The European Soft Drinks Industry Supporting Jobs And Growth

Transcription

1 The European Soft Drinks Industry Supporting Jobs And Growth Socio-economic study undertaken by Canadean, leading market research and analysis provider to the beverage industry

2 Adding value throughout the European economy The European soft drinks sector and its value chain have a significant impact on Europe s economy. The industry provides employment and value throughout the EU28: from the agricultural sector which supplies ingredients such as fruit and sugar; through to the manufacturing, packaging, and bottling processes which support many thousands of suppliers; and the distribution sector which transports its products to their final destinations servicing shoppers and clients in bars, restaurants and retail outlets across Europe. The soft drinks industry is a part of the fabric of Europe s economy billion value-added impact 9.2 billion direct, related to soft drinks producers themselves including salaries, tax payments and profits within the EU28; and 46.2 billion supported value-added from indirect elements up and down the value chain including ingredients and packaging suppliers, distribution, advertising and marketing and retail. Over 1 million jobs 156, directly and a further 89, jobs supported throughout the EU28 economy. Each worker employed by the soft drinks industry supports another six workers in the European value chain billion in taxes 1.9 billion direct, 7 billion indirect or supported by the value chain and 13.3 billion in VAT. 56 billion litres of soft drinks are consumed annually across the EU28 with a retail value of 93 billion. 83% of volumes are sold through the off-trade including supermarkets and corner shops.17% are sold through the on-trade including bars, restaurants and hotels. In value terms the on-trade commands a 57% share and the off-trade a 43% share of the 93billion total.

3 Sourcing agricultural ingredients A closer look at the value chain A local industry bringing benefit throughout the value chain The European soft drinks industry is a local industry. Production, distribution and sales all take place close to the consumer, generating employment at all stages of the value chain and contributing to the local economies. There are 171 production plants across Europe, operated and staffed locally and supplying the local customers and markets. 171 Production plants and facilities Soft drinks companies source their agricultural ingredients including fruits and sugars from farmers right across Europe. Citrus fruits are bought from literally hundreds of growers in Spain, Italy and Greece and apples and berries are supplied from many of the EU28. Sugar beet is sourced from across Europe including from France, Germany, Poland and the UK. Water is the primary ingredient in beverages. Most soft drinks, including regular and no- and low-calorie sparkling beverages are between 85-95% water. Water is sourced from boreholes, lakes and municipalities and the industry follows the most advanced efficiency and quality standards to ensure sustainable source use and water quality. Polish Sugar Beet Farmer, Tomasz Wawrzyniak. My family and neighbours have grown sugar beet for many years and it is our main source of income. We deliver our crop to the sugar factory in Gostyn where it is processed for use in many products. When I see soft drinks on the shelf in my local supermarket I know that many of them contain sugar from my crop. Working with local companies Greek owner of Kapa Trans transport company Kostas Papakostas. I started working as a driver in a contractors delivery truck in Since then, by working hard, I have grown my own business to 18 trucks and I employ 3 people. Mutual trust, open books, understanding my client s need for top service and seeing every customer as my own have been the key to my success. I owe a great deal to the soft drinks industry, the people know they can count on me whatever the task and their sites are my second home. Belgian manager of Brazzaville and Jagershof Brasseries, Eddy Bastanie Soft drinks are an important part of our business. As a Brasserie we are open all day so whether it is business customers coming in for a drink and a quick lunch or families sitting down for a full meal, soft drinks are regularly a part of the order. We have a longstanding relationship with our suppliers and can depend on the delivery of quality products that customers want to buy and that deliver value for money for both them and us.

4 Generating jobs throughout the supply chain The production and bottling of soft drinks generates local jobs and income. It also supports jobs, incomes and tax revenues throughout the economy through its purchase of goods and services from suppliers of packaging, plant machinery, transport, design, advertising and marketing. Finally of course, at the end of the supply chain, soft drinks generate income for the distribution network of restaurants, bars, supermarkets and stores where they are sold. Value added supported by the soft drinks industry in EU 28 Billion Direct Indirect VAT 13.3 AGRICULTURE AND INGREDIENTS # Jobs 12 1,5, 1 Direct Indirect 9.2 Total Value Added Total Value Added Household Income Profits & Savings Tax Income Total Jobs 2, 32, 27, 156, 39, 18, 1.9% 3.5% 2.57% 14.86% 3.71% 17.14% 56.76% Ingredients Packaging Services Soft Drink Transport Off Trade On Trade Producer Sector breakdown of jobs supported by the presence of the soft drink industry in the EU28 596, Benefitting governments and households The soft drinks industry contributed 55.4 billion of value to the EU28 in 212. The EU member states are key beneficiaries, enjoying benefits of at least 22.3 billion from labour taxes to VAT associated with the industry s products. Households in the industry s supply chain received 25.1billion in the form of incomes after income tax. The sector supports one million jobs either directly or indirectly including 2, jobs in European agriculture and ingredients, 39, in the European transport sector and 596, in Europe s catering industry..43% of the EU28 labour force relies on the soft drinks industry for employment. A stable economic sector Soft drinks is also a stable economic sector. During the recent economic crisis when many industry sectors have seen significant erosion of value and markets, the soft drinks industry has maintained its sales and volumes across Europe and continued to provide employment throughout the economic value chain. Value added impact split by value chain element Billion Total Value Added Direct Indirect Vat 4.3% 3.4% 3.7% 16.6% 2.7% 1.8% 34.3% 24% Ingredients Packaging Services Soft Drink Transport Producer Off Trade On Trade VAT

5 Breakdown of value added across the Supply Chain in key markets % Share of Value Added Impact, %Bn 1%.6 2% 3% 2.8 4%.4 5% 1.4 6% 7% 8% 5.4 9% 1% 3.3 Germany Impact across major EU markets Franche Adding value right across the EU28 The European soft drinks industry is a local industry that supports added value and employment across the supply chain in each of the EU member states. The total is broken down for six key markets here. It serves to illustrate the value added impact for each element of the supply chain from ingredients, packaging and services through to transport and on and off-trade sales United Kingdom Spain Value added supported by the soft drinks industry in THE EU Billion Italy Packaging Services Netherlands 4 Ingredients 3 Soft Drink Producer Transport Off Trade On Trade VAT Key market breakdown of value added impact Total Value Added 26.7% Germany 14.4% UK % France % Spain % Italy Key market breakdown of value added impact % Netherlands 16.6% Other Methodology Canadean final consumption volume and value data for the EU28 markets is the starting point for the analysis. Suppliers, markets, channels and consumers were examined using mixed mode studies of primary industry research and market modelling, interviews, panels, and consensus sizing, plus analysis of wide data sources and consumer surveys. UNESDA members provided data confidentially to Canadean, detailing volumes, revenues, key performance metrics, company structure, employee costs, taxes and profit generated per corresponding volume of soft drinks. Data of spend in the value chain was also provided and combined with publicly available information such as annual reports. Data on structure of indirect value chain inputs were sourced including Canadean Intelligence Centre information on industry suppliers. Each stage of the value chain was examined from ingredients, packaging, soft drink production, advertising, distribution and retail. These sources were used to model a picture of employment and value added related to soft drinks in these associated industries.

6 About the European Soft Drinks Industry UNESDA represents the European soft drinks industry comprising: still drinks, squashes, carbonates powders, iced teas, iced coffees, syrups, energy drinks and sports drinks. It includes many traditional drinks such as Julmust in Sweden and Kvaas in Eastern Europe. A responsible industry with a strong record of self-regulation UNESDA has made ground-breaking commitments to the EU Platform for Action on Diet, Physical Activity and Health. They demonstrate that the sector acts responsibly right across the EU28 and cover four key areas. Corporate signatories to the UNESDA commitments adhere to the following: No Advertising to Children under 12 On TV, print, online or cinemas In the digisphere including social media or company owned websites Responsible behaviour in schools No sales in primary schools Ensure full range of beverages is available in secondary schools, Respect commercial-free character unbranded vending machines Involve parents and educators in choice of beverages Clear calorie and nutrition information Sectorwide Guideline Daily Amount labelling scheme and complete roll-out since 28 Nutrition information in a consumer-noticeable way On-pack calorie info per 1ml/or per serving on all products Prominently advertise on pack the low/no-calorie nature of products Increase availability of no and low calorie drinks and provide more pack size options Number of new products with low/no calories Choice and availability of individual pack sizes and cup downsizing UNESDA regularly appoints independent, third-party consultants such as PriceWaterhouseCoopers to monitor its compliance. Levels of compliance are extremely high and are shared with the European Commission and EU Platform peers. Environmental Stewardship UNESDA members make the environment an ongoing priority and focus on three key areas: water efficiency and protection; packaging and the recovery, recycling and reuse of materials; and energy efficiency and reduction. UNESDA is a founding member of the PET Platform which commits to 1% use of recycled material. For further information:

7 Copyright UNESDA 214 All data included in this study comes from 212