Flavour innovation and natural ingredients will drive category growth in the soft drinks sector but consumers will continue to seek out taste led, premium drinks, believes Paul Hargreaves, chief executive at fine food distributor Cotswold Fayre.
He was commenting on the prospects of premium speciality products post the imposition of Soft Drinks Industry Levy, commonly known as sugar tax.
With small artisan manufacturers (those producing less than one million litres of liable drink over 12 months), exempt from sugar tax, the price differential between premium speciality products and some mainstream brands might narrow a little encouraging convenience stores to look again at differentiated products.
“Much has already been written about the sugar tax seeking to discourage over-indulgence of sugary fizzy drinks, which of course is a good thing but soft drinks, certainly speciality soft drinks is very much a grown-up category with adults making informed purchase choices,” says Hargreaves.
With 76 percent of Cotswold Fayre soft drinks suppliers unaffected by the sugar tax, he continues: “We are not seeing an increase in demand for diet drinks, with either chemical or natural sweeteners but are seeing an increased demand for craft sodas such as Soda Folk, which do contain natural sugars such as pure cane sugar or maple syrup.
“However, the sugar content is, and I believe will continue to be, overshadowed by the fact that they simply taste amazing.
“As the old adage goes, a little bit of what you fancy does you good, definitely applies to the highly competitive soft drinks category.
“Flavour innovation, natural ingredients and products in glass bottles will continue to drive the category in the premium end of the category.”