As one of the key industries listed in the 11th Five-Year Plan, food & beverage industry will meet great opportunities to develop rapidly owing to the relevant favorable policies from Chinese government. And soft drink manufacturing, which is a sub-industry of food industry, has generated a rapid growth along with the improvement of people's consumption level and health consciousness.

According to data from China National Light Industry Information Center, by Sep 2006, the output of soft drink has reached 32.69 million tons; gross production value (at current price) and sales revenue have achieved RMB 102.608 billion and RMB 111.364 billion respectively, each up by 24.32% and 27.26% compared with the same period of 2005. Obviously, both output and sales enjoyed a boom in China soft drink industry with accumulative sales/output ratio up to 99.359%.  

Monthly Output Growth in Fruit Juice Industry

Undoubtedly, both primary implement of the 11th Five-Year Plan and sustained development of domestic economy will drive the steady and sound development of China beverage industry. Besides, affected by both increasingly growing demands and enlarged production capacity, industrial structure will be further upgraded and optimized, and meanwhile, new drink products are successively brought forth, which can develop more segmented markets.

As a result, much greater opportunities will be created for those superior enterprises, especially for those brand enterprises as they can adapt themselves to consumption upgrading and focus on brand cultivating, channel exploring as well as management improving.

However, some problems and risks also exist along with the rapid growth of China soft drink industry. What cannot be neglected is that the increase of raw material cost will affect the development of food & beverage industry to some extent. Taking the berry sugar for example, it's estimated that in 2006-2007, the tension between supply and demand both at home and abroad in grinding season will still aggravate and its price will keep rising, which is best exemplified by continuous short squeeze of futures price of berry sugar. Undoubtedly, the cost pressure in food & beverage industry will increasingly heavy under the economic globalization.