While snacks and chocolate are two of the crucial categories in the impulse sector, soft drinks really puts its competitors in the shade with sales greater than the other two categories combined – and it’s still growing.
“Last year was another positive one for soft drinks – a good achievement especially when compared to the previous year’s strong growth,” says Britvic’s managing director Paul Moody. “The previous year was a scorching summer and soft drinks responded to this with exceptional growth. Last year soft drinks sales succeeded in the face of an immense challenge to continue growth during one of the wettest summers on record, and added value where most leading grocery categories could not.”
Overall the soft drinks market grew by 1% last year to £5.1bn with the convenience sector contributing £1.7bn of that total. Soft drinks are also showing substantial growth in catering wholesale, with ACNeilsen Catering Wholesale Service making it the fastest growing category at 9%.
Two of the most exciting sub categories in this growth story are water and juices. Water may have only just outperformed the overall soft drinks category last year with growth of 2%, but this followed on from a whopping 20% hike in sales in 2003 fuelled by the sweltering summer. And the growing demand for healthier food and drinks has helped to drive sales of waters and juices too.
Fruit juice and juice drinks has shown impressive rates of growth in recent years, with overall sales volume in Great Britain increasing by 44% between 1994 and 2004, according to the latest figures from Canadean (2004 report).
As the largest category within soft drinks, juice and juice drinks make up around 16% of the market and are worth £1.3bn after £36m growth (40% of all soft drinks growth) over the last year (AC Nielsen, December 2004).
With such attractive growth potential, it’s not surprising that Coca-Cola Enterprises is targeting the market with the launch of its Minute Maid range in the UK.
Minute Maid 100% Pure Squeezed Juices were created especially for British consumers, and went on sale nationally in June. The new range of not-from-concentrate juices will be Smooth Orange, Orange with Juicy Bits, and Smooth Orange Juice and Raspberry with added Zinc. Both the Smooth Orange and Orange with Juicy Bits variants will also be offered with multivitamins.
Adding to their healthy credentials, none of the new juices contain added sugar, ensuring that they can be counted as one of the five daily portions of fruit and vegetables recommended for a healthy lifestyle by the government’s Five-a-Day campaign.
Commenting on the launch, Norman Brodie, marketing director at Coca-Cola Enterprises, says: “Minute Maid is a leading juice brand around the world and with this range especially developed for British consumers, we plan to unlock the potential of the rapidly growing juice and juice drinks sector.”
Complementing the June launch, this month has seen the entry of Minute Maid Froot Refresh juice drinks, with more health-focused ingredients. A blend of juice and water and no added sugar, the range includes Apple with a splash of Mango with Multivitamins, Orange with a squeeze of Passionfruit with Calcium, and Red Grape with a dash of Raspberry with Zinc, and is intended for consumers on the move looking for a healthy alternative.
Brodie adds: “Our aim with Minute Maid is to make it easier for consumers to enjoy a healthy lifestyle. We have developed this range of fortified juice drinks for Great Britain to help consumers, wherever they are, enjoy the goodness of fruit and top up on vitamins and minerals that are so important to good health.”
PepsiCo’s Tropicana is the number one selling juice brand and the fourth largest soft drinks brand, according to ACNielsen figures, accounting for nearly 40% of chilled juice sales in impulse, and in January it was listed in McDonald’s restaurants giving it even greater brand awareness.
Although six out of ten households buy chilled juice, ensuring it’s now one of the fastest growing retail categories, chilled juice still continues to be a huge missed opportunity in impulse, according to PepsiCo trade marketing manager Nicky Seal.
Not only are impulse outlets failing to capitalise on a growing category but also the majority of impulse outlets are not stocking the fastest selling lines and thus not maximising sales from single serve bottles, she adds.
As such there is a massive opportunity and if independent retailers and wholesalers want to capture this growth they need to take a fresh look at the category.
She says: “In the wholesale channel we believe there is significant room for improvement in merchandising chilled juices in order to mirror the performance that has been seen in grocery. Based on current growth impulse retailers are missing out on one of the fastest growing categories and brands in the grocery channel.
“Less than one in ten impulse outlets are stocking the best selling single-serve lines, and only a third of impulse outlets are stocking the best selling take-home lines.
“Visibility and awareness are two key factors. Many independent retailers aren’t fully aware Tropicana and Copella are stocked in the chiller, and in some depots may only see the brands when they visit the chiller room to purchase chilled food, such as dairy products.”
To aid product visibility Tropicana has introduced new colour design corrugate cases and point of sale specifically for the wholesale channel. The new look cases have been specially designed to aid store shelf replenishment through easier brand and product flavour identification, and complement the new Tropicana ‘take-home cartons’ and ‘on the go’ bottles that were being supported by a £5m TV campaign in April.
The new case colours now reflect Tropicana’s carton and bottles colours. Seal says: “The new cases will give us much greater brand recognition and standout, and will clearly identify to both wholesalers and retailers the exact products and flavours. They will also now feature instructions for correct merchandising in-store, to aid retailers in their display and stocking decisions.”
To direct retailers to the chilled juice category within depot, Tropicana has also been investing in wholesale point of sale and merchandising that is easy to assemble and stands out in reception and in the chiller.
The additional commitment to the wholesale channel has paid off, she says. “Following the relaunch we had 136 new listings in 126 cash and carries. We also ran a number of other successful promotional days, such as one at Dhamecha’s Barking depot, where it sold one week’s sales in just four hours.”
Britvic has also been giving heavyweight support to its J2O brand, which contains 50% fruit juice and is now worth more than £25m. J2O’s investment for 2005 includes advertising, PR, sampling and point of sale support to enhance awareness and prompt trial, and the latest phase of its £5m marketing campaign launched in June with three new TV ads.
“J2O is the number one premium packed soft drink in the on-premise and is now well established in the take-home market,” says Britvic category director Andrew Marsden.
“The phenomenal success of J2O reflects the growing consumer demand for premium adult soft drinks and its ability to offer a credible alternative to alcohol. These new TV ads will further enhance its popularity and continue to help publicans and retailers to improve sales and profits.”
Britvic is also introducing a no added sugar range of its adult fruit drink Fruit Spring from Robinsons. Hitting the shelves this month with new labels and a silver cap, Fruit Spring NAS is aimed at growing the category by offering consumers greater choice of healthier, low calorie fruit drinks.
“We are making Fruit Spring NAS the focus of the brand in response to the increasing consumer demand for healthier products,” says Marsden. “The new NAS range will broaden the appeal of Fruit Spring and significantly increase the penetration of low calorie fruit drinks, driving growth in a category of huge future potential and increasing sales and profits for our retail partners.”
Promotional activity begins in mid August and includes outdoor advertising, a heavyweight sampling campaign and in-store materials at point of purchase.
GlaxoSmithKline’s Ribena is a major player in the still juice drinks market within total impulse. “This is proving to be a huge year for Ribena with continued dominance of the still juice drinks sector, major product development and a multi-million pound package of brand support,” says Henry Dummer, category planning controller, out of home impulse, GlaxoSmithKline.
He adds: “The new packs have been proven in research to generate powerful standout on-shelf thereby improving visibility and consumer appeal. Off-shelf standout is also huge with POS available for our customers to help signpost their Ribena range and indeed the cold drinks fixture.”
GlaxoSmithKline also launched Ribena Really Light in April – a no added sugar, low calorie variant.
Dummer comments: “Ribena Really Light replaces the Ribena ToothKind and Ribena Light variants, simplifying the range for consumers and ensuring the no-added sugar variant has the same unique Ribena flavour as the Original.” The launch is being supported by a £4m marketing package, and a new TV advertising campaign for Ribena will be aired later in the summer.
Vimto has also invested in a new look and has launched a new TV ad campaign, Shlurple the Purple. Steve Lamb, sales director, Vimto Soft Drinks, says the wholesale channel is very important to the company. “We’ve demonstrated this by a significant increase in human resources devoted to the sector with headcount up from three to 11,” he says, enabling the company to have dedicated account managers calling on depots.
The company has also supplied POS to heighten awareness of the brand in cash and carries. “We are looking to create theatre to reinforce the Shlurple the Purple message that retailers have already seen on TV,” he adds.
TV advertising is also being used to promote two other well known brands. Sunny D will be running a campaign worth in excess of £6.3m, including TV ads, to introduce a new tropical flavour – Sunny D Caribbean with No Added Sugar, available in 1.5 litre, 500ml and 8x200ml variants.
“We are continuing to create profit opportunities for retailers,” says Martin Jones, trade marketing manager, Gerber Foods. “We are committed to developing and improving the Sunny D range and are delighted with the positive results Caribbean has received in pre-launch consumer research.”
And Ocean Spray is back on TV this summer with a new £2m Supermodels national advertising campaign to coincide with a major summer sampling programme, a strong promotional and PR plan and a complete re-vamp of its website.
The brand is also investing in packaging with a re-design of its ambient range currently in development. A ‘new look’ Cranberry Classic and Cranberry Classic Light is due on shelf this month, with the rest of the range to follow.
The British bottled water market totals 2.1 billion litres and is worth more than £1.1bn. Market research company Synesis forecasts the water category will grow 24% by 2009, demonstrating an immense sales and profits opportunity for retailers in coming years.
Britain is considered an immature market, with per head consumption just half of the European average, which shows its potential in this country. “The growth potential of the water sub-category cannot be underestimated as trends indicate that consumers are focusing more on better for you products,” says Britvic’s brand director, Richard Collins. “Water is now the third biggest sub-category in take-home and has continued to grow, despite the poor summer of 2004.
“Research shows that water has 65% household penetration, which is similar to cola and fruit carbonates. As a leader in the soft drinks market, Britvic is looking to build the water sub-category further with Pennine Spring and by applying our expertise and knowledge to assist wholesalers and retailers in growing their bottled water sales.”
Pennine Spring was acquired by Britvic in November 2004 and was launched with new labels and packaging into cash and carry and the on-trade in February. Pack sizes for still and sparkling variants include 330ml and 500ml plastic bottles with the still variant available in a sports cap. One litre and 750ml non-returnable glass bottles are also available.
“Today the trend is increasing for people to eat healthier food and exercise more. We offer a choice to consumers and Pennine Spring helps to widen this choice,” says Collins. “Health experts recommend we drink as much as eight glasses of water a day, so the growth of this sub-category comes as no surprise. It is up to manufacturers like Britvic with our Pennine Spring range to deliver high-quality water products that fulfil the refreshment needs of modern, on-the-go consumers.”
In March, Britvic further capitalised on the growing flavoured water market by launching a Pennine Spring Flavoured Water range, with Orange Peach, Lemon Lime and Strawberry flavours packaged in 500ml plastic bottles.
“While health is a key trend in soft drinks consumption, consumers are also looking for healthy options with a delicious taste,” says Collins.
Highland Spring claims to be the number one selling brand of mineral water in cash and carries with a 22% market share and sales growing at 12.5%, and has developed an on-pack promotion exclusively for the sector. From October to December 2005 a text and win promotion will feature on all 500ml still, sparkling and sport and 750ml sports cash and carry packs for customers to win a transit van.
Unique codes will be printed on the inside of the product trays. Customers then text the code to the given number and instantly find out if they have won a van or one of the 1,000 digital radio runner-up prizes. The promotion will be supported by in-store point of sale and samplers handing out flyers. Vans will also be on display in selected depots.
Anna McDonald, trade marketing manager for Highland Spring, says: “This competition is open to all cash and carry customers and everyone is in with a chance of winning. We have run similar text and win promotions in the past and they are always a big hit with customers because of the easy entry mechanic and the instant win element.”
A smaller entrant to the market, aimed at the catering market, comes from Wentworth Spring Water. After trialling a wine-sized 750ml bottle it added a new 330ml bottle designed specifically with the hotel and restaurant trade in mind.
Managing director Steve Beech, comments: “We have just received an order for two million bottles, the new bottling plant is in place and we are ready to take the spring water market by storm. The new 330ml bottle is in keeping with the styling of its larger 750ml brother, and will fit perfectly into the small chiller units in hotels, restaurants and cafe bars.”
Tracey Richardson, wholesale trading controller, The Today’s Group
There has been a move towards the healthier products such as waters and juices at the expense of the carbonates. The focus on health is definitely having an effect, but consumers are also looking for more functional products too.
When the sun shines everything becomes a good seller, but the question is whether the companies are able to keep up with demand. Despite all the long range weather forecasts somebody seems to get caught out every year.
We get particularly good support from GSK and Britvic who work closely with us on promotions for our VIT loyalty club.
Ribena has been doing exceptionally well and J2O is proving very popular.
Paul Garner, soft drinks buyer, Appleby Westward
The overall soft drinks category has been in slight growth, but within that waters has been going from strength to strength year-on-year. Juices have been fairly static although I don’t handle chilled juices such as Tropicana because they go through the chilled buyer.
We work with all the big suppliers running the local and national promotions. Multibuys on the 500ml and two litres bottles do particularly well.
What we need is some sustained hot weather, like 2003. That was a fantastically busy time.
We also need suppliers to keep us informed so if there is a problem we can be proactive and arrange supplies from alternative sources.
WATER – THE FIGURES
Water is worth £502m in take-home, £49m more than the next sub-category, fruit drinks (1)
Water has a 10% value share and 17% volume share of the take-home soft drinks market (1)
Water experienced 2% value growth and 1% volume growth in 2004, which was above total soft drinks growth in both areas (2)
Still water makes up 77% of the sub-category (3)
Still flavoured water grew 23% versus 2003 (4)
1 Synesis Forecast 2004
2 ACNielsen MAT Dec 04
3 ACNielsen MAT Nov 04
4 ACNielsen, Total Coverage GB Still Flavoured value sales MAT Nov 04