The sugar issue in soft drinks is influencing manufacturer, retailer and consumer behaviour but there are other important trends too.
SOFT drinks is becoming a wide-ranging category that is being affected by many social trends and which needs to be carefully managed if retailers are to make the most of the possibilities it provides.
But the good news is that c-stores remain some of the most successful soft-drinks venues in retail.
• At Coca-Cola Enterprises trade communications manager Donna Pisani quoted Nielsen research and said: “Soft drinks are valued at £1.33bn in indies and symbols, up 1.1% in the year to date. Cola remains the biggest seller, and Coca-Cola’s portfolio retains its position as the number one brand.
“Choice is a key driver behind the category, particularly with the rise of health conscious consumers.
“As consumers become increasingly health-conscious, lower and zero-calorie ranges have been a key focus at CCE for some time. We have invested £15m on reformulation since 2012, helping to reduce the average calorie content in our sparkling drinks by 5.3%. We will invest at least £15m in research and development and product development by 2020.
“Retailers should consider their best-selling drinks, and stock a low or zero-sugar equivalent. It’s also advisable to monitor for new products, or those being backed by marketing campaigns, in order to make the most of consumer interest.
“Bottled water is performing well, with 11.9% growth to £736.2m,” she said.
“Elsewhere in the category, energy drinks continued to perform well and this growth looks set to continue as further innovation in low or no-sugar variants are introduced to the sector.
“Adult soft drinks, including our Schweppes and Appletiser brands, are proving to be a popular choice for at-home social occasions.
“Instant consumption juice drink formats remain a popular choice for busy on-the-go consumers making impulse buys. This popularity has driven growth amongst the CCE portfolio of juice drinks, with Oasis the number-two instant consumption brand, whilst Capri-Sun continues to perform well, and sits as the number-three instant consumption brand.”
• Quoting IRI marketplace figures specifically on Scotland, AG Barr says the country’s £694m soft drinks category continues to be tremendously important to driving daily footfall in stores.
It says water is the fastest growing sector at 8% while carbonates continues to be the biggest category, accounting for 72% of drink-now sales. Within carbonates, energy drinks continues to be the biggest category but flavoured carbonates, which includes Irn-Bru, and cola are also important, each accounting for one in five drink-now sales in Scotland.
Barr stresses the importance of Irn-Bru Sugar Free, Scotland’s number-one low-calorie flavoured carbonate. Some 42% of carbonates sold in Scotland in 2015 were low or zero-sugar, it says, and low-calorie drinks users consume 33% more than people who drink regular soft drinks.
Irn-Bru Sugar Free is being given a major role in the current rebranding of the Irn-Bru range, which is covered in detail in the Market News section of this issue of Scottish Grocer.
“Don’t underestimate the importance of offering chilled soft drinks,” said AG Barr head of marketing Adrian Troy. “Drink-now sales account for more than three quarters of all soft drinks sales in impulse – and consumers prefer these drinks to be chilled.
“Chilled availability is the key driver for soft drinks sales, particularly between April and August – the really critical summer months. Shoppers consume 12% more soft drinks during the summer with water, fruit drinks and other flavoured carbonates benefiting most. Retailers who adapt their ranges to reflect this range, particularly in the chiller, will benefit significantly,” Troy said.
• Health, flavours and price are some of the main influences on the important energy drinks sub-category, says Rich Fisher, category development manager at Red Bull UK.
With growing pressure to promote healthy alternatives, a number of reduced or zero-calorie energy drink variants have been launched and Red Bull variants have taken leading market positions including Red Bull Sugar Free Original 250ml as number one in the segment, Red Bull Sugar Free 250ml four-packs as number four and Red Bull Zero at five.
In 2015 Red Bull grew by 5.1% in value and 5.7% in volume, well ahead of the sports and energy drinks category, which was up 0.5% in value and 0.4% in volume, he said.
Flavours have been important to the growth and Red Bull recently extended its Editions range by launching Red Bull Orange Edition, which followed the introduction of Red Bull Tropical Edition.
And Fisher said Red Bull’s price-marked range has seen positive market growth, with the 355ml can up 27% in value sales in the year to date compared to the previous year.
• The impact of sugar issues on the soft drinks market can be seen in the types of segments experiencing growth, with water-based categories thriving while other categories are showing slower growth, reckons Nigel Paine, GB commercial director of out of home at Britvic.
“By 2020, 60% of our new products will be lower sugar or have added nutritional benefits, and we’re also reducing the average number of calories consumed per serve by 20%,” he said.
“The summer season is a key sales opportunity for convenience retailers as the hotter weather drives shoppers into store. Thirsty shoppers will most likely be looking for immediate, cold refreshment so it’s vital that chillers are well stocked with single-serve formats throughout the day with a range to satisfy all tastes. Sharing formats should not be neglected as barbecues and picnics encourage spikes in demand for larger bottles and multipacks too.”
Britvic last month unveiled a complete relaunch of its juice drink, Drench.
The refresh of the brand sees the launch of new 500ml packaging. The new recipe, which includes no artificial sweeteners, uses a combination of juices and spring water and naturally sourced stevia sweetener.
• Vimto has launched its Vimto Remix sub-brand with a new blend, a mixture of mango, strawberry and pineapple, and a secret Vimto recipe. It became available in impulse outlets last month.
The range includes a 500ml fizzy £1 price-marked pack, a new can in both 55p PMP and plain packs and a 500ml still drink in both £1 PMP and plain packs.