A raft of convenience-friendly formats, such as slimline cans, 1.75cl bottles and smaller take-home packs, have entered the soft drinks market over the past 18 months, helping wholesalers’ customers ramp up their sales.
Friendly formats: The difference between retail and foodservice.
Top tips for wholesalers:
- Keep it cool: Encourage foodservice and retail outlets to offer chilled soft drinks.
- Support new products: New products accounted for 17% of market growth last year. Educate retailers about the importance of innovation, as only 33% of stores support NPD.
- Deals deals deals: Suggest to retailers that they offer soft drinks as part of a meal deal.
- Better ranges: Encourage foodservice customers to introduce new flavours as they often have a limited range of drinks.
“Wholesalers play a fundamental role in helping independent retailers select the most appropriate range of products from the market and to understand which products would be best suited for the individual needs of their stores,” says Georgina Thomas, category director at Lucozade Ribena Suntory.
On-the-go formats are incredibly important – particularly for small retail outlets and catering customers – but Scott Dickson, Highland Spring senior brand manager, says take-home formats are also hugely valuable. Nestlé Waters category development manager Ammad Durrani agrees, pointing out that consumers are buying multipacks at their local c-stores more regularly. Many suppliers have reduced the numbers of cans and bottles in their multipacks to meet this need.
An important format specific to the retail channel is price-marked packs, with more than half of the growth in the soft drinks category being driven by them.
“With 57% of shoppers looking more closely at the prices of products before deciding what to buy, it means PMPs and promotions are also high on the agenda for retailers when in depot,” explains Lucozade’s Thomas.
But for the foodservice sector, Guy Gissing, AG Barr national impulse controller, recommends wholesalers stock a range of unmarked soft drinks in the right pack formats. “Foodservice customers are looking for premium pack formats in single-serve and large glass bottles,” he says.
Healthy options: Flavoured water grows 18.5%
Retailer viewpoints:
Mr Singh, Lifestyle Express, Smethwick, Birmingham
Better Wholesaling recently spent a day in Mr Singh’s store. He said that Aloe Vera drinks were one of the fastest-selling soft drinks in his shop.
“We started off with just one flavour variant but now we have three – we’d like to stock more but there isn’t enough room!” Read the full blog at www.betterwholesaling.com/lifestyle-express/
David Willey, trade communications manager at Red Bull, says one of the fastest-growing segments in the soft drinks market is low calorie and diet. “71% of consumers claim it’s more important than ever to be healthy,” he says. “Health is increasingly a barrier to energy drinks, with the number of people saying it would stop them purchasing from the category rising from 20% to 25%.”
Red Bull launched Zero Calories earlier this year to tackle this issue, while Boost Sugar Free Pink Lemonade has just joined the market, capitalising on the trends for lights and flavours.
Jon Evans, marketing director at Purity Soft Drinks, says wholesalers have a big opportunity to maximise sales by providing healthier drinks.
“Over the next 12 months, there will be a continued focus on healthier products that are convenient and provide great value for money,” Evans says. “Sugar content in soft drinks will be lowered or replaced with ‘healthy’ alternatives such as stevia.”
“Around 40% of all carbonated soft drinks sales come from light or diet variants, with sales worth over £1bn to retailers last year, growing 2.5%,” says Dave Turner, Coca-Cola Enterprises trade communications manager.
Highland Spring says it’s the increased focus on health that has helped unflavoured water sales rise 18.5% in the past 52 weeks, compared to the same period last year. Giles Brook, Vita Coco Europe CEO, adds: “Consumers are naturally gravitating towards healthier alternatives such as coconut water.”
Get fruity: Exotic flavour variants have grown 17%
Exotic flavours have seen rapid growth in recent years in the soft drinks market. Mango drinks are now outselling apple drinks by 18%, while in juices, exotic flavours have grown the category by 17% in the past two years.
AG Barr’s Gissing says that as the UK becomes increasingly regionally and ethnically diverse, wholesalers need to understand their local area’s needs and cater for them in-depot. “The best way for wholesalers to achieve this is to know their depot ‘sales out’ performance and trends as well as understand regional and national trends, as these may differ greatly,” he adds.
The number of flavours in the burgeoning energy market has also rocketed. “Flavoured energy has been in strong growth and now accounts for a quarter of all the value sales in independents,” says Red Bull’s Willey.
Think sport: Capitalise on summer events
Lucozade’s Thomas says supporting big events and seasonal occasions in-depot can create excitement, which can be replicated in stores, cafés and bars.
CCE’s Turner says the category can really benefit from the FIFA World Cup. “Soft drinks experienced more sales uplift than any other immediate consumption category during the 2010 World Cup,” he says.
The Commonwealth Games in Glasgow is also expected to boost soft drinks – during the 2012 Olympics in London, the category benefited from a 10% uplift.
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