The soft drinks category is evolving, and alongside traditional best-sellers, premium offerings are also forging a mainstream role. But are wholesalers making the most of their range? Helena Drakakis looks at the trends and innovations transforming the market
Percentage of consumers drinking soft drinks instead of alcohol at home
Sober is the new drunk. It’s no longer social suicide to nurse a soft drink on a night out, and the growth of health apps means monitoring alcohol unit counts has never been easier.
While alcohol is not off the menu, a new approach to drinking is evolving. In the same way that ‘flexitarianism’ is seeing a reduction in consumers’ weekly meat intake, particularly among millennials, indicators point to something similar happening in the drinks market.
According to analyst Mintel, concerns about high levels of sugar have given the premium soft drinks category a boost, with three in 10 consumers enjoying soft drinks as an alternative to alcohol at home and an equal number doing so in the on-trade. Rising alcohol prices, Mintel claims, are also contributing to the popularity of the soft drinks category, which, following a period of decline, is now moving into slight growth.
“Shoppers are looking for a premium, quality soft drink to enjoy, which has led to growth in the adult soft drinks sector,” says Amy Burgess, trade communications manager at Coca-Cola Enterprises (CCE).
But the trend is not only among millennials – consumers aged 30 and over are looking to be healthy, replacing sugary drinks with low-calorie, low-sugar substitutes; they’re also enjoying premium spirits, such as craft gins, with equally good quality mixers.
So, how can wholesalers capitalise on these trends and others in the soft drinks category?
According to Trystan Farnworth, Britvic’s commercial director of wholesale, soft drinks in leisure venues such as eateries and bars are experiencing double-digit growth, with customers seeking premium drinks and mixers alongside quality food. To get on board with this trend, Britvic has relaunched its range of mixers and juices, available in 125ml and 200ml bottle formats. Influenced by foodservice, consumers are also looking to the take-home market for inspiration.
“Premiumisation is a key trend. As people eat out more and the standard of what they eat and drink increases, they want to reflect that quality at home,” he says.
One of the fastest growing sub-categories is adult soft drinks, headed up by brands such as J2O, Bottle Green and Appletiser. “Our biggest innovation in this market is J2O Spritz,” Farnworth adds. “With a sparkling, clean taste it has been specifically designed to be paired with food.”
Grab and Go
As a result of changing, on-the-go lifestyles, the ‘hot-cold’ category is becoming a lucrative sub-sector for wholesalers, with iced tea and branded iced coffee increasing in popularity. Single-serve soft drinks formats are also driving footfall and retailers are reaping the benefits of increased basket spend. According to this year’s Britvic Soft Drinks review, 99% of soft drinks’ growth in convenience last year was driven by water, water-plus, energy, iced tea and coffee: “Water is one of the fastest growing soft drinks sectors, largely due to consumers becoming increasingly health conscious,” says CCE’s Burgess.
“Instant consumption formats are performing well, but future consumption sales are also growing, so wholesalers should look to stock a wide range of pack sizes where possible to provide choice for customers.”
Following recent high-profile campaigns, low-sugar, low-calorie and sugar-free drinks are also on the rise. Not only are there new carbonates on offer, such as Coca Cola Zero Sugar, but many manufacturers are also reformulating, with CCE alone investing £30m in healthier drinks. Already introduced into the market are the lighter soft drinks options of Monster Energy Ultra and Capri-Sun’s no added sugar variant.
Coconut water is now worth an estimated £100m in the UK, and this is fuelling further innovation.
Grace Foods, supplier of Aloe Vera drinks, is launching three products this year that have between five and 105 calories per bottle: Aloe Zero, Aloe Smooth and Aloe Refresh Smooth. Brand manager Giuseppe Vullo, says: “The health and sugar debate is continuing, and Aloe Zero and Aloe Refresh allow retailers to offer shoppers delicious and exciting choices when they’re looking for reduced or zero-sugar alternatives to carbonated drinks, fruit smoothies and flavoured waters.”
Cater for Events
The festive season is an important period for soft drinks, especially energy drinks, according to Boost, which is currently the second best-performing energy brand on volume, despite only being available in the independent channel. With potential sales from mixers and pick-me-ups for designated drivers, tired travellers and hungover party-goers, the party season gives wholesalers the perfect opportunity to increase sales.
Best-sellers include Red Bull and Monster Energy, and this year, Boost is looking to secure a share of the lucrative take-home market with its 1l original, sugar-free and exotic fruits bottles, on promotion at £1.
Aside from seasonal events, prominent sporting events are also a great time to cash in on soft drinks sales, with many suppliers offering larger take-home formats to enjoy with friends and family.
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Mix it up
Premium mixers in the leisure market have grown sales, with suppliers such as Frobishers, Fever-Tree and Fentimans joining the traditional offerings like Schweppes to provide premium soft drinks and craft mixer offerings. According to Britvic, in the off-trade, premium soft drinks are growing by 75% year on year. This looks set to influence the home market as consumers enjoy pre-dinner cocktails or aperitifs, or the trend for ‘mocktails’ filters through.
As well as Britvic’s revamped mixers and juices range, the company has also redesigned its heritage brand R White’s Lemonade. Schweppes, too, has revamped its 1l mixers pack design to showcase its premium credentials, as well as offering a line in sparkling juice drinks, including grapefruit & blood orange, orange & cranberry, and lemon & elderflower variants. Available in 750ml bottles, the range has an RRP of £2.
Tailor your range
In such a fragmented category, wholesalers are looking to rationalise their range. According to Matt Ward, category manager at Lucozade Ribena Suntory, wholesalers should give additional space to best-sellers to make these products unmissable.
He says: “There are typically five products in the c-store’s front chiller, representing the top 20% of category value: Coca Cola 500ml, Diet Coke 500ml, Lucozade Energy Orange 500ml, Red Bull 250ml Original and Monster Energy Original 500ml.”
Britvic’s Farnworth emphasises the importance of thinking locally. He stresses that there is no “one size fits all” approach: “Every depot is unique, from its size and layout, through to its location and customer demographic,” he says. “Wholesalers must consider the differing needs of their customers across both leisure and convenience channels to truly succeed in soft drinks.”
AG Barr national impulse controller Guy Gissing agrees, adding that the company works with wholesalers on analysing local sales-out data so that it can tailor its range rather than just seeing the national picture. “When this advice is followed, wholesalers and retailers can expect to see a significant increase in sales,” he says.