site.btaProduction of Soft Drinks, Bottled Water Drives Development of Labour Market at Regional Level

The regional role of the soft drinks and bottled water industry is directly dependent on the size of the local economy in which the industry is located. In Bulgaria, the focus is on the areas around and north of Sofia, around Plovdiv and in the Rhodopes. This is according to the results of a study by the Institute for Market Economics for the Bulgarian Soft Drinks Association (BSDA) presented earlier this year, the association said.

The largest clusters of production are in Kostinbrod, Saedinenie, Devin and Sofia, which also have the largest concentration of workers in the sector. The sector in Devin accounts for more than half of the sales revenues of non-financial enterprises, while the one in Kostinbrod - more than a third. The aim of the study is to give an up-to-date picture of the main indicators of the sector's status and dynamics and to analyse the overall impact of the companies' activities on the related industries and the country's economy.

"In the eastern parts of the country, this branch of the manufacturing industry is almost absent. The reason for this is access to water there, as much of it is focused on mineral water bottling. It is important to note, however, that the role of the industry on the local economy is relatively small for Sofia, but structurally decisive for Kostinbrod, where it creates approximately one-fifth of all jobs. The same can be observed in the local labour markets in Saedinenie and Devin", said Jana Velichkova, Executive Director of BSDA.

She added that if we look only at companies that have revenues over BGN 1 million, the largest concentration of employees in the sector is in Kostinbrod with over 1,000 employees in bottling companies in 2020. All revenues generated by the leading companies in the soft drinks and bottled water industry are distributed almost in parallel with the number of employees – 29% of the revenues of the major companies in the industry are concentrated in Kostinbrod. It is followed by Devin with 8% and the capital with 5%.

Soft drinks and bottled water companies account for 5% of total employment in the food and drink industry, equivalent to nearly 4,700 jobs. This represents 0.9% of manufacturing employment in Bulgaria and 0.2% of employment in the country's overall economy. Besides being a producer, Bulgaria is also a net importer of non-alcoholic beverages. Over the last five years, there has been a rapid increase in foreign trade, with both exports increasing from EUR 16.3 million to EUR 102.5 million and imports increasing from EUR 70.3 million to EUR 155.9 million. Despite unprecedented pandemic-related constraints, the growth trend continues in 2020.

Exports are mainly directed to Italy (about half of sales), Greece, Serbia, and Romania. Imports are relatively more diversified, with about a third of total imports coming from trade with Italy, followed by Romania (13%) and Serbia, Hungary, and Austria (26.5% in total).

The results of the study are based on industry-reported data for 2019, when 187 companies manufacturing soft drinks, mineral and other bottled waters were actively operating in the country. Of these, 14 are medium and large enterprises, generating more than 87% of total sales in the sector and 91% of value added. According to the BSDA data 1,757 million litres of beverages were produced in Bulgaria, of which bottled waters accounted for nearly 47%.

According to the public registers of the Ministry of Health and the Bulgarian Food Safety Agency, production activity in the country takes place in more than 150 establishments. During the reporting period, enterprises producing soft drinks and bottled waters generated sales revenues of over BGN 810 million. This represents nearly 44% of the revenues of companies producing all types of beverages, about 6.3% of the total revenues of food and beverage producers in the country and 1.2% of the revenues of the manufacturing industry in Bulgaria.