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Ceylon Cold Stores sees slow fizzy drinks growth on health concerns

COLOMBO (EconomyNext) – Ceylon Cold Stores said growth in its carbonated soft drinks business is limited owing to lifestyle changes and it was switching to natural flavours and colours in new products.

The domestic carbonated soft drinks market remained “sluggish” for a good part of last year, the company said in its annual report for 2013-14.

But notwithstanding the tough market environment, the category profitability grew 49 percent compared to the previous year, the firm, part of the John Keells Holdings group, said.

Ceylon Cold Stores Chairman Susantha Ratnayake told shareholders he was confident the increase in disposable income in the last quarter will act as a catalyst for greater demand for the firm’s frozen confectionery products.

But he noted “growth potential for carbonated soft drinks may be constrained to an extent in the medium to long term due to a growing segment of health conscious consumers.”

The company extended its beverage range during the year by introducing a fruit flavour based green tea with minimal carbonation.

“These additions to the portfolio aim to cater to the emerging trend for lifestyle beverages in tandem with the global movement towards healthier lifestyle choices,” Ratnayake said.

Ceylon Cold Stores was doing research and development to use natural flavours and colours when re-inventing existing products and introducing new products, he said.

The annual report however noted that opportunities for growth within the beverage industry as a whole “remain promising”.
 

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