Hot drinks are the only category expected to experience growth in Russia’s faltering beverage market, according to new research from Canadean.
Growth in the hot tea market could provide the only positive, with soft drinks and some alcoholic drinks forecast to shrink by as much as 7% and 10% respectively. But the worst affected sector would be the country’s juice market, which is expected to experience decline of 30% during 2015.
In March, we reported that PepsiCo was having to consolidate its Russian juice operations amid falling demand and heightened economic pressures. Coca-Cola announced similar measures less than a year earlier.
Their decline is being fuelled by persisting tensions in international relations and the rising cost of raw materials.
Canadean analyst Michael Wiggins said: “Usually, lower cost nectars benefits from a decline in juice as consumers trade down, but in Russia the increase in the cost of raw materials will badly sting both categories.
“The decline in the market will largely be due to the tough tax regime and legislative environment adding to the external factors.”
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