Category guide: Soft drinks

Focusing on independent retailers and the foodservice channel, Lee Graham reveals how wholesalers can turn soft drinks into hard sales.

Soft drinks give both foodservice operators and retailers a vital chunk of sales in what is a highly impulsive category with good margins. With the trend for low-calorie products being driven by the health agenda and copious amounts of innovation coming to market, there is plenty of room for wholesalers to improve their offers and drive sales.

1. Go ­low‑calorie

At a time when ever more restaurant menus are including calorie counts, it’s no surprise that all manufacturers report huge increases in the sales of low-calorie drinks.

Guy Gissing, national impulse controller at AG Barr, says: “Irn-Bru sugar-free is delivering sales of more than £1m every week. We’ve also launched low-calorie Barr Xtra Cola into the cola market. This market is now worth £1.6bn in total and wholesalers should note that 52% of this comes from low-calorie sales.”

Coca-Cola Enterprises (CCE) recently launched Coca-Cola Life, an alternative to regular cola containing a third less sugar and a third fewer calories. Dave Turner, trade communications manager at CCE, says: “Around 40% of all carbonated soft drinks sales come from light or diet variants, and the health-conscious trend looks set to continue.”

Lucozade Ribena Suntory recently launched a new Reduced Sugar Cloudy Lemonade variant to its Lucozade Energy portfolio. Category director Georgina Thomas says: “Consumers today are becoming more health-conscious in terms of food and drinks, and it is the role of the manufacturers, as well as the government, to focus on greater education and further encouragement related to consumption as part of a balanced lifestyle.”

2. Embrace new flavours

“Exotic flavours such as mango and coconut are growing in popularity, at 23% and 107% respectively. Wholesalers need to encourage foodservice outlets to broaden their offers, giving consumers a more diverse choice of flavours,” says James Logan, commercial director at Refresco Gerber.

Logan says that new flavours to try include Del Monte Mango & Papaya, Just Juice Mango and Um Bongo Tropical.

Emma Hunt, Vimto UK marketing manager, also notes the trend. “Over the years, consumers’ tastes have developed as they’ve experienced more flavours from other countries,” she says. “So it’s no longer a gamble to stock more than just standard colas and lemonades.

“The exotic flavours of Caribbean Crush and Tropical Punch in the Levi Roots carbonates range enable foodservice retailers to offer more options. They also make exciting mixers for cocktails.”

3. Pick the top sellers

Don’t forget the bestselling brands, particularly those driving the category forward through innovation, growth and investment in marketing.

Last year, CCE delivered £96m (40%) of the value generated by innovation within soft drinks. This has been bolstered by the launch of Coca-Cola Life, plus significant marketing spends on its Coke Zero and Glacéau Smartwater brands.

Jucee owners Princes have revealed growth of “well over 50%” in terms of both volume and value over the past two years. Meanwhile, AG Barr – which owns brands that include big sellers Irn-Bru and Rubicon – has seen its value grow by 8.7%, ahead of total soft drinks market growth of 1.7%.

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