If this summer is half as warm as the last one, demand for soft drinks and alcohol will go through the roof so keep those chillers fully stocked.

With 2018 widely touted as the hottest summer on record, figures from Kantar Worldpanel for the 12 weeks to 9 September 2018 show it was an indulgent one for consumers.
Spanning the World Cup kick off in June through to the August bank holiday and beyond, the figures show consumers spent £228 million more on alcohol, £178 million more on soft drinks and £74 million more on ice cream, while the overall market grew by 3.8%.
The warm summer was kind to convenience stores as consumers shopped locally for drinks and barbecue supplies, collectively growing sales by 7.6% compared to the previous year.
Another warm summer will see demand for both alcohol and soft drinks skyrocket, so independent retailers need to merchandise their chillers to be ready.
The opportunity for additional sales during the summer is clear, with consumers out and about more during warmer weather and looking for their favourite soft drinks brands to drink on the go. In fact, in 2018 soft drink sales in independent convenience stores were up to 84% higher in July than in January, for example (IRI). This translates into a substantial additional sales opportunity for independent retailers throughout the warmer months.
A spike in sales can be expected at this time of year regardless of the weather, but when the sun comes out this can be boosted even further. For every 1-degree temperature change, soft drink sales increase by +1.6% (IRI). “This makes it hugely important for retailers to have their impulse soft drinks range ready for the added demand as the weather gets warmer,” says Matt Gouldsmith – Channel Director, Wholesale at Lucozade Ribena Suntory (LRS).
Building further on this ongoing trend, LRS has also recently conducted a major piece of research that reveals there is an opportunity to grow the soft drinks category by £1.4BN. The research identified six key category drivers and the simple changes to shopper behaviour that could fundamentally alter the value of the soft drink sector, including the opportunities around tastier, healthier refreshment for consumers and their increasing interest in leading active and effective lives. If wholesalers can tap into these category drivers through their offering in depot, they and their retail customers will reap the additional sales benefits.
“We advise retailers to follow simple category advice during the summer to maximise this important sales opportunity,” adds Gouldsmith. “Focus on Layout, review the Range regularly and Stock up frequently. Empty chillers in the summer could cause shoppers to go elsewhere, so keep the stockroom full to allow quick restocking during busy periods. The layout in the chiller is more important than ever in the summer when shoppers want to find what they’re looking for quickly and easily. SKUs should be brand-blocked with a minimum of two facings per flavour, and more for a best-seller like Lucozade Energy, Lucozade Sport or Ribena.”
The soft drinks category has always enjoyed success in the UK, with bottled water remaining the biggest segment within the total soft drinks category, accounting for 1 in 3 sales (Kantar). The category continues to attract NPD, with consumers seeking innovative new products.
Furthermore, with dental health and obesity two key health issues impacting the nation, the category has anticipated and adapted to meet consumer trends, including the rise in bottled water consumption. With bottled water worth around £1.2bn in the UK (IRI), this is a peak opportunity for retailers to attract more people to the category, and more regularly.
“As we approach the summer months, we can expect more consumers to turn to bottled water to stay healthy hydrated,” says Ammad Durrani, Head of Category & Shopper Development at Nestlé Waters.
With three quarters of the population drinking bottled water (Kantar), it was no surprise that 2018s summer heatwave led to a strong increase in water sales.
There is still plenty of headroom for growth. Research demonstrates that the majority of Brits (70%) recognise that they still do not drink enough water (GlobalData), marking a great opportunity for retailers to optimise water sales by encouraging people to drink water more regularly.
“In particular, our Buxton range is the #1 water brand in convenience in terms of rate of sales, and continues to help retailers capitalise on this demand during summer months with 50cl and 75cl ideal for the on the go consumption,” adds Durrani.
We can also expect to see continued growth in ‘zero’ and ‘diet’ products across the wider soft drinks category, following the introduction of the government’s soft drinks sugar levy in 2018.
“The launch of Perrier & Juice last summer provided health-conscious consumers with a low-calorie, naturally-flavoured refreshment,” comments Durrani. “The range offers three exquisite and exotic flavour combinations – Strawberry & Kiwi, Peach & Cherry and Pineapple & Mango, providing consumers with the classic qualities of Perrier, paired with a hint of flavour to excite taste buds.”
Making sure that enough space on water is allocated the chiller to leverage demand, water should occupy 20% share in the chiller based on its volume contribution to soft drinks sales, suggests Durrani.
“The main occasions for shoppers to buy water in convenience are either for instant refreshment, or to consume while on the move,” Durrani adds. “So it is important for convenience retailers to sell 50cl and 75cl bottle formats enabling their customers to consume water instantly.”
There is also a great opportunity for retailers to drive sales through secondary display. “Strong product visibility in-store is a crucial driver of sales, insight which led to the recent launch of “The Buxton Box” containing 15 x 75cl Buxton bottles- an innovative way to enable retailers to create easy to merchandise and stack secondary displays,” says Durrani. “The Buxton box gives incremental space for retailers where space in the chillers can be limited. Secondary displays such as this are particularly effective at interrupting shoppers on their journey around the store, and will drive impulse purchases whilst also keeping water front-of-mind for shoppers.”
Wine
South American wine is growing really strongly; in fact wines from Chile and Argentina combined just overtook Italy as the second biggest region of origin for still wine sales in the UK. Concha y Toro (CYT)’s brands Casillero del Diablo and Cono Sur from Chile, and Trivento from Argentina, are all in strong growth.
Malbec is becoming one of the most popular red wine varieties. It has just overtaken Tempranillo (which is the main grape in Rioja) as the 3rd most popular red variety.
Rose will continue to grow, especially the more lightly coloured styles, CYT believes. Aromatic white wines such as Viognier are becoming more and more popular. Viognier grew at 16.6% in the past MAT, and is now worth almost £21 Million in retail sales, CYT says. Cono Sur Bicicleta is the UK’s #1 selling Viognier.
The key thing for independents is to offer a focused range of wines which include all the customer favourites – Sauvignon Blanc, Cabernet Sauvignon, Shiraz, Pinot Noir, Malbec and so on, CYT suggests. The company has a free advice tool, WineWise (www.wine-wise.co.uk) which helps retailers ensure they’ve got all bases covered. Don’t be seduced into having 100s of single facings of wines, fewer wines in multiple facings will help your sales dramatically, says CYT.
Concha y Toro continues to invest in its leading brands, and consumers will see campaigns this year for Casillero del Diablo, Cono Sur and Trivento.
One example is Cono Sur and Food Network. CYT is offering recipe ideas to match with its Bicicleta range with on neck collars across the whole range.
“It’s no secret that the UK wine industry is evolving and that the structure of the market continues to change,” comments Kirstie McCosh, Marketing Director, Europe, Treasury Wine Estates.
However, wine performance is currently flat and consumers are being recruited into other drinks categories like gin and cider. In particular, the penetration of under 35’s has fallen below the drinks industry average and is declining significantly year on year. Under 35’s now account for 23% of the adult population; they deliver 13% of total grocery sales and 7.5% of alcohol sales, but only 5.5% of wine sales. This is the next generation of wine drinkers. In the coming 10 years they will account for a third of all adults. Failing to inspire them or attract them to the wine category will lead to a 3% penetration drop.
“At Treasury Wine Estates we are very focused on migrating consumers back into the category and are using research and insight to identify opportunities to engage them in interesting conversations around wine,” adds McCosh. “We’re creating engaging brands and using technology as a talking point, whilst making it as easy as possible for consumers to explore and move through the category.”