Thirsty Thoughts Fruit Juice Annual Market Quantification April 2011

Setting the scene 2 This market consists of an array of large and small players. Many dairies supplement their income by producing fruit juice, as the filling machines used to fill bottles for dairy blends or milk products are similar to that of machines used to fill bottles with fruit juice. The fruit juice market consists of ambient and chilled categories, within which exist the pure, nectar and fruit drinks categories. Many traditional flavours have remained popular with consumers, such as the orange, grape, apple and granadilla juice. Some new flavours becoming synonymous with the industry include berry variants, pomegranate and herbs such as lemon grass and mint. The fruit juice market is perceived as a healthier alternative to other non-alcoholic beverages due to the natural aspect, as well as the vitamins and nutritional value available to the consumer through this beverage. Packaging within this market ranges from glass to sachets, as almost all forms of beverage packaging types are used here due to the diversity of the market. Popular packaging materials include cartons, glass, plastic and sachet packaging. South Africa’s RTD fruit juice market strength is assisted and sustained through the good agricultural background of the fruit growing industry which has made the market an asset in agricultural circles and bolstered the fruit crop contribution to the local economy.

2010 Category Shares 3

Annual Growth Rates 4

Fruit juices make steady recovery 5 In 2010 the RTD (ready to drink) fruit juice recovered from volume losses seen over the economic downturn. The market is expected to reach 2007 levels by the end of 2011 as consumers free up more disposable income for luxury items like fruit juice. Regional distribution of RTD juice remained fairly constant from the pattern seen in 2009, with Gauteng and the northern provinces continuing to dominate. Channel distribution on the other hand changed significantly with a notable skew towards retail and wholesale as the smart shopping trend continues to gain popularity. Although off-consumption continues to be popular in Europe, on-consumption has experienced stronger growth. The imminent introduction of juice bars is expected to change the channel distribution landscape in this region as manufacturers tap in on the stronger growth potential in on-consumption. Pure fruit juices remained the most popular juice type, with nectars and fruit drinks distant second and third choices, respectively. Fruit drinks lost significant share to pure fruit juices while nectars maintained fairly similar share levels.

Fruit juices make steady recovery (cont.) 6 The long vs. short life split was almost 50/50 as long life juice continues to gain popularity due to changes in consumer shopping habits. The trend towards smart shopping where consumers stock up on groceries during one monthly shopping trip is believed to have contributed to gains seen in long life fruit juices, as consumers increasingly prefer to buy the shelf stable versions. In terms of juice flavour, orange, the traditional favourite continues to stand firm. Blended flavours, featuring two or more flavours as well as exotic flavours are also gaining ground, as are superfruit and herb combinations. In future, growth in the RTD juice market is expected to continue to be driven by the health trend, which will continue to be the main positioning statement across all juice types. Widespread introduction of the following is expected to rejuvenate growth in this industry: Increased manufacture of premium 100% fruit juices and smoothies made from natural, organic fruit Super fruit and exotic fruit flavours Addition of probiotics, phytosterols and fibre Vitamin fortification Unsweetened juices

Thirsty Thoughts Fruit Juice For more information, contact: Jan Wegelin Research Manager Tel: (011) Mobile: