kwa-Zulu Natal with 18% and
the balance is split amongst the rest of
South Africa.
14
SUPERMARKET & RETAILER, AUGUST 2014
Both value and volume are up this year
due to regular promotional activity, very
competitive pricing and some new product
launches. Exports are down in value terms.
Due to depressed consumer spending
patterns, suppliers in this category
are focusing on underserviced areas.
Opportunities exist for retailers to sell
more of the second tier CSDs where the
price and margin levels are more enticing
for both retailer and consumer.
Here are some distribution statistics:
Top end retail............................................36%
Wholesale...................................................28%
Bottom end retail....................................18%
On consumption....................................... 9%
Cola flavour................................................46%
Other flavours...........................................54%
Beer
The most significant trend in
beer is the emergence of craft
beers, albeit from a small base.
Off consumption beer
accounts for 67% of sales and
shows an increasing trend,
while on consumption sales
with 33% are declining in
importance.
In Gauteng, which accounts
for 31% of all beer sales in the
country, the increase in the
petrol price and the arrival of e-tolls has
had a marked effect on the sale of beer
and this province’s market share is showing
a declining trend. Market share gains
have gone to provinces such as Limpopo,
Mpumalanga and North-West. Major
brands still hold a huge share of the market
and the barriers to entry for new brands
are prohibitive.
Sorghum beer
This very specialised
beverage, which is
available in both ‘wet’
and ‘dry’ forms, has seen
better days. The shortage
of sorghum crops is
affecting the volume sales
negatively and this has
been compounded by the
labour unrest in the mining belt and
competition from new ‘wet’ products.
A new emerging trend is a 20 litre
bucket which is more economical for the
consumer.
Most of the sales of this category are
concentrated in KZN at 32% and the
wholesale sector dominates with 90% of
the sales. Other than having some ‘dry’
packets on your shelf (provided there is
demand for it) this is not a recommended
category for supermarket operators.
Beautiful
Simple
Profitable
Flavoured Alcoholic
Beverages (FABs)
Although both value and volume sales
are on the up, this category has been
very inconsistent in the past. The market
continues to launch new variants, and
new flavour extensions, which keeps the
category fresh and new but it is not yet
properly established. Many new products
should be released in future.
The rand/dollar exchange rate is having
an effect on the price per litre as both
inflation and the input costs are rising.
Consumption in bars and restaurants
are the dominant sales areas with 66% of
all sales and Gauteng (once again more
affluent and with a clubbing culture)
accounts for 36% of the market. The
lower end of the market is starting to
experiment but the sales are not yet
substantial.
Carbonated soft drinks (CSDs) are a major
category for retailers and are dominated by
the premium brands. However, continuous
price promotions have turned these brands
into commodities yielding a very low gross
profit. The good news is that there are
alternatives available to the retailer.
Estimates of the size of the carbonated
soft drink market vary wildly depending on
whether one specifies
the defined retail
sector as measured
by some research
companies or
whether one includes
the total market,
which covers the
formal and informal
markets.
Various estimates indicate that premium
equity brands (Coke and Pepsi) may control
as much as 85% of the total market, but
there are two other categories that are
growing exponentially and astute retailers
?
Well, there you
have it. Analyse
the shelf space
allocation of
the various
sub-categories
and see
whether you
are giving it
the correct
exposure in
your store.
If you also own or manage a bottle store,
there are many opportunities in this
environment.
An
alternative
strategy
for
retailers
15
SUPERMARKET & RETAILER, AUGUST 2014
Tel: 021 851 8070
[email protected]
www.purelifestyle.co.za
?
COLD BEVERAGES
should pay attention to
this segment. We refer
to the quality economic
brands (Refreshhh,
CooEee, Jive and some
confined house brands)
which are estimated to
own 10% of the total
market and the remainder 5% is attributed
to entry-level economic brands, which
include CSDs with sweeteners and the
balance of the house brand market.
The main attraction of the middle layer
for retailers includes:
? The wide availability of brands and
flavours
? A lower cost price
? A more competitive selling price
? A better margin generated
? Only PETs are available, doing away
with the need for glass deposits
According to A. C. Nielsen, the flavoured
CSDs have grown in volume by an average
of 10% per annum over the last five years.
Many retail chains have developed their
own confined labels (i.e. exclusive labels
that can only be found on their premises),
such as Soda T (Masscash), California and
Plant (Shoprite) and Chill (Choppies).
All of the above reasons are cited for the
development of such confined labels.
However, independent retailers who
cannot access such confined labels have
the choice of talking to a number of
suppliers in the quality economic brand
ranges to achieve the same objective.
Wholesalers who have been traditional
distributors of such labels are currently
adapting their distribution model by
becoming distributors and medium to
small sized enterprises, who lack transport
facilities and have time restrictions, can
look to back-door deliveries of their
favourite brand at very competitive prices.
“This alternative to premium brands
has been there for a long time,” says
Darren Allaway, national trade marketing
and distribution director of Little Green
Beverages, who manufacture the Refreshhh
brand. “Lately, this sub-category of CSDs
has grabbed the interest of the retail trade
and all suppliers have learnt to trade in the
various sectors ranging from chains such
as Spar or Choppies to small independents
and the wholesale trade. The annual growth
is amazing,” says Darren.
16
SUPERMARKET & RETAILER, AUGUST 2014
Confronting the myths
that plague PET water bottles
The Natural Hydration Council (NHC), a United Kingdom, not for profit
organisation dedicated to researching the science and communicating the
facts about healthy hydration has produced a PET Plastic Water Bottles
fact sheet to help address some of the myths around bottled water.
This coincides with the formation of its
Technical Working Group, which will
address technical and regulatory issues that
affect bottled water producers in the UK.
The group will also support the NHC
Communications Group’s activities by
ensuring the facts related to the quality of
naturally sourced waters are communicated
effectively. It will work closely with key
stakeholders in the UK, as well as in Europe
through its membership of European
Federation of Bottled Waters.
Locally, a similar function is played by
the South African National Bottled Water
Association. It was formed in 1997 as
a standards setting and representative
body for the industry and is a voluntary
association of bottlers whose primary
concern is the health, safety and pleasure
of their consumers. They, therefore,
willingly conform to the extremely
stringent safety and quality measures
contained in the SANBWA Guidelines and
Standards, although the cost to them of
such compliance is considerable. SANBWA’s
environmental vision is to improve
members’ environmental stewardship by:
? Water: ensuring effective water
management – cradle to grave. This
will include requirements for source
protection, efficient water usage and
responsible effluent practices.
? Solid waste: reduce, re-use, recycle
? Energy: promotion of efficiency
? Post-consumer recycling: Supporting
current initiatives
It too has produced a list of facts to
counter the urban legends that plague PET.
Is PET a safe packaging option?
Yes. The inert PET bottle is a wellaccepted package all over the world and
is completely safe to drink from. It is also
lightweight, unbreakable, and recyclable.
It can be identified by a small number ‘1’
on the bottom of a container. This is often
displayed inside a triangular mobius or a
three-arrow recycling symbol. Alternatively,
the letters ‘PET’ will be stamped into the
bottle.
Does PET contain dioxins?
No, there is no dioxin in PET plastic. Dioxin,
a chlorine-containing chemical that has no
role or presence in the chemistry of PET, is
formed by volcanoes (!) and combustion in
incinerators at temperatures above 1 700º
Farenheit.
Does PET contain BPA?
No, Bisphenol A (BPA) is not used to make
PET, nor is it used to make any of the
component materials used to make PET.
Does PET contain DEHA?
No, DEHA is not present in PET either
as a raw material or as a decomposition
product. DEHA is also not classified as a
human carcinogen and is not considered to
pose any significant health risk to humans.
It can be found in water – bottled or tap
water – and is then called DOA. DOA is one
of the organic containments commonly
found at trace levels in just about all
drinking water. It is also sometimes –
wrongly – interpreted as di-ethyl hydroxyl
amine which is not found in PET or in the
production of PET bottles.
Does PET contain
endocrine disruptors?
No, there are no substances known that
can migrate from PET that could be
responsible for the endocrine disruptors
(substances having a hormonal effect)
identified in a study commonly referred to
as the ‘Goethe Study’.
Does PET contain
antimony oxide?
Yes, PET does contain antimony oxide,
which is used as a catalyst. However, the
amounts are well below the established
safe limits for food and water set by the
World Health Organisation. For example,
a 60kg person would be able to tolerate
an intake of 360ug but the guideline for
drinking water is 15 – 20ug/l.
Is it safe to freeze
a PET bottle, or keep it
in a hot car?
Yes, of course. The idea that PET bottles
‘leach’ chemicals when frozen or heated in
hot cars is not based on any science, and is
unsubstantiated by any credible evidence.
Can I reuse a PET bottle?
Yes, like other food or beverage containers,
PET bottles can be re-used if you take
steps to prevent the growth of bacteria.
These bacteria thrive in warm, moist
environments; that is, in virtually any
beverage container under the right
conditions. Wash all your containers, not
just PET bottles, with hot soapy water and
dry thoroughly between each use. Further,
when looking for a bottle for long term
use, pay attention to the design of it and
its closure. Make certain you can easily get
into all ‘nooks and crannies’ in order to
be able to clean it properly.
Are PET bottles
recyclable?
Most definitely
yes, and simply
recycling the
PET bottle reduces
its carbon footprint
by some 25%.
“One of the
peculiarities of
consumer behaviour
is that they are quite happy to consume
many foodstuffs and other beverages
– yoghurt, milk, fruit juice, for example –
that are packed in plastic but are easily
influenced by one of the main arguments
used against bottled water, that is that the
bottles themselves pose a danger to human
health. Nothing could be further from
the truth,” said SANBWA CEO, Charlotte
Metcalf.
“SANBWA is committed to responsible
environmental stewardship, and members
are required to comply with the
association’s environmental vision. This
includes many measures to ensure source
sustainability and protection, water usage
minimisation, energy efficiency, solid
waste minimisation, and supporting postconsumer recycling initiatives.
“And no, the bottled water industry
doesn’t have a large water footprint.
By comparison, to produce 1 kg of maize
requires 900 litres of water, one cup of
coffee needs 140 litres of water and
to produce 1 sheet of A4 paper requires
10 litres of water. Bottled water’s is
1.8 litres,” she said.
Acknowledgement: South African National Bottled
Water Association
17
SUPERMARKET & RETAILER, AUGUST 2014
doc_509313975.pdf
Before analysing the latest trends in the South African cold beverage market, it would be prudent to first look at the current pressures that confront the South African consumer, which may in turn affect their purchase of cold beverages.
COLD BEVERAGES
By Hippo Zourides
Before analysing the latest trends
in the South African cold beverage
market, it would be prudent to
first look at the current pressures
that confront the South African
consumer, which may in turn affect
their purchase of cold beverages.
The defined
cold beverage market
Consumer confidence levels
The Nielsen Global
Consumer Confidence
survey indicated that after three quarters
of positive growth last year (based on an
index of 100, the readings had ranged from
78 to a high of 86), the index had dropped
to 82 in the first quarter of 2014. 76%
of respondents were of the opinion that
the country is in a recession now and up
to 60% did not believe that the economy
would be any better in the next 12 months.
Inflation
According to Stats SA, the CPI (consumer
price index) inflation rate was level at 6%
(it has since grown to 6,6%), while the
various cold beverages had various inflation
rates, as indicated:
Food overall.............................. 7,2%
Dairy products......................... 7,2%
Alcoholic beverages............... 5,8%
Non-alcoholic beverages .... 4,4%
It is evident that the beverage industry has
fought hard to keep its price increases to a
minimum as it cannot pass the additional
costs onto the consumer. A.C Nielsen’s
Shopper Trends survey also found that 98%
of consumers surveyed perceive that prices
are rising and the reality is that prices on
FMCG has risen by approximately 60%
over the last four years.
Consumer coping mechanisms
The great majority of households (83%)
took some action to save on household
expenses such as:
10
SUPERMARKET & RETAILER, AUGUST 2014
By analysing these spending trends, it is
obvious that the effect is being felt by the
‘eat out’ industry and that private label
products are the highest beneficiaries in a
store environment.
So where do beverages fit
in this tough environment?
The picture is mixed, but it shows
interesting trends that should affect the
way you merchandise your products,
especially in terms of shelf space allocation.
Here are some examples:
Categories that are growing in terms
of value sales include energy drinks
(+13,8%), carbonated soft drinks (+8,2%),
bottled water (+5,2%) and liquor (+4,1%).
However, some categories have seen their
sales decrease, namely fruit juices (-2,9%).
Liquor did sell less volume but the value
sales were positive due to inflated prices
and the move by some manufacturers of
targeting the premium market.
Where is the growth
coming from?
The bottom chart overleaf indicates the
volume growth of all beverages that
compete for a ‘share of throat’ and all
players in this market consider any liquid
beverage to be a competitor.
Do you own a liquor store?
Many grocery stores are now involved in
the liquor trade and one is always looking
at the space allocations between different
categories as a tool to merchandise better.
The top chart overleaf indicates the
discrepancies between volume and value
sales and should be a good tool to assist
the reader in allocating the correct amount
of space in their store.
?
Cutting down on take-away
meals........................................................... 73%
Cutting back on electricity & gas..... 63%
Spending less on new clothes............ 61%
Switching to cheaper brands.............. 60%
Buying only essentials/
cut back on luxuries............................... 55%
Actively looking out for specials....... 27%
Saving by buying in bulk...................... 25%
Trends, opportunities
and alternative strategies
Imperial
is giving
Red Bull
wings
Imperial’s team driving the upgrade of Red Bull’s supply chain are, from left: Charmaine Smith, General
Manager Customer Services; Friedel Spies, Operations Director; Hester Fourie, Customer Services
Executive; Molebatsi Mtakane, Key Account Manager; and David Oates, Commercial Manager.
As Red Bulls’ logistics partner since January 2010,
Imperial Retail Logistics has been helping the producer
of the world’s most popular energy drink to define and
upgrade its supply chain network capacity, to enable
future growth strategies.
With more than 35 years’ experience in providing warehousing and
distribution services to various customers in the South African FMCG
sector, Imperial Retail Logistics is perfectly positioned to undertake
this journey with Red Bull, comments operations director Friedel
Spies. The scope of Imperial’s contract encompasses warehousing,
primary and secondary distribution services on a national basis,
he explains. The company is taking Red Bull to both formal retail and
wholesale stores across South Africa and into Swaziland and Lesotho,
with more than 14 000 product loads delivered annually.
“Imperial acts as a single point of contact, with full operational
accountability, as we manage Red Bull’s national distribution network
in South Africa, where routes to market include retail, supermarkets,
cash and carry, as well as wholesalers,” Spies adds.
Why Red Bull opted for Imperial
Outlining Red Bull’s motivation for partnering with Imperial,
Deon Brummer, operations manager at Red Bull South Africa, says:
“We needed a world-class 3PL service provider who could further
enhance and support our strategic objectives to enable future brand
development and growth, specifically with regards to technology
integration to increase visibility throughout the distribution and
warehousing process.”
Imperial more-than fits the bill
In Imperial Retail Logistics, Red Bull found a logistics partner that
exceeded its expectations. A business model and management
structure that allows the company to leverage its existing
infrastructure, with expansion, enables Imperial Retail Logistics
to offer a cost effective solution in the regional areas, which
are traditionally “expensive” to service, Spies explains. “We have
developed very close relationships with preferred agents and
sub-contractors in Polokwane, Mpumalanga and the Cape provinces.
This management structure means that Imperial Retail Logistics cannot
be classified as a classic 3PL organization, since we have adopted an
LLP (Lead Logistics Provider) management structure that enables us
to deliver product to over 10 000 customers nationally.”
Red Bull’s long-term strategy incorporates state-of-the-art
technologies that are routinely employed by Imperial, and which
place the company at the leading edge of technology. These
technologies were also among the factors that led Red Bull
to partner with us, Spies states.
World-class warehouse management system
Imperial Retail Logistics’ technical ability is reflected in the worldclass warehouse management system developed to interface with
Red Bull’s enterprise resource planning software, SAP. It provides
real time visibility and its functionality includes the management
of materials handling and inventory control from receipt to delivery.
Further benefits that this system is yielding for Red Bull include real
time visibility of inventory at all stages within the operation, as well
as workload management of resources, in order to meet deadlines.
It is also ensuring the optimum use of operations staff. The use of
an internationally recognised warehouse management system is
crucial to ensure that Red Bull has the highest level of batch integrity
and inventory and order accuracy, Spies stresses.
Both ambient and temperature controlled warehousing and
distribution is being provided by Imperial for Red Bull, while value
added services include customer services, inventory forecasting
and replenishment, as well as various support functions offered
via Imperial’s extensive IT resource network.
Through Imperial’s Enterprise Resource Planning (ERP) system,
Red Bull has access to a variety of reports for management reporting
purposes. This system enables an accurate view of inventory, batch
integrity and order status.
Planning, controlling and
managing transport operations
Imperial Retail Logistics’ has also implemented a world-class
transport management system for Red Bull, and this provides
information on expected time of arrivals and timely proof
of deliveries. “One of the key focus areas for Red Bull was the
implementation and roll-out of a comprehensive routing and
scheduling methodology,” says Spies. “Our transport management
system was implemented to plan, control and manage transportation
operations in order to improve our service commitment to our clients
at an optimal cost. The benefits of this system include reduced vehicles
through optimised routing, which results in a fixed cost reduction;
reduced kilometres travelled; improved customer service; and reduced
returns.”
The renewal of its contract with Red Bull for a further three years
is a testament to Imperial’s capability, capacity, experience and
suitability to provide Red Bull with a competitive and sustainable
logistics service. “Our total solution incorporates all of the services
offered by a Lead Logistics Provider,” Spies concludes.
Category
?
Looking
for a cold
room?
COLD BEVERAGES
Volume Growth Value Growth
(share)
(share)
Spirits
3,7%
-2,6%
25,2%
+5,2%
Wine
9,2%
-3,3%
12,8%
+4,0%
Flavoured
alcoholic
beverages
13,5% +0,4%
15,2% +6,3%
Beer
73,5%
-3,9%
Some further trends
The traditional beverage industry,
which has covered areas such as beer
and carbonated soft drinks, has been
conservative with their advertising spend,
while the liquor trade and the new
beverage trends such as bottled water
and flavoured alcoholic drinks are investing
in marketing their brands.
The figures below do not include the
coverage of beverages attributed to the
various chains in their weekly advertising.
? In the liquor trade, 440/450ml cans have
had the biggest growth in sales (+60%),
while the 330/340ml cans only grew
by +4%
? Flavoured carbonated soft drinks
have grown by 10% in the last five
years, showing a swing away from the
conventional colas.
What does the future hold?
Ailsa Wingfield, Executive Director,
Marketing and Communication for Africa
and the Middle East for A. C. Nielsen
summarises the future trends as follows:
Carbonated soft drinks....................... -23%
? Fire
retardant
? Injected Polyurethane –
does not absorb water
? Available in different thicknesses
? Cold and freezer rooms
? Easy to assemble – Speedy
installation saves time and money
? We manufacture and deliver
at short notice
Energy drinks.......................................... + 4%
? Consumer confidence will slowly
improve once again
Flavoured alcoholic drinks............... +11%
Whiskey ................................................ +44%
? There will be more innovation and
imports, especially in the liquor trade
Bottled water .................................... +200%
Alcoholic beverages spent as much as R1,7
billion which was 1% below last year’s
spend, and non-alcoholic beverages spent
R440 million, a reduction of 8% compared
with the same period last year.
? Growth in the right premium offerings
i.e., Craft beers and liquor
? Ready-to-drink ‘value’ cans will gain
further traction
? Grocery stores will capture more spend
with a significant trend in liquor sales
Is more money being spent directly with
the retail trade? Ask your supplier for your
share!
? Promotional competitiveness will heat up
ANNUAL VOLUME GROWTH
Sports & energy drinks
13.8
Long life milks
9.1
CSD’s
8.2
Ice tea
7.0
Squashes & cordials
5.6
Mineral/bottled water
5.2
Coffee creamers
4.3
Powder beverages
3.9
Milk modifiers
3.6
Yoghurt
3.4
Flavoured milk
1.5
Tea
011-462 2130
Fax 011-462 2621
Call
E-mail: [email protected]
www.insulatedstructures.co.za
+2,8%
Advertising support
Beer .......................................................... -13%
Check the
Insulated Structures
difference
46,8%
-0.2
Total coffee
-1.8
Infant milk
-2.0
Powdered milk
-2.9
Fruit juice: short life
Fruit juice: long life
Fresh milk
-2.9
-5.2
-5.7
12
SUPERMARKET & RETAILER, AUGUST 2014
C
M
Y
CM
MY
CY CMY
Industry
trends
Supermarket & Retailer brings
you a compiled a shortlist of the
various categories that make up
cold beverages, indicating certain
trends from a year ago and having
a peek at the possible future
scenario.
Ready-to-drink (RTD)
Fruit Juices
The size of the market
increased over the last
year due to the arrival of
new players, an increased
emphasis on private label
products, new pack sizes,
more affordable pack sizes
and strategic promotional
activity.
Trends indicate that the
consumer is moving from
premium products with high value per
rand per litre to cheaper options. Smaller
packs and family-sized savings pack have
also shown an increase in sales. Suppliers
are focusing on underserviced areas and
have seen very good volume increases in
areas such as the Free State, Mpumalanga,
North-West and Limpopo provinces.
However, the major urban centres still
account for 73% of the total volume sold
in the country. Top end retail is still the
favourite place to find RTD fruit juices and
the export market now accounts for 10%
of all sales.
Iced tea
Volumes are down but the value sales have
increased. Some new entrants into this
market will be assisting in the potential
increase of volumes and it is apparent that
there is a rise on the weighted average
price in this category. However, increased
competition could have the opposite effect
by dropping the average price per litre
and apparently there are more suppliers
entering this market.
The supply chain will be also looking at
the underserviced areas to increase the
availability of the product ranges. Here are
some patterns of growth or retreat :
Wholesale trade
...................... 27% market share (growing)
Superbly designed,
Bottom end retail............... 12% (growing)
top quality
Top end retail........................... 37% (static)
cold room and freezer doors offer
On site consumption.......15% (declining)
numerous options uniquely designed for
Garage forecourts..............10% (declining)
convenience stores, supermarkets, wholesalers
Bottled water
This category is divided
into plain waters, sparkling
waters (the inclusion of
CO2 gas), flavoured waters
(infused with flavours and
invariably with sugar) and
functional waters (infused
with herbs, vitamins,
minerals and raw fruit and
vegetables).
Volume and value sales are generally up,
especially with plain water, but the average
price per litre is dropping due to aggressive
competition, new entrants into the market
and heavy promotional activity. However,
the swing to a healthier lifestyle by the
affluent and middle class population will
ensure that this category continues to
grow. The negatives are the increases
in input costs and the depressed status
of consumer spending patterns.
and various customised applications.
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(No visible wiring)
• REVERSIBLE DOOR OPENING
• TOUGHENED GLASS
• Cold Room or Freezer application
• Full range of shelving to compliment every set of doors
• Decorated trim is available to suit the colour scheme
of your store
• Manufactured in U.S.A.
DISTRIBUTED BY
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PLEASE CONTACT US ON:
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?
Volumes have increased
in this category due to
some very innovative
promotional campaigns,
the export trade, new
product launches and,
once again, a focus on
the smaller provinces.
Smaller pack sizes is where the sales come
from and it is estimated that the depressed
consumer spending patterns will keep this
market static for the foreseeable future.
Sports drinks
13
SUPERMARKET & RETAILER, AUGUST 2014
00232_I.S._3PROD_LUNACOMMS
According
to BMi
research:
K
?
COLD BEVERAGES
Although from a low base, the sale of
glass containers has shown some increase
but plastic bottles are still the main seller.
The lower value of the Rand has assisted
with the export business and Botswana
now subscribes to the South African Bottled
Water Standards, which makes export to
that country easier.
The distribution patterns of bottle water
are as follows:
Dilutables
Bottom end retail................................... 15%
This segment needs some definition as it
contains a plethora of products and their
respective qualities.
‘Bases’ are super concentrated cordials to
which the consumer adds sugar, ‘Cordials’
are concentrated fruit juices with less than
6% of the reconstituted fruit and can be
sweetened by flavours artificially. ‘Dairy
juice blends’ are flavoured milks with
fruit flavours to be drunk both ambient
and chilled. ‘Fruit juice concentrates’ have
anything between 20% and 50% fruit
juice content and are normally diluted
on a 1:4 basis. ‘Iced teas’ are dilutable
concentrated teas. ‘Sports drinks’ are drinks
with nutrients and electrolytes to replace
the loss of body fluids and to sustain
performance. It is important to note that
in this subcategory, we are referring to the
concentrates only and not to the RTDs.
‘Squashes’ are concentrated fruit beverages
with at least 6% of its reconstituted fruit
form.
As can be seen from the above, it is
important that, when merchandising this
category, these definitions are taken into
account when laying out your shelves.
Both volume and value sales have
increased over the last year as new players
and new products entered the market
and the consumer support of dilutables is
evident as they move away from spending
on premium priced products. Top end retail
is still the favourite purchase point for this
category (60%) while the convenience
areas of garage forecourts and bottom
end retail account for about 30% of the
market. Irrespective of the huge variety
available in this category, most of the sales
are accounted for by cordials and squashes
(43%) and dairy blend juices (44%). The
Eastern Cape was the single province that
showed significant sales increases over the
last year while the rest of the country has
lagged behind in percentage terms.
On consumption..................................... 10%
Carbonated Soft Drinks (CSDs)
Top end retail........................................... 45%
Bottom end retail................................... 18%
Garage forecourts................................... 12%
Wholesale.................................................. 13%
Three major urban metros.................. 72%
Energy drinks
These are defined as drinks with a high
level of caffeine that give one an adrenaline
rush.
This is one category that has grown
by double digit figures as the entry of
new players is continuous, the sale of the
product does not appear to be affected
by other beverages and both local and
imported brands are available for sale.
Although some variants are available
in glass or PET, the dominant packaging
is the metal can and there has been a
pronounced shift from the 440ml to the
500ml can.
BMi’s research indicates that both local
sales and exports will keep growing above
average and it is estimated that this market
may be worth three times its current
value by 2018. Distribution patterns are
as follows:
Garage forecourts....................................32%
Top end retail........................................... 30%
Wholesale.................................................. 15%
Gauteng accounts for 51% of all sales,
followed by Kwa-Zulu Natal with 18% and
the balance is split amongst the rest of
South Africa.
14
SUPERMARKET & RETAILER, AUGUST 2014
Both value and volume are up this year
due to regular promotional activity, very
competitive pricing and some new product
launches. Exports are down in value terms.
Due to depressed consumer spending
patterns, suppliers in this category
are focusing on underserviced areas.
Opportunities exist for retailers to sell
more of the second tier CSDs where the
price and margin levels are more enticing
for both retailer and consumer.
Here are some distribution statistics:
Top end retail............................................36%
Wholesale...................................................28%
Bottom end retail....................................18%
On consumption....................................... 9%
Cola flavour................................................46%
Other flavours...........................................54%
Beer
The most significant trend in
beer is the emergence of craft
beers, albeit from a small base.
Off consumption beer
accounts for 67% of sales and
shows an increasing trend,
while on consumption sales
with 33% are declining in
importance.
In Gauteng, which accounts
for 31% of all beer sales in the
country, the increase in the
petrol price and the arrival of e-tolls has
had a marked effect on the sale of beer
and this province’s market share is showing
a declining trend. Market share gains
have gone to provinces such as Limpopo,
Mpumalanga and North-West. Major
brands still hold a huge share of the market
and the barriers to entry for new brands
are prohibitive.
Sorghum beer
This very specialised
beverage, which is
available in both ‘wet’
and ‘dry’ forms, has seen
better days. The shortage
of sorghum crops is
affecting the volume sales
negatively and this has
been compounded by the
labour unrest in the mining belt and
competition from new ‘wet’ products.
A new emerging trend is a 20 litre
bucket which is more economical for the
consumer.
Most of the sales of this category are
concentrated in KZN at 32% and the
wholesale sector dominates with 90% of
the sales. Other than having some ‘dry’
packets on your shelf (provided there is
demand for it) this is not a recommended
category for supermarket operators.
Beautiful
Simple
Profitable
Flavoured Alcoholic
Beverages (FABs)
Although both value and volume sales
are on the up, this category has been
very inconsistent in the past. The market
continues to launch new variants, and
new flavour extensions, which keeps the
category fresh and new but it is not yet
properly established. Many new products
should be released in future.
The rand/dollar exchange rate is having
an effect on the price per litre as both
inflation and the input costs are rising.
Consumption in bars and restaurants
are the dominant sales areas with 66% of
all sales and Gauteng (once again more
affluent and with a clubbing culture)
accounts for 36% of the market. The
lower end of the market is starting to
experiment but the sales are not yet
substantial.
Carbonated soft drinks (CSDs) are a major
category for retailers and are dominated by
the premium brands. However, continuous
price promotions have turned these brands
into commodities yielding a very low gross
profit. The good news is that there are
alternatives available to the retailer.
Estimates of the size of the carbonated
soft drink market vary wildly depending on
whether one specifies
the defined retail
sector as measured
by some research
companies or
whether one includes
the total market,
which covers the
formal and informal
markets.
Various estimates indicate that premium
equity brands (Coke and Pepsi) may control
as much as 85% of the total market, but
there are two other categories that are
growing exponentially and astute retailers
?
Well, there you
have it. Analyse
the shelf space
allocation of
the various
sub-categories
and see
whether you
are giving it
the correct
exposure in
your store.
If you also own or manage a bottle store,
there are many opportunities in this
environment.
An
alternative
strategy
for
retailers
15
SUPERMARKET & RETAILER, AUGUST 2014
Tel: 021 851 8070
[email protected]
www.purelifestyle.co.za
?
COLD BEVERAGES
should pay attention to
this segment. We refer
to the quality economic
brands (Refreshhh,
CooEee, Jive and some
confined house brands)
which are estimated to
own 10% of the total
market and the remainder 5% is attributed
to entry-level economic brands, which
include CSDs with sweeteners and the
balance of the house brand market.
The main attraction of the middle layer
for retailers includes:
? The wide availability of brands and
flavours
? A lower cost price
? A more competitive selling price
? A better margin generated
? Only PETs are available, doing away
with the need for glass deposits
According to A. C. Nielsen, the flavoured
CSDs have grown in volume by an average
of 10% per annum over the last five years.
Many retail chains have developed their
own confined labels (i.e. exclusive labels
that can only be found on their premises),
such as Soda T (Masscash), California and
Plant (Shoprite) and Chill (Choppies).
All of the above reasons are cited for the
development of such confined labels.
However, independent retailers who
cannot access such confined labels have
the choice of talking to a number of
suppliers in the quality economic brand
ranges to achieve the same objective.
Wholesalers who have been traditional
distributors of such labels are currently
adapting their distribution model by
becoming distributors and medium to
small sized enterprises, who lack transport
facilities and have time restrictions, can
look to back-door deliveries of their
favourite brand at very competitive prices.
“This alternative to premium brands
has been there for a long time,” says
Darren Allaway, national trade marketing
and distribution director of Little Green
Beverages, who manufacture the Refreshhh
brand. “Lately, this sub-category of CSDs
has grabbed the interest of the retail trade
and all suppliers have learnt to trade in the
various sectors ranging from chains such
as Spar or Choppies to small independents
and the wholesale trade. The annual growth
is amazing,” says Darren.
16
SUPERMARKET & RETAILER, AUGUST 2014
Confronting the myths
that plague PET water bottles
The Natural Hydration Council (NHC), a United Kingdom, not for profit
organisation dedicated to researching the science and communicating the
facts about healthy hydration has produced a PET Plastic Water Bottles
fact sheet to help address some of the myths around bottled water.
This coincides with the formation of its
Technical Working Group, which will
address technical and regulatory issues that
affect bottled water producers in the UK.
The group will also support the NHC
Communications Group’s activities by
ensuring the facts related to the quality of
naturally sourced waters are communicated
effectively. It will work closely with key
stakeholders in the UK, as well as in Europe
through its membership of European
Federation of Bottled Waters.
Locally, a similar function is played by
the South African National Bottled Water
Association. It was formed in 1997 as
a standards setting and representative
body for the industry and is a voluntary
association of bottlers whose primary
concern is the health, safety and pleasure
of their consumers. They, therefore,
willingly conform to the extremely
stringent safety and quality measures
contained in the SANBWA Guidelines and
Standards, although the cost to them of
such compliance is considerable. SANBWA’s
environmental vision is to improve
members’ environmental stewardship by:
? Water: ensuring effective water
management – cradle to grave. This
will include requirements for source
protection, efficient water usage and
responsible effluent practices.
? Solid waste: reduce, re-use, recycle
? Energy: promotion of efficiency
? Post-consumer recycling: Supporting
current initiatives
It too has produced a list of facts to
counter the urban legends that plague PET.
Is PET a safe packaging option?
Yes. The inert PET bottle is a wellaccepted package all over the world and
is completely safe to drink from. It is also
lightweight, unbreakable, and recyclable.
It can be identified by a small number ‘1’
on the bottom of a container. This is often
displayed inside a triangular mobius or a
three-arrow recycling symbol. Alternatively,
the letters ‘PET’ will be stamped into the
bottle.
Does PET contain dioxins?
No, there is no dioxin in PET plastic. Dioxin,
a chlorine-containing chemical that has no
role or presence in the chemistry of PET, is
formed by volcanoes (!) and combustion in
incinerators at temperatures above 1 700º
Farenheit.
Does PET contain BPA?
No, Bisphenol A (BPA) is not used to make
PET, nor is it used to make any of the
component materials used to make PET.
Does PET contain DEHA?
No, DEHA is not present in PET either
as a raw material or as a decomposition
product. DEHA is also not classified as a
human carcinogen and is not considered to
pose any significant health risk to humans.
It can be found in water – bottled or tap
water – and is then called DOA. DOA is one
of the organic containments commonly
found at trace levels in just about all
drinking water. It is also sometimes –
wrongly – interpreted as di-ethyl hydroxyl
amine which is not found in PET or in the
production of PET bottles.
Does PET contain
endocrine disruptors?
No, there are no substances known that
can migrate from PET that could be
responsible for the endocrine disruptors
(substances having a hormonal effect)
identified in a study commonly referred to
as the ‘Goethe Study’.
Does PET contain
antimony oxide?
Yes, PET does contain antimony oxide,
which is used as a catalyst. However, the
amounts are well below the established
safe limits for food and water set by the
World Health Organisation. For example,
a 60kg person would be able to tolerate
an intake of 360ug but the guideline for
drinking water is 15 – 20ug/l.
Is it safe to freeze
a PET bottle, or keep it
in a hot car?
Yes, of course. The idea that PET bottles
‘leach’ chemicals when frozen or heated in
hot cars is not based on any science, and is
unsubstantiated by any credible evidence.
Can I reuse a PET bottle?
Yes, like other food or beverage containers,
PET bottles can be re-used if you take
steps to prevent the growth of bacteria.
These bacteria thrive in warm, moist
environments; that is, in virtually any
beverage container under the right
conditions. Wash all your containers, not
just PET bottles, with hot soapy water and
dry thoroughly between each use. Further,
when looking for a bottle for long term
use, pay attention to the design of it and
its closure. Make certain you can easily get
into all ‘nooks and crannies’ in order to
be able to clean it properly.
Are PET bottles
recyclable?
Most definitely
yes, and simply
recycling the
PET bottle reduces
its carbon footprint
by some 25%.
“One of the
peculiarities of
consumer behaviour
is that they are quite happy to consume
many foodstuffs and other beverages
– yoghurt, milk, fruit juice, for example –
that are packed in plastic but are easily
influenced by one of the main arguments
used against bottled water, that is that the
bottles themselves pose a danger to human
health. Nothing could be further from
the truth,” said SANBWA CEO, Charlotte
Metcalf.
“SANBWA is committed to responsible
environmental stewardship, and members
are required to comply with the
association’s environmental vision. This
includes many measures to ensure source
sustainability and protection, water usage
minimisation, energy efficiency, solid
waste minimisation, and supporting postconsumer recycling initiatives.
“And no, the bottled water industry
doesn’t have a large water footprint.
By comparison, to produce 1 kg of maize
requires 900 litres of water, one cup of
coffee needs 140 litres of water and
to produce 1 sheet of A4 paper requires
10 litres of water. Bottled water’s is
1.8 litres,” she said.
Acknowledgement: South African National Bottled
Water Association
17
SUPERMARKET & RETAILER, AUGUST 2014
doc_509313975.pdf