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17th Nov 2018

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How the European soft drinks industry generates revenue for economies across the EU

  • Some €103 billion worth of soft drinks are consumed in the EU each year (Photo: Gabriel Gurrola on Unsplash)

The European soft drinks industry has a significant socio-economic footprint across Europe. Its impact on industries up and down its value chain is worth €185 billion – equivalent to 1.24 percent of EU GDP.

Rooted in the European economy the sector generates 2.5 times more revenue for the industries in its value chain than it receives itself. Let's take a closer look.

Revenue throughout the value chain

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So how does the industry touch on other economic sectors across the continent?

First off, it sources raw ingredients such as fruit, berries and sugar beet from farmers and growers all over Europe. It also relies on a host of suppliers to provide the industry with syrups, flavourings, sweeteners and juices. Next it needs to package its products and so depends on the wood pulp, metals, plastic and glass industries for the different packaging formats.

The industry then employs creative agencies around Europe to promote its products to consumers. It also invests in research and development to deliver new products that meet changing tastes and demand for low and no sugar varieties and sustainable packaging.

The final links in the value chain are of course the transport and distribution companies that move the products and the retail and foodservice outlets where they are ultimately sold.

For some industries the revenue attributable to the soft drinks industry represents a significant share of total revenue - almost 10 percent of total revenue for the EU foodservice sector for example, over 4 percent of revenue for the creative services sector and 3.7 percent of revenue for the packaging sector.

Supporting employment

In addition to adding economic value, the soft drinks industry delivers employment. The sector supports some 1.7 million jobs across the EU directly and indirectly, delivering salary payments of €26.7 billion and almost €30 billion in tax contributions to EU member states.

Each job in the soft drinks sector supports another nine jobs in associated industries: the sector employs almost 170,000 people itself. Over one quarter of a million jobs in EU agriculture are supported by the soft drinks industry with over 190,000 retail jobs and 970,000 food service jobs also attributable to the sector.

Sourcing and producing locally

Some €103 billion worth of soft drinks are consumed in the EU each year. They are produced at 424 different sites across the EU and support some 137,500 EU farms in sourcing their ingredients - together with 154 different packaging production sites and 90 raw material sites.

Innovating for the future

The industry spends €70m on research and development in the EU each year. There are R&D facilities and staff sited across Europe including in Amsterdam, Barcelona, Brussels, London, Madrid and Paris, with 560 researchers and scientists employed in innovating in drinks and packaging. Some 1,500 new products are introduced each year with new varieties and flavours from no sugar drinks to plant based options.

Contributing to the communities in which it operates

The soft drinks industry operates locally and is an active contributor to the communities in which it operates. It gets involved in community programmes– from inner city regeneration and local environment clean-ups to sports programmes and the promotion of educational opportunities for the disadvantaged.

The sector is a fierce defender of gender and race equality and a promoter of diversity, and is committed to making a positive contribution to the communities of which it is a part. As well as investing through a wide range of grants and partnerships the soft drinks sector also has a proud tradition of community volunteering among its own employees.

Content based on a study by Global Data. Read more here.

Sigrid Ligne is director general of UNESDA Soft Drinks Europe

Disclaimer: This article is sponsored by a third party. All opinions in this article reflect the views of the author and not of EUobserver

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