Wholesalers must tap into the opportunities in healthy hydration drinks, and out-of-home leisure if they want to succeed in a challenging market, says soft drinks giant Britvic.
According to the company’s soft drinks market review, which was released last week, the foodservice and leisure channel saw growth of +3.3% over the last year due to an increasing trend for eating out and a growing consumer desire for more premium experiences.
Across the board, plain water was a star performer, with a rise in value sales of +7.5%, while water-plus drinks, like flavoured water, and energy drinks also performed well in the market.
“Hydration will be the defining trend of the next ten years. Inflation and innovation are the two things that will drive growth in soft drinks,” said convenience and impulse commercial director Trystan Farnworth.
Dominating much of the review was the potential impact of the upcoming sugar levy, due to come into force in April 2018. Farnworth confirmed that Britvic would be passing the cost on to its customers. Whether they then pass the cost on to their customers is at their discretion, he said.
Paul Graham, Britvic managing director, added: “The sugar levy will have an impact – it has the potential to cause one of the biggest disruptions to the category we’ve ever seen.
“We can already see trends for water and healthier drinks – and the price differential the tax potentially puts into the category will only accelerate that further. The retailers that will win and succeed in that market will already be adapting their range.”
Britvic confirmed that it would be continuing its programme of reformulation with 70% of their soft drink volume sales now in low or no sugar variants.
However, Graham stressed that the majority of customers’ purchasing decision remained largely centred around taste.
The top five soft drinks brands in growth were Red Bull, Ballygowan, Glaceau Smartwater, Pepsi, and Monster.