The soft drinks category is one of the biggest for the convenience channel, and it is energetic and in a constant flux of changing tastes, flavours and NPDs.
That makes it exciting, but also demanding as retailers try to stay on top of the complex merchandising issues and options.
And the category is changing as more adults become involved with it and premium brands develop. “Soft drinks used to be seen as a category that was primarily for children but the category has become increasingly sophisticated and now soft drinks manufacturers offer premium variants aimed at adults,” says Marcus Hudson, sales director at Clearly Drinks.“One in five people are now choosing to be teetotal and seven in 10 adults are consuming premium soft drinks at home, according to Mintel.”
Meanwhile suppliers, who responded to the first lockdown by rationalizing their offers, are once again full of optimism and energy, with new flavours and products appearing every day.
Now, as the lockdown at last looks set to ease, and with the prospect off longer, sunnier – and thirstier – outdoor occasions to socialise in, back on the calendar, these look set to be good days for all aspects of the soft, cold drinks section, with something of a return to old times.
“It’s no surprise the impact that COVID has had on our shopping habits throughout 2020, with categories reliant on the on-the-go mission being most heavily impacted as shoppers are told to stay at home,” says Bestway Wholesale’s Trading Director,Kenton Burchell, adding that, “As we move into 2021, and the latest government roadmap for easing restrictions is announced, we expect small formats to be vital to category recovery, with higher levels of footfall in key on-the-go locations such as travel sites and high streets.”
Soft drinks have had a good year and it took more than a pandemic to kill the appetite for fizz and all that goes with it, as Barr Soft Drinks Marketing Director Adrian Troy explains: “Despite Covid restrictions in Summer 2020, the UK saw a 44 per cent increase in BBQs, with 100 million of these taking place between April and August.And with 73 per cent of the population expecting to have a UK staycation in 2021, retailers can expect this trend to continue.”
He says that summer is key to the entire soft drinks market and retailers need to ensure that their fixture is balanced to reflect seasonal category uplifts in order to generate maximum profits. From June to August – the crucial period for soft drinks sales – shoppers purchase 15 per cent more soft drinks than any other time of the year, with water, flavoured sparkling water and other flavoured carbonates seeing the most benefit.
The stay-at-home sales of last summer will this year be complemented by returning out-of-home sales – and there is a lot of socialising slack to take up after a year stuck inside. So watch out for bumper sales as friends and families get reunited in the summer months ahead – but at home as well as in the park.
“The balance of Drink Now and Take Home Soft Drinks changed during lockdown as social occasions moved to ‘in home’,” concludes Troy.“While we expect ‘food to go’ shopping missions to recover, the warm weather, combined with sporting events and longer evenings creates the perfect opportunity for retailers to continue to drive take-home sales by inspiring and exciting their shoppers.”
“We expect larger packs to remain in high demand this summer as people start to socialise again, with consumption in and around home likely to continue,” says Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP). “Value sales of our Coca-Cola multipacks are up 25 per centin independent and symbol stores thanks to the volume and value they offer, especially for consumers looking to stock up in a single shop. That’s why it’s important for retailers to find the right balance between on-the-go and at-home formats, keeping space for both as restrictions are eased.
In conclusion, Matt Gouldsmith, Channel Director, Wholesale, Suntory Beverage & Food GB&I says, “The soft drink category needs to cater for these changes. We know one-in-four shoppers are consuming more soft drinks, and that £143M has been added to the category through increased multipack sales during lockdown.”
Water, water everywhere
Two-thirds of bottled water sales in convenience pre-pandemic were small single bottles, according to Bestway’s Burchell.
Adrian Troy notes that plain water was significantly hit during lockdown, both from a Drink Now and Take Home perspective, with shoppers switching their spend into flavoured sparkling water,“as consumers are not prepared to compromise on taste when looking for healthier options. Flavoured sparkling water delivers 50 per cent more value through retailers’ tills so retailers need to ensure they have the right balance of products in their stores to meet shopper needs and maximise their sales.”
Barr’s Rubicon Spring remains the UK’s No1. sparkling flavoured water brand as a full taste, low calorie alternative that shoppers are increasingly on the lookout for. It is the bridge between the healthiness of water and the taste of carbonates and fruit drinks that seems to be a big oncoming trend and already Rubicon Spring sees sales double during the Summer months.
Health concerns (made more immediate by lockdown) and the concern for avoiding both alcohol and high-sugar drinks is helping flavoured water come on in leaps and bounds.
The drop in still-water sales was not however a sign that shoppers had simply stopped buying water, says Burchell, and he says that many shifted their previous on-the-go purchases to in-home. “This has driven a change in mission within the convenience channel, with shoppers three times more likely to be on a main shop mission now, than they were pre COVID,” he reveals.“Take Home formats have therefore performed particularly well, growing at +4.9 per centin value over 2020. Likewise, sparkling water has also been resilient throughout the pandemic, growing at +3 per cent, with shoppers bringing their social pub/restaurant occasions in home.”
What goes for soft drinks in general – larger formats taking up the slack from on-the-go impulse – also goes for waterand as life returns towards normal, small format sales are likely to increase once more, alongside higher levels of footfall in key on-the-go locations such as travel sites and high streets. Burchell says that with convenience whilst-on-the-go being the number one driver of purchase for the category, convenience stores are well set up to capitalise on this:“Availability of key market leading brands will be vital to re-capture these shoppers, so retailers should be looking to stock up on the best sellers.”He adds that it’s also worth considering increasing the visibility of the category through secondary sitings to drive impulse purchases, particularly once the warmer weather arrives (as we know temperatures over 15 degrees drive significant uplifts for the category).
The other element that affects and encourages sales of bottled water is the way that better packaging can lessen the consumer-guilt (pure water needs pure containers), such that recyclable bottles are made more available and should shout out their credentials so that packaging does not present a barrier to water sales.
Paul Hargreaves at Cotswold Fayre examples DA-SH water – infused tasty waters made with real, wonky fruit and packaged in aluminium cans and glass – and One Water for the premium and ethical end of the water category. One Water began with campaigning for H2O access in Nairobi and is now a movement funding sustainable clean water projects, and using only 100 per cent recyclable packaging (it encourages customers and consumers to recycle packs after use).
And as noted, health has become even more top-of-mind to consumers given the COVID context, including the continued growth of sugar-free options at +11 per cent in 2020, ahead others which grew at +6 per cent. “Water, as the healthiest way to hydrate, is best positioned to meet this need,” says Burchell.
Clearly Drinks’ Northumbria Spring, for example, a pure British spring water, will be launching in a brand new 330ml can format this April in both still and sparkling. Clearly says it is a more sustainable alternative to glass and PET bottled water and has new innovative technology to keep it tasting fresh from the first to the last sip (at an RRP 12 x 330ml: £0.79, 6 x 330ml: £3.00).
The crossover between water and juice –in the form of fruit-flavoured waters – has been well underway for some time now.
“Flavoured water continues to perform well as shoppers increasingly consider their drinks choices more carefully, and the growing focus on general health and wellbeing has led to an increased surge towards healthier drinking habits that is impacting the overall category,” says Clearly’s Marcus Hudson. “More and more consumers are actively trying to lead a healthier lifestyle, the demand for healthier alternatives to alcohol and sugary soft drinks is rising. The introduction of the sugar tax has encouraged shoppers to consider their drinks choices more carefully, and the growing focus on general health and wellbeing has led to an increased surge towards healthier drinking habits that is impacting the overall category.”
Volvic Touch of Fruit has now branched out in the direction of adding vitamins to its flavoured waters with the launch of Touch of Fruit Pineapple & Orange Vitality with added vitamin B6. According to Mintel, 36 per cent of people would like more information on how to improve their energy levels, and Marie Chaigneau, Brand Manager at Danone Waters UK & Ireland, says that “The new Volvic Touch of Fruit is a great option for them, as its added vitamin B6 helps to reduce tiredness and fatigue.” It is now available nationwide, in 1.5L (RRP: £1.10) and 6x 1.5L packs.
Highland Spring has also sprung into the canned sparkling water area this month, with its Highland Spring Flavoured Sparkling Water range that promises to make the consumer “feel a surge of sparkling fruitiness”.
Carol Saunders, Head of Marketing at Highland Spring, says that “The growth in the sparkling flavoured water category over the last year has been impressive. There is still significant headroom for more, with the provision of a well-known brand, such as Highland Spring, to drive awareness, trial and repeat purchase.”
She explains that there was a problem in the market where many premium flavoured waters were not meeting consumer needs.Taste being the biggest issue (they were a bit “watery”, perhaps) and that lack of flavour was driving low repeat purchase. “80 per cent of consumers said a fuller-flavoured drink from Highland Spring would be appealing, with the top three drivers for purchase being ‘natural ingredients’, ‘no added sugar’ and ‘no artificial sweeteners’,” says Saunders, so that’s what they came up with.
The new drinks come in at under 35 calories per can (naturally sweetened with fruit juice) and again eschew plastic by coming in cans – the canned sparkling flavoured water category has experienced encouraging growth in the last 12 months, she says, up 40 per cent to a total value of £4.9m: “We believe there is a huge opportunity for the category through launching our new Highland Spring Flavoured Sparkling Water range and these high quality products are a natural extension to our portfolio.”
Available in individual 330ml cans and 4 x 330ml multi-packs, the three Scottish-inflected country-style flavours on offer are Pear & Elderflower, Blackberry, Plum & Hibiscus and Rhubarb & Ginger, with a single can at £1.15 RRP and the 4x330ml Multipack (not available in Rhubarb & Ginger) at £3.25RRP.
Britvic’s Aqua Libra contains zero-sugar, zero-calories, is free from sweeteners and artificial ingredients, and is also suitable for vegans. This means it too is doing very well in the sparkling water category, as Phil Sanders, Out of Home Commercial Director at Britvic, explains:
“Aqua Libra is leading awareness in the infused sparkling water category, and looks to continue paving the way this year with a large-scale communication plan. The brand also launched a new pack design last spring to pull out the key health credentials and deliver ‘refreshment’ cues to those consumers looking for more natural products.”
In addition to this, he says, the clear colours used to distinguish the different flavours helps ensure the product stands out on shelf and is differentiated from other products in the category. “Following on from the re-brand last year, we also have big plans this Spring with the launch of a new flavour (Raspberry & Blackcurrant) in March and our first multipack format (4x330ml) in May, which will help attract more health-conscious shoppers to the brand and help retailers offer more choice in this area.”
Milking the category
Dairy drinks, especially in the warmer weather, when the delicious chill of milk or yogurt is utterly thirst-quenching, are well worth a retailer thinking about in terms of stocking and merchandising to best effect, a key point to remember being that although they are mostly ambient products, always keep single serves at least (and take-home multiples if there is space), on ice in the chiller – just to make them completely irresistible.
The category is on the rise: with 11.9 million households now buying milk drinks, household penetration is at a record high, up 4.2 per cent YoY. Across the UK, the total flavoured milk category is steadily growing with a total market value of £388 million at the end of 2020.
In addition, as Michelle Frost, general manager at Mars Chocolate Drinks and Treats’ (MCD&T)says, the total market value of dairy alternative drinks – such as oat- and soya-based milk drinks, for example – is now worth an impressive £361 million and shows no signs of slowing down,displaying a massive 30.4 per cent growth YoY. And within convenience, the category shows an even more extreme 40.3 per cent growth,with a value of £58.4 million.
The non-dairy appeal for vegans is really beginning to take off, and MCD&T’s non-dairy range, which includes Galaxy Vegan, Bounty Vegan and Mars Vegan. MCD&T’s Vegan Drinks range has sales now totaling £480,000, up 134 per cent.
“More than 500,000 people have signed up to Veganuary in 2021, surpassing 400,000 in 2020 and so we are delighted to be able to offer consumers additional ways to enjoy their favourite confectionery brands.” says Michelle Frost, general manager at MCD&T.
The drinks are available in a 250ml format, with no added sugar and registered with The Vegan Society.
Dairy drinks have the healthy and nutritious element in their favour, and drinks such as Mars Milk can hold their sweetness without being cloying because of the robustness of dairy. Plus, there is the ongoing move toward reduced sugar, as Frost points out:
“We hope the move to no added sugar in our milk and dairy alternative drinks categories will encourage shoppers to opt for their favourite confectionery brands in a chocolate drink – confident that we’ll deliver on flavour whilst meeting demand for less sugar.”
The full no-added-sugar 350ml Milk Drinks range includes Mars, Galaxy, Mars Caramel, MilkyWay, Bounty, Maltesers, Snickers and Twix.The full no-added-sugar 250ml Vegan Drinks range includes Mars, Galaxy and Bounty.
“While coffee flavoured milk was the only growth segment in 2020, chocolate flavoured milk remains the UK’s favourite flavoured milk, selling 95.3m units last year,” says Frost.“Chocolate also remains an important segment for convenience with a market share of 27 per cent and value sales totaling £43.6 million.”
Wayne Thompson, who is Business Unit Controller, OOH at FrieslandCampina, makers of YAZOO, “the number one traditional flavoured milk brand”, is also keen to stress the healthy appeal of dairy refreshment, not least the reduction in sugar in their flavoured products.
“We work to remind shoppers about the goodness of dairy drinks.” He says.“YAZOO sugar reduction plans are in line with PHE targets to reduce added sugar in milk drinks by 20 per cent. The plans also mean our milk drinks are no longer classified as HFSS and based on last year’s sales of over 37 million litres of YAZOO, we would have removed over 400 tonnes of sugar from being consumed” – all of which augurs well for the incoming HFSS legislation.“That’s the kind of action our consumers expect now,” he adds.
Dairy, being dense and nutritious to begin with, is an excellent medium to carry flavour without requiring massive boosts of sweetness to heighten taste. “Reduced levels of added sugar is a hot topic, with many brands now offering low or no sugar product alternatives as consumers are looking for healthy food and drink options,” says Thompson.“As a brand, it is important for us to drive the message that milk drinks like YAZOO offer many other nutritional benefits that soft drinks currently on the market cannot, including a source of calcium, protein and Vitamin B2.”
He also stresses that taste above everything else is what consumers are looking for (even more than health), so new flavours are paramount to stir consumer interest and enthusiasm. Perhaps that is why the latest innovation in taste is one that might normally curdle things (if you have ever tried adding citrus acid to milk). Yet examples of tart and sour dairy products – such as buttermilk – are fine forerunners of the latest YAZOO NPD: a limited-edition Choc-Orangeflavour, which anyway has the chocolate to add a sweet tone.
Chocolate orange as a flavour is a perennial favourite (and its popularity continues to grow, with a 52 per cent increase in UK search demand for the flavour vs. last year), so the 400 ml YAZOO PMP (£1, with a plain bottle at £1.15 RRP) is expected to fly off the shelves.
“Brits have been enjoying YAZOO for over 30 years, so we know we’re getting something right,” said Nick Higgs, Brand Manager at YAZOO. “Our market research identified chocolate orange as a trendy, future flavour – 32 per cent of consumers wanted to see the variant on shelves – so we listened! We’re sure that shoppers will love the merge of citrus and chocolate, it’s such a classic combination that will bring nostalgia and fun to flavoured milk in a way like never before!”
Adding fizz to life
The fizzy season is almost upon us, and as Laura Strapp, Ambient Buyer at Cotswold Fayre, says: “Soft drinks is an incredibly buoyant and important category for retailers. It is without doubt the category seeing the highest number of new products and brands coming to market. In terms of shoppers, we see two main types of behaviour – those who remain loyal to a particular brand, and those who are looking for something new and exciting to try!”
The lockdown has led to a well-documented revival of interest in traditional brands, perhaps as a comfort/nostalgia fix. But these brands are forging ahead in their own right, and Barr’s Adrian Troy lists both IRN BRU REGULAR and IRN BRU XTRA as key elements of the Barr summer drinks range alongside the Rubicon ranges, pointing out that IRN-BRU is the UK’s No.1 Flavoured carbonate brand. “It has one of the highest summer repeat purchase rates within flavoured carbonates,” he says, adding that IRN-BRU XTRA, (with zero sugar), delivered £20 million of sales nationally last year.
But for those stalwart fans who want the full strength, IRN-BRU 1901 has returned from the Edwardian past, reviving a sweet and delicious 120 year-old recipe served up in 750ml glass bottles. After a brief revival left fans desolate after stocks ran out, IRN-BRU 1901 is now here to stay.
It’s a brand great story: “The authentic 1901 recipe came from a handwritten recipe book, which was stored deep in the IRN-BRU archives for more than 100 years,” says Troy.“Its distinct difference comes from its ingredients – quillaia for a frothy head, sweetened only with sugar and containing no caffeine, although of course it still has the same top secret IRN-BRU essence!”
Another great British brand revivified by the new nostalgia and taking the country by storm is Nichols plc’s Vimto.
“Stocking well-known brands and best-sellers is key for retailers,” says Angela Reay, Brand and Innovation Controller.“Customers tend to gravitate towards brands that they know and trust, relying on them to provide the quality and taste reassurances that they love. This is demonstrated by our Vimto range, which has been ranked a top 10 brand in the off-trade across dilutables, RTDs and flavoured carbs , and highlights the importance of both choice and taste-reassurances.”
She points out that the Soft Drinks category is performing well, with 99.3 per cent of UK households having bought products in the category last year, and that take home sales in sectors such as Squash & Flavoured Carbonates have seen a significant uplift with growth of +24 per cent and +22 per cent respectively in convenience.
“By stocking a range of SKUs and format sizes, retailers can make sure they maximise this opportunity and ensure they are catering to a range of needs that extends beyond the ‘on-the-go’ occasion,” she says.“Larger formats have done particularly well and sales of our Vimto 6pck format increased by +15 per cent in impulse, which is bolstered by the variety of our take-home pack portfolio including our Vimto 2L fizzy bottle and squash range.”
Earlier this year, Nichols plc unveiled a new visual identity across the entire Vimto portfolio with a cleaner, bolder and more modern look. Having grown consecutively YOY for the past decade, Vimto is now worth £96.5 million and brand sales are up +6.7 per cent year-on-year, growing almost three times faster than the category.
For our customers, we place a lot of focus on the fact that they continue to stay loyal to the Vimto brand due to our products having a unique and distinctive taste that isn’t replicated or substituted by any other brand,” sums up Reay.
Suntory Beverage & Food GB&I’s Matt Gouldsmith says that last summer, typical trends and stats were heavily impacted by the effects of coronavirus. “This year retailers are better prepared to tackle the challenges brought on by lockdown, such as the change in footfall and shopping habits, by constantly reviewing their sales data and changes in restrictions.” He expects sales of larger formats and multi-packs to be popular this summer after having seen an increase in drink-later formats of 8 per cent over recent months: Multi-packs, for example, are driving growth of +9.4 per cent, he reveals adding that the concern for healthier lifestyles (45.8 per cent of soft drinks shoppers ) is benefitting Lucozade Energy (9.1 per cent growth), saying that retailers should ensure their chillers are stocked up on lower-sugar soft drinks such as Ribena Light and Lucozade Zero – now worth a combined £45.7M – “to capitalise on the ongoing trend towards lower-sugar choices this summer.”
Lucozade Zero has now expanded its range with the brand’s first ever flavour launch – Lucozade Zero Tropical. The Lucozade Energy range has already contributed a significant £60.7M worth of sales to the energy category, and last year introduced a “cool” new addition to its category-leading range – Lucozade Energy Citrus Chill. “The lemon & lime flavour is perfectly refreshing for the summer months, and is available in 380ML PMP and standard packs,” says Gouldsmith. Lucozade had entered the no- and low-sugar arena already last year with the Lucozade Revive sub-brand which was sweetened with Stevia, and has proven very popular.
Another well-known and well-loved brand doing very well for Suntory Beverage & Food GB&I is Ribena, which Gouldsmith says is helping retailers capitalise on the growing demand for interesting and great-tasting squash options. The new Ribena Raspberry & Rhubarb squash is available in 600ML bottles,designed for sharing, and are probably part of the reason why squash sales have experienced 25.8 per cent growth in the independent and symbol channel.
And now a sparkling form of Ribena has been added to the range. Ribena Sparkling Blackcurrant and Ribena Sparkling Raspberry are both available in 500ML and 2L bottles and – newly available – 330ML single cans. “Designed to sit alongside retailers’ flavoured carbonates range in the chiller – separate from Ribena’s core juice drinks – Ribena Sparkling is ideal for shoppers looking for exciting new flavoured fizzy drink options for barbecues and other summer occasions” says Gouldsmith.
And Britvic’s Robinsons brand is yet another “traditional” British brand benefitting from lockdown for manifold reasons (could it even be a Brexit bonus?)
“The pandemic has helped us all to reevaluate our priorities, with renewed importance especially placed on family mealtimes and socialising,” says Phil Sanders.“As part of this, we are seeing consumers turn to brands that they know, trust and love. Robinsons, the number one GB squash brand, is a prime example of this, having seen +27 per cent value sales growth during the first lockdown.”
The brand’s extended ranges – Robinson Fruit Creations and Robinson Fruit Cordials –means there is a product for each member of the family, he adds. Both have now been in the market for more than a year and have proven to be a phenomenal success. “At the top tier, Cordials has delivered a +6.6 per cent value and Creations is showing strong growth with a +13.5 per cent value.”
Other favorites also abide: “Within grocery and convenience, Coca-Cola continues to drive growth, led by Coca-Coca zero sugar, and Fanta remains the number one flavoured carbonates brand in GB,” says CCEP’s Amy Burgess. “Schweppes is the fastest growing major mixer brand in GB.”
This is confirmed by Bestway’s Burchell, who adds that, “Mixers have grown at +40.5 per cent during 2020 and are worth £2.4m. Shoppers are looking to replicate their out of home experience in home as Pubs and Restaurants are closed during lockdown. Schweppes is the #1 mixer brand and has grown at +50 per cent during 2020.
He adds that Lemonades have grown at +18.8 per cent and are worth £3.8m. Barr and Schweppes are the #1 and #2 Lemonade brands growing at +23.1 per cent and +16.4 per cent respectively.
“Schweppes remains a popular choice thanks to its rich heritage, distinctive taste and unmatched effervescence, worth more than £120m in retail and has increased value by almost a third over the last year,” says Burgess.
“We know that the rise of low/no sugar is a key trend within the soft drinks category that shows no sign of slowing down, says Britvic’s Sanders. “We have seen an increase in the value of low-calorie soft drinks (+9.4 per cent), so it’s vital to cater to those looking for low and no sugar alternatives of the core range, with products such as Tango Sugar Free and Pepsi MAX.”
He says that Cola is the second most consumed mixer with spirits and this is growing at a faster rate than overall cola consumption. “Pepsi MAX boasts an enviable flavour portfolio including Pepsi MAX Raspberry, and has become a £20m+ flavour extension.” He adds that Pepsi MAX Cherry is also going from strength to strength, delivering +23.9 per cent YOY growth:“Pepsi MAX flavours (Ginger, Cherry and Raspberry) now make up 53 per cent of the total flavoured cola segment and are all available in a range of formats that suit any, and every occasion.”
How to make it a soft drinks summer
As we said at the beginning, soft drinks are changing: health interests are encouraging lower cal and lower sugar NPDs, and as more adult enter the category, premiumisation and craft drinks are taking a bigger space in the chiller.
“Consumers are looking for innovation in soft drinks and today’s ranges are the antidote to the standard same old drinks fridge,” says Epicurium’s Michael Ratheram.“Retailers really need to embrace the new wave of adult soft drinks, low & no, and health-boosting ranges. The notion of ‘clean energy’ – not packed with synthetic ingredients and refined sugar like traditional energy drinks – is a term which has seen brands such as Virtue and Tenzing become big disruptors in the soft drinks category. Alkaline water for instance is set to become a multi-billion pound industry in the next 5 years.”
“It is important that wholesalers continue to offer retailers and shoppers choice in the products they buy,” says Kenton Burchell.“Shoppers prefer to make their own decision as to whether to buy regular or no-and-low sugar drinks and become frustrated when this decision is made for them. 25 per cent of shoppers are looking for a low or no sugar drink so it is important that these shoppers are catered for.”
Paul Hargreaves says: “Soft drinks offer one of the best rates of sale per sku, so without question retailers should make room for a vibrant mix of artisan and mainstream products – including a selection of ambient and chilled RTD options.”
He adds that the challenge is to offer everyone a choice, “which means dedicating space and time to the fixture, considering low sugar, natural sugar, milkshakes, dairy free, mainstream and artisan products.”
As we exit the lockdown and welcome long, hot (and thirsty) summer days, now is the time to plan your stock and chiller facings to get the most sparkle out of your soft drinks sales.