GENERAL MARKET PERFORMANCE 
In 2012 sales of soft drinks in Russia saw 5% increase in volume and exceeded 12 billion liters; in value terms sales grew by 10% and reached RUR 455 billion. Market dynamics slowed down in comparison to 2010 when market increased by 14% in volume and 23% in value. It should be considered however that 2010 was the year of after recession recovery of the market and abnormally hot summer. Growth rates of 2011 and 2012 speak for maturity of Russian soft drinks market, so no leaps of sales are to be expected. Russian soft drinks market is the largest in East Europe and the 12th large market globally both in value and volume. Though in absolute terms Russian market looks quite impressive per capita consumption – 86 liters per person in 2012 – is still behind many countries both in East Europe and other parts of the world. Compare: per capita consumption of soft drinks in Estonia is 120 liters annually, in Poland – 182 liters, in Czechia – 200 liters, in West Europe – 223 liters on the average, and in North America – over 300 liters per person annually.

ENERGY DRINKS
Most impressive sales dynamics on the review market in 2012 was demonstrated by energy and sport drinks – increase by 17% in volume and by 20% in value. The fact that energy drinks provide just 1% of soft drinks market in volume contributed to this impressive growth. Besides, increasing popularity of energy drinks in 0.5 liter and 1liter PET bottles underpinned market development. In 2011 "Coca-Cola" launched its brand "Burn" in 0.5 liter PET container. Beer brewing company "Baltika (Baltic)" also accented this package format in development of its brand "FlashUP"; though this manufacturer wasn't quite focused on non-beer brand its well-developed distribution network made "FlashUP" a rival to such well-known transnational brands as "RedBull", "Burn", "AdrenalineRush". Small local manufacturers operating mainly in low price category also tried to compete with the named brands. Thus, large-size package formats and competitive pressure of local manufacturers made prices for energy drinks more affordable for Russian consumers; the category ceased to be perceived as premium only. Future of energy and sport drinks looks pretty bright, though certain legislative threats do exist. Different institutions already tried to initiate ban on sales of energy drinks; in some regions sales were even banned for some time.

BOTTLED WATER
In absolute terms most impressive growth among soft drinks categories was demonstrated in 2012 by bottled water – by 14% in value or by RUR 15 billion. Russian consumers are often not satisfied with quality of tap water, so if income allows they either purchase bottled water or tap water filters. Bottled water will continue vibrant development in the future driven by increasingly popular health and wellness trend, growing affluence of consumers, and also by launches of new functional drinks and flavor combinations by transnational and local manufacturers with their strong presence on local markets of bottled water.

CARBONATED DRINKS
In 2012 carbonated drinks saw 3% growth in volume so sales exceeded 4 billion liters. On the one hand, negative impact of carbonated drinks on health is widely discussed, so limitation of sales and extra taxation of the category were suggested. On the other hand, this trend is a threat only during the forecasted period. Consumers and manufacturers of carbonated drinks shift to healthier drinks gradually. Thus, drinks positioned as natural are getting more popular. For instance, line of natural lemonades "Napitki Iz Chernogolovki (Drinks from Chernogolovka)" is positioned as drinks made only from natural ingredients. Another good example is traditional Russian kvass – popularity of this drink rocketed during the last decade and today all major players of the review market have kvass in their product portfolios. However, the category of carbonated drinks is still dominated by cola-based products.

FORECAST
During the next five years soft drinks market will be growing on the average by 4% in volume and in current value terms. Though growth does not look too impressive in relative terms it will exceed USD 3 billion in absolute figures. This dynamics will make Russia one of the largest developing soft drinks markets along with other BRIC countries and USA. The growth will be possible due to positive macroeconomic forecast on the growth of real GDP – by more than 4% annually during 2012–2017. Transnational companies will contribute greatly to the development of the review market. For instance, "Coca-Cola" announced its plan to invest $ 3 billion to its Russian business during the next five years.

Changing structure of retail sales also contributes to positive dynamics of soft drinks market. Modern retail formats like hypermarkets, supermarkets, convenience stores will be showing two-digit growth rates of all indices during the forecasted period. For instance, one of the most dynamic retail chains "Magnet" announced the plans to increase the number of its hypermarkets by 5 times (up to 500 stores) by 2019 and the number of its convenience stores from 6000 to more than 7000 during 2013. This chain starts stores both in cities and settlements with population 5 thousand people and more. Spread of modern retail formats to Russian periphery involves more consumers and offers them complete choice of soft drinks including new healthy and functional products.

Research of the Company "Euromonitor International"