The soft drinks category grew 2.4% in value in 2007 despite challenging market conditions, according to the Britvic Soft Drinks Report 2008.
The report showed that across all channels cola, pure juice and juice drinks remain market leaders in both value and volume. The strongest growth was seen in the glucose and stimulant drinks, smoothies and sports drinks sub-categories, highlighting the continued importance of better-for-you choices, coupled with consumers’ increasing desire for functional benefits (such as enhanced vitamins, minerals, electrolytes or energy).
Andrew Richards, customer management director of Britvic, says: “2007 was a challenging year for the industry. However, soft drinks manufacturers are adept at anticipating and adapting to change and we gave ample proof of that in 2007, maintaining growth in sales value despite the difficult market conditions.”
Coca-Cola Enterprises says that despite the recent headlines around the decline of the carbonated soft drinks (CSD) segment, the total CSD category grew +7.5% in value and +2.9% in volume over the past 12 months. Coca-Cola remains the best selling soft drink in the UK, worth over pound;500m and currently in +7.7% growth.
Following the launch of Coke Zero in 2006, CCE also launched Fanta, Sprite, Lilt and Dr Pepper Zero, and the Zero range is now worth more than pound;100m in sales by UK retailers.
Kieran Hemsworth, vice president of marketing at CCE, says: “The soft drinks category remains in growth and as category leaders we have a real responsibility to drive this market. With consumer tastes changing, we are seeing more demand for wellness products and affordable luxuries, along with the need for products that are suitable for time poor shoppers. We continue to develop innovative drinks that will suit consumer preferences and to support them in a way that drives consumer trial and demand.”
Caroline Jacomb, channel marketing manager of Red Bull, says: “There are 3.4 million Red Bull brand lovers who are cola drinkers, not energy drinkers. Bringing in Simply Cola will invigorate the category.”
The launch of Simply Cola is designed to grow the market and offer consumers another choice in cola. According to Red Bull, it is from 100% natural sources and is the only cola which contains both the original Kola nut and Coca leaf.
Nigel Trood, managing director of Red Bull UK, says: “This is an incredibly exciting innovation for Red Bull and a fantastic addition to our portfolio. It may have been unexpected, but we’re quite fond of surprising people and we thought it was about time we refreshed the cola category. For 20 years consumers in the UK have been using Red Bull Energy Drink when in need of a lift and we are now pleased to offer a premium and completely natural Cola for when consumers are in need of refreshment. It has taken us years to create a product that we felt was of the highest quality and worthy of the Red Bull name.”
According to Appletiser, it achieved 37% growth year on year and is helping to drive incremental category growth. The product is a 100% fruit juice, and has the Government’s 5-a-day accreditation.
Appletiser says it experienced an unprecedented volume growth of 17% in 2007, becoming the fastest growing adult special soft drinks brand.
Building on this, Appletiser has launched Fruitiser, a range of three sparkling fruit juice blends in both 275ml and 750ml formats. Fruitiser is available in Apple Dragonfruit, Pomegranate Raspberry and Mango Mandarin and is following Peartiser which was launched last year.
Sally Marshall, marketing manager for the Appletiser brand portfolio, says: “Like Appletiser and Peartiser, the Fruitiser range will be a stylish, adult alternative to alcohol but will instead target a younger audience of women between the ages of 18-30. Developed especially for the UK market to be the ‘younger sister’ of Appletiser, the range of fruit combinations will be the perfect accompaniment to food or refreshment when on a flirty night out with the girls.”
This year Shloer is celebrating its 70th anniversary in the UK. It says it is now the number one table-top soft drink in the take home market and in the past year alone has sold more than 15.8 million bottles.
Mike Coppard, managing director of Shloer, says: “With so many years of success the brand is continuing to grow, Shloer really is a retail success story. During the last 70 years, many carbonated drinks have come and gone, but Shloer retains a faithful following and is becoming more relevant to a younger audience than ever before. Today, customers are more interested in what goes into and what’s left out of products and, as Shloer is a natural product with no additives, we are ideally placed to be an important player in the adult soft drinks category for many more years.”
The Britvic Soft Drinks Report 2008 says that sports drinks continued to grow well, up 16% to pound;154m, riding on the crest of the health and wellbeing wave, of which exercise is an integral aspect. As consumers looked to drinks with functional benefits, glucose and stimulant drinks were the big success story. New buyers flooded into the sub-category and 31% of the British population now buy glucose and stimulant drinks at least once a year. Sales value grew 25% to pound;481m, making this the fourth biggest sub-category with an 8% market share.
Mark Sterratt, category controller of GlaxoSmithKline, says: “Sports and energy drinks are certainly the category heroes with impressive growth rates. This success is due to the fact that these products meet the consumer need for drinks that deliver functionality – whether that is a mid-afternoon energy boost for a tired office worker or a performance boost for someone playing sport. I’m pleased to say that our Lucozade range is a significant contributor to this growth.
“Busy consumers choose outlets which best fulfil their needs. This choice is based around factors such as convenience, type of format, range and offer. Almost 50% of soft drinks sales are made between 11am and 2pm, so availability is absolutely key for retailers at this time of day. Our research with one of the leading c-store chains proved that focusing on achieving 100% availability during this key period alone could boost sales by 32%.”
GSK has launched Lucozade Alert, its first stimulation drink. The drink is designed to provide mental as opposed to physical stimulation. It contains caffeine to sharpen mental performance and stimulate the mind. Lucozade Alert was designed in conjunction with office workers to offer a stimulation drink to combat energy lulls at work.
Sterratt adds: “Around two thirds of what we sell through the wholesale and independent channel is for impulse products to be consumed more or less immediately – during lunch, on the way to a football match, going down the high street, or a sports drinks to put in the kitbag on the way to the gym. So it’s vital to have the right range of drink-now products and also have them in a state in which they can be drunk now – in other words, chilled.”
Caroline Jacomb says: “Whether a person is playing sport, working long hours, or driving somewhere, Red Bull can increase endurance, stimulate metabolism, increase alertness and improve concentration and reaction speed. People want to get more out of their busy days and look at what they drink to help maximise this – Red Bull can help them meet that need.”
According to Red Bull, it has a 27% value share of the UK sports and energy sector and is also the number one selling soft drink by value in impulse with a 30% share.
Red Bull Sugarfree was launched in 2003 and will be a key focus for Red Bull in 2008. The Sugarfee variety contains eight calories a can and Red Bull says almost one in five cans of Red Bull sold are Sugarfree, presenting an opportunity for retailers to capitalise on.
Another development, the 355ml Big Can has seen growth as Red Bull says it is now a top 10 fastest selling soft drink SKU in impulse by CROS (cash rate of sale). A successful sports and energy NPD launch in 2007, it delivered over pound;11m in incremental value sales by December last year.
Jacomb continues: “2008 is set to be one of Red Bull’s biggest and busiest ever years with a number of exciting projects in the pipeline. A planned 15% increase in marketing support will boost Red Bull’s promotional spend to pound;25.3m.”
The Red Bull Air Race will be taking place again this year with Red Bull reporting figures of more than 32.5 million cans sold during that month last year.
According to Coca-Cola Enterprises, it is now the number two player in sports and energy with an 8.7% share of the market. Interest in the segment is growing with consumers, and the growth of Relentless and Powerade has added pound;21.5m to the segment over the last year.
Kieran Hemsworth, vice president of marketing at CCE, says: “Energy is a hugely exciting opportunity for the UK soft drinks market. As soft drinks category leaders we are committed to adding growth to the segment and will continue to invest significantly in further growing Relentless. We will be investing pound;5m in multi-media activity this year which includes; above the line activity, sponsorship and experiential sampling aligned to core action sports, motorbike racing and modern rock music. All sponsorship will be relevant to the Relentless target audience of men aged 18-40.”
Relentless was launched in 2006 and joined by Relentless Inferno and Relentless Juiced, with a 50% juice content, last year.
CCE says, consumer interest in energy drinks is growing due to busier lifestyles and the market itself has grown by pound;87.7m. In the last 12 months Relentless has driven 19% of the segment growth. It is currently worth more than pound;22.7m and is growing at +316% largely due to new product innovations introduced over the last year.
PepsiCo and Britvic have announced the roll-out of Gatorade in grocery, impulse and leisure channels this month.
Arif Haq, Gatorade brand manager at PepsiCo, says: “Apart from its unique and unparalleled scientific heritage, Gatorade is also one of the world’s most iconic sporting brands. It is exciting to introduce it to the fast-growing UK category.”
Responding to consumers’ increasing preference for more natural products, the UK will be the first global market to launch a new formulation of Gatorade, which will contain no artificial colours, flavours or sweeteners and no preservatives. It is available in orange and lemon.
Simon Stewart, marketing director of Britvic, says: “With its unique optimal scientific formulation that is now free from artificial colours, flavours, sweeteners and preservatives, we believe Gatorade provides an unrivalled offering to the existing big players in the market and will therefore unlock considerable potential in the sports drink category.”
Neal Haworth, soft drinks category marketing manager at Aimia Foods, says: “There has been a significant rise in demand for healthier drinks across the soft drinks sector. This is due to increased consumer knowledge and an ever growing concern surrounding additives and the associated health risks. We have produced our new hypotonic sports drink, Slazenger S1, to meet these exacting consumer needs.”
The sports drinks are designed to aid both physical and mental performance.
Haworth adds: “We know there is a huge market out there for functional drinks, and have understood exactly what our customers want before launching.”
Andrew Richards, customer management director of Britvic, says: “In 2007 premium and healthier options as well as drinks offering functional benefits delivered substantial value growth and offset the 2% drop in volume. The ongoing consumer trend towards better-for-you drinks saw a strong performance from smoothies, sports drinks and pure juice, with pure juice now sitting just behind cola, the largest sub-category, in value.”
According to the Britvic Soft Drinks Report 2008, pure juice continued to snap at the heels of the category leader with 5% growth to take 17% of the take-home market. Smoothies were again the fastest growing sub-category with 31% rise in value but failed to duplicate their 2006 success of doubling growth.
According to PepsiCo, the total chilled juice category is worth more than pound;1bn and is growing at 12.9%. In impulse, juice is worth pound;107m and is growing at 8%. Tropicana is the number one juice brand and now the fourth biggest soft drinks brand.
PepsiCo has launched Tropicana Smoothies to build on its reputation for premium juices. It aims to introduce loyal Tropicana customers to smoothies and attract new smoothie drinkers to the sector.
PepsiCo says that independent research reveals people who regularly drink smoothies are nearly twice as likely to get their recommended five or more portions of fruit a day of which each 250ml Tropicana Smoothie provides two of these portions.
Mary Barnard, managing director of Tropicana, says: “The smoothies sector is the fastest growing in the soft drinks market and now consumers are looking for a name they trust to offer greater choice in the chiller cabinet. We believe this sector of the market could be worth pound;300m in just two years time so retailers need to review their soft drinks range now to ensure they are offering the types of products and brands their shoppers expect to find.”
PepsiCo has also repositioned PJ’s Smoothies with a lower price point and repackaging of the four flavours.
Britvic has introduced a 250ml pack to its Robinsons Smooth Juice range. It is 100% pure juice, blended with a hint of barley to provide a smooth less acidic texture and each serving counts as one of the recommended 5-a-day portions.
Tom Dalton, brand controller of Robinsons, says: “We have recognised increasing consumer demand for soft drinks that are both healthier and convenient, and this presents a good opportunity for the Robinsons Smooth Juice brand.
“The average UK consumer currently consumes only half of the recommended portions of fruit and vegetables per day, despite 20% claiming that this is their main concern for healthy eating, and only 10% of consumers are getting all five recommended portions. The introduction of Robinsons Smooth Juice 250ml will provide consumers with a convenient, healthy and great tasting choice in the pure juice category.” .
The Britvic Soft Drinks Report 2008 says that Innocent was one of the fastest growing brands in the Top 10, up 46%, reflecting industry trends. Innocent reports that it is the number one smoothie brand in the UK with a market share of 73%, with a turnover of pound;100m in 2007. It makes smoothies with 100% whole crushed fruit, and each 250ml bottle contains at least two whole portions of fruit.
Giles Brook, commercial director of Innocent, says: “The four consumer macro trends shaping future landscape are health/wellbeing, indulgence, ethical and convenience. Innocent delivers on all four of them.”
He adds that chilled products are difficult in wholesalers and cash and carries, so the focus is on education through leaflets, offering support with POS and case and consumer deals and sampling days.
Innocent’s range, includes a smoothie of the month, this month is Pineapples, Blueberries and Ginger, as well as various environmental campaigns. Last year Innocent ran a buy one grow one tree campaign. Every carton of Innocent smoothies sold and registered on the website resulted in a planted tree in India. Innocent planted 164,020 trees and has decided to run the campaign again this year starting this month.
From January this year all of Innocent’s fruit smoothies are available in 100% recycled bottles, following an initial trial in September 2007.
Jessica Sansom, sustainability manager at Innocent, says: “We’ve always been a business that has taken our environmental impact seriously, and this move to 100% recycled content in our bottles is extremely exciting. As a result of our efforts, Innocent will be saving over one thousand tonnes of CO2 this year which is great news for the planet.”
GlaxoSmithKline has entered the pure juice category with Ribena 100% Pure Juices, its first new range for three years. They contain nothing but juice and are available in two flavours, Blackcurrant Blend and Raspberry and Blackberry Blend.
This fruit juice is designed to open up new usage occasions for Ribena, such as breakfast, and enhance the brand’s positioning among young adults. The juices are naturally rich in antioxidants and each 250ml serving counts as one 5-a-day portion.
Ruth Irving, senior brand manager for Ribena, says: “This is our biggest ever launch. We’re taking the things Ribena does really well – unique taste and British blackcurrant expertise – to bring consumers a brand new product with strong health credentials. Consumers are looking for healthier options but they don’t want to compromise on taste. Three out of four consumers in our trials said they would buy Ribena 100% Pure Juices in addition to products they already buy – meaning a massive incremental sales opportunity.”
According to the Britvic Soft Drinks Report 2008, after double-digit growth in 2006, sales of water plus, water with flavours or functional benefits, declined 11% to pound;154m, mostly driven by flavoured water. However functional water, which offers added benefits such as vitamins or energy, performed well, benefiting from the increasing consumer preference for added benefits with growth of 94%, albeit on a small base of pound;2m in value.
Danone Waters says the total UK bottled water segment is currently worth over pound;610m in annual sales and represents 10% of the total UK soft drinks market. Danone Waters accounts for almost 40% of total sales, Evian has a 17.1% share of the category and Volvic has a 13.2% share.
Steven Flanagan, grocery customer marketing controller at Danone Waters, says: “In terms of immediate consumption, if the temperature rises from 14OC to 25OC, retailers will see a 75% increase in sales, and if the temperature rises to 30OC, water sales will increase by 125%, making it imperative to be fully prepared with the water chiller correctly merchandised for the hot summer months.
Danone suggests three key areas where wholesalers can make a difference to the profits from their bottled water display: focusing on the availability of water brands, especially during the hot summer months, wholesalers can notice a significant difference in their sales; focusing on stocking the best selling brands and supporting key campaigns; and using clear and engaging communication.
Flanagan says: “Wholesalers need to be aware that bottled water is now seen as a soft drink and a drink of choice, and so needs to be given the space in-store that it deserves. Brand names are increasingly becoming a factor in the consumers’ decision-making process, so stocking the best-selling brand is imperative.”
Danone Waters has also launched its one litre for 10 litres campaign with Volvic. For every litre of Volvic Natural Mineral Water or Volvic Touch of Fruit purchased in the UK, Volvic and charity partner World Vision will provide 10 litres of clean, safe drinking water in six countries across Africa.
Rebecca White, head of marketing at Nestl eacute; Waters, says: “The industry has had to face criticism in recent months with assumptions about environmental impact clouding the consumer message, but bottled water remains the informed healthiest choice in consumer hydration. With an economic recession anticipated, the need is for the category to drive better value for money, in ensuring consumers have the best formats, and more local options to build confidence that they are purchasing a healthy and sustainable product.”
Mark Arnold, senior business development manager, adds: “The wholesale channel is a very important channel for Buxton, Vittel, Perrier, S. Pellegrino and Acqua Panna as it allows the brands an essential route to market to the thousands of independent retailers, hotel and catering customers across the UK. Nestl eacute; Waters supports this channel with on-going flash packs, promotions and key sponsored events.”
Both Vittel and Buxton ran a detox campaign in January as well as a free prize draw linking with the London Marathon from Vittel. Buxton Mineral Water is supporting the MSYS campaign for the first time this year with activity during National Independents’ Week.
=== 10 key facts about the soft drinks market ===
1. Despite the worst summer on record, soft drinks grew 2.4% in value to pound;8.5bn
2. Over two years, soft drinks increased take-home sales value by 11%
3. Healthy, premium and functional drinks drove take-home sales up 2.8% to pound;6.07bn
4. With on-premise sales up 1.3% to pound;2.4bn, soft drinks outperformed beer and spirits
5. Cola grew sales in all channels and remains the largest soft drinks sub-category
6. Drinks with functional benefits are booming in take-home, with glucose and stimulant drinks up 25% and sports drinks up 16%
7. Top trends shaping the market are: health and wellbeing, indulgence, ethical values and convenience
8. In 2007, 69% of consumers said they preferred foods that were natural versus 50% in 2000
9. 85% of consumers now buy premium brands at one time or another
10. Health and wellbeing is a global trend – sports drinks, bottled water and functional water grew in the US, Ireland, Germany, France and Australia.
Source: The Britvic Soft Drinks Report 2008.
=== Buyer’s viewpoint ===
Trading in the category is about average for the time of year, and we have good expectations for the summer, depending on the weather.
Sports and energy drinks are doing very well and on the up. Fruit juices are looking good too. We are waiting to see what the new Britvic Gatorade from the US will do, it is expected to do well with two flavours. Smoothies, which have always been impossible for us to stock because of the short shelf life are now being delivered using an aseptic vacuum packaging, which will give them a six-month life, so we look forward to seeing how that business takes off. The flavoured carbonated drinks are in decline.
Coca-Cola is particularly supportive and has done a lot of work in helping to stamp out the ‘grey market’ coming from Georgia. They have been going out and checking retailers supplies are GB produced and offering support to retailers with fascia schemes and improving their displays.
Bestway Group is really doing some good deals at the moment – including Batleys 50th Gold Rush event, celebrating 50 years, Currently nbsp;we are offering major promotional opportunities to retailers through to June and the summer.
We really value support in increasing distribution and being seen to visit retailers regularly to offer support and advice on display and product development. Being on the front foot and visible is how we like to work in partnership.
=== FAST FACTS from GSK ===
l The average UK household spends more per annum on soft drinks ( pound;147) than on crisps ( pound;28)
l 21.5% of soft drinks are consumed for health reasons
l One in four soft drinks are sold at lunchtime
l The average person consumes 741 soft drinks a year – up 5% on 10 years ago
l Soft drinks is the second most profitable category in impulse and sixth in the total market
l Soft drinks are the third most important category in forecourts
l Sales of soft drinks increase by 7% when sold from a dairy deck versus a closed door chiller.
=== Buyer’s viewpoint ===
Total soft drink growth is at +4% within independents with drink-now providing all the growth +6%
Having a good look at the market trends, we find the energy category growing massively with the introduction of the 500ml Relentless can. In terms of value growth we find the energy category in growth between 17% and 23% and the good for me category between 3% and 16%. Due to the poor 2007 summer the water category is down between -14% and -6%.
Coca-Cola Enterprises gives the wholesale channel very good support.
We understand how big the energy category is in the market, therefore we are working with Coca-Cola Enterprises to offer our customers strong promotions on Relentless.
We look to suppliers for regular updates on promotions, brand plans, and the market/category. All information should be accurate and we need pre-warning on price and product changes.
=== Top soft drink SKUs in the impulse sector by cros ===
1. Red Bull Energy 250ml can single original
2. Coca-Cola 500ml plastic bottle single
3. Lucozade Energy 380ml plastic bottle single orange
4. Locozade Energy 380ml plastic bottle single original
5. Coca-Cola Diet 500ml plastic bottle single
6. Red Bull Energy 355ml can single original
7. Lucozade Energy 500ml plastic bottle single orange
8. Lucozade Sport 500ml plastic bottle single orange
9. Coca-Cola 330ml can single
10. Evian Plain 750ml plastic bottle single
CROS – cash rate of sale Source: Nielsen 12 weeks ending February 23, 2008