Murray Harris, director of customer operations at Britvic, has a lot of sympathy for cash and carry managers because of the way they have to balance their service with what their customers want, within a limited amount of space. He explains: “When we talk to a cash and carry manager about ranging we often find ourselves asking ‘Why are you stocking brand X when you only sell a limited amount?’ The reply is usually the same – ‘I’m a service to the retailer and if he can’t get brand X from me then he will go elsewhere and take all his business with him. By stocking brand X I get all of his shopping’.”
Despite this, says Harris, when it comes to stocking soft drinks, there are still rules that depot managers can apply.
“For cash and carries it’s all about getting the right range and not carrying too many lines,” says Harris. “For that reason, we’ve started restricting our planograms to cash and carries, the thinking being that if we’re not expecting retailers to stock all these brands then why should cash and carries? We need to regulate the amount of brands and packs cash and carries take to reflect that, rather than just see what sells.”
Then there’s the layout to consider: “The easiest way to get this right is to follow the soft drinks Blueprint and the advice we give,” says Harris. “Cash and carries need to lay their depots out in such a way that retailers can shop effectively, giving the right space to the right brands. These are the fundamentals, the basics.
“Then there are the peaks and troughs of the buying pattern to take into account, and managing stock levels accordingly. Obviously this is particularly important in the summer. Cash and carries need to know which brands will be getting above-the-line backing because it’s even more important that you get the space to sales ratio right with these, to keep up with demand.”
Harris says the cash and carry and wholesale sectors are an incredibly important part of Britvic’s business. “We need a balanced customer base; we don’t want all our customers in one route to market because we’ve got a very broad portfolio and a very broad consumption base so we need a broad route to market.
“We’ve a sales force that focuses on cash and carries, calling on most depots to advise on category layouts and promotions. They pull stock out of cash and carries nationally and take it to independent customers to gap fill.
“Promotions are a key plank in cash and carries. They’re mostly price driven but price alone is not the answer – you need a great display and a great brand message, something to prompt awareness of the retailer then awareness of the consumer; it’s got to be integrated. Then there’s the size of the display to consider. Managers need to build an appropriate size display with an appropriate level of product. It’s not all about size because having six months-worth of stock laying about doesn’t help anyone.”
When it comes to the products, Harris points to the rapid growth in sales of health and well-being lines. “People are moving out of one category into another – coming out of cola into fruit drinks, out of fruit drinks into squash, and out of squash into water. Water, squash and fruit drinks are the categories cash and carries should be thinking about. This is particularly important with summer fast approaching as you always get an exaggeration of consumer trends in the summer.”
Consumer trends are also exaggerated in London, which is why Britvic is currently doing extra work there. “London is a key place for soft drinks so we’re doubling our sales force there. A lot of people might ask why, thinking London is taken care of, but London has a different set of demands to other places because of the number of visitors and number of commuters, its ethnicity and its high transient population.”
Over at Coca-Cola Enterprises (CCE), the advice to wholesalers is to focus more on proactive selling including the use of POS, signposting, communication and, in particular, retailer education. The company also advises wholesalers to allocate space that reflects the soft drinks sales patterns of the past 10 years and the market growth. CCE’s ongoing plans for the cash and carry and delivered wholesale sectors aim to reduce complexity for wholesalers; ensure an integrated marketing campaign with above the line, below the line and promotional activity all aligned; and explore opportunities within catering and servicing people on the move.
The major suppliers definitely seem to be making a major effort in the cash and carry and delivered wholesale sectors, and are reaping the rewards.
GlaxoSmithKline Nutritional Healthcare (GSK) reports that its soft drinks are currently growing at 10% year on year in cash and carry and delivered wholesale outlets, against a market growth of 1.4%. Lynsey Priestley, customer activation controller at GSK, says: “We have been working very closely with some of the largest wholesalers over the past year to ensure the company is delivering the right products in the right formats to meet their customer demands. Last year alone we repackaged and redesigned the Ribena range. nbsp;The results speak for themselves with Ribena Original currently in growth by 12.9% compared to last year.”
Of course new launches are the lifeblood of any product category but there are so many in the soft drinks market that it’s hard to keep up. However one to definitely watch out for is Coca-Cola Zero, the no-calorie Coke that will take on Pepsi Max. Available in the States since last summer, its key target audience is young adults and men who are put off by the word ‘diet’ on soft drinks. The ‘Zero’ moniker makes sense as it sits nicely alongside the Fanta Z, Sprite Z, Dr Pepper Z and Lilt Z brands, where the ‘Z’ stands for zero added sugar.
Apparently the main difference between Coke Zero and Diet Coke in the US is that Diet Coke is based on the ‘New Coke’ formula and sweetened with Aspartame, while Coke Zero is based on the Coca-Cola Classic formula and sweetened with aspartame and acesulfame potassium. It is already available in Australia and will be launched in the UK later this year.
In the meantime, the launch of ‘with’ flavours continues, the latest being Coca-Cola with Lime. Packaged in green 500ml and 2ltr bottles, it is available throughout the summer. The launch is supported by a pound;1.2m campaign including a new TV ad. It follows the launch of Diet Coke with Lime, which has become a hugely successful flavour worth pound;31m.
Away from cola, Coca-Cola Enterprises (CCE) has launched Oasis Fusion, a still fruit-flavoured drink with no added sugar. Targeted at women, the two flavours are passion fruit vanilla and berry elderflower. In the on-trade, Coca-Cola Enterprises’ original Schweppes Deuce drink, launched last year, has been replaced with No Added Sugar Schweppes Deuce. The juice drinks come in 275ml glass bottles in two flavour combinations – orange guava and cranberry raspberry. CCE says it has already secured listings in key wholesalers for the reformulated drink.
For younger consumers, the Panda brand has been relaunched with real fruit juice, no artificial flavours or colours and no added sugar with a new streamline bottle. And, for the first time in its history, Panda will receive advertising support in the form of a heavyweight national cinema and TV campaign.
Vimto Soft Drinks category development controller, Debbie Welsby, confirms that the company is running a variety of initiatives for Panda within the cash and carry/wholesale sectors. “In wholesale outlets we are running a depot teaser using an eye-catching giant Panda to publicise the relaunch. Our SKUs have also been developed to better cater for the retail customer with Panda Still and Panda Spring available in a 12-pack.”
Meanwhile, Britvic has added two new flavours to its Tango Clear range: orange and raspberry white cranberry. In addition, the brand’s packaging has been refreshed with simplified labelling to enhance on-shelf and chiller standout. The no added sugar message has been made larger to highlight its healthier credentials.
In the water sector, the Strathmore Mineral Water Co is launching Strathmore Select, a premium range of sparkling flavoured waters. There are three exotic flavour combinations in the range: orange, mandarin lemongrass; white grape lychee; and apple, jasmine camomile. The drinks come in clear one litre glass bottles with a gold screw cap.
Continuing with upmarket offerings, Bottlegreen Drinks Co has added a premium elderflower still drink to its range. Despite the crowded marketplace, Simon Spears, managing director of the Bottlegreen Drinks Co is confident that his company’s range of adult soft drinks is different enough to warrant shelf space – at both cash and carry and retail level.
“Brands have to be able to prove that they are wanted and needed by consumers in a specific retail area. This we do through local activity such as sampling, sponsorships and public relations. We also offer account-specific support such as POS for retailers and promotional support for wholesalers. It is an integrated system to give the wholesaler and retailer the confidence to buy knowing that they will receive the support that they need,” explains Spears.
Many stores are already kitted out with England merchandise in time for the World Cup so it’s no surprise that football is a big promotional theme for soft drinks this summer. In cash and carries, CCE is running a promotion designed to generate excitement around the event. It gives retailers a free FIFA World Cup football when they buy any four cases of 6x2ltr, 4x6x330ml cans or 24x330ml glass bottles of Coke or Diet Coke.
The football-related promotions continue with Pepsi’s ‘What’s In Your Locker?’ activity. An on-pack promotion will feature across all Pepsi variants and packs will have their own ‘football strip’ to maximise impact. Consumers have the chance to win a new Xbox 360 entertainment console and game every 90 minutes via a text and win code. New TV ads will feature 20 past and present international players, including David Beckham, John Terry and Paul Robinson.
The World Cup is obviously going to be the sports event of the summer but the popularity of Wimbledon should never be under-estimated and there are several tennis-themed promotions about.
Robinsons’ latest tennis campaign is rather aptly entitled ‘Winbledon’. It gives consumers the chance to win a VIP experience for the 2006 tournament and runs every day for five weeks.
To coincide with its status as the official mineral water to Wimbledon, Buxton has launched an on-pack promotion on 50cl bottles which gives consumers a chance to ‘Serve for pound;1million’.
It is a text promotion, and the first entry drawn will be invited to Wimbledon to serve a tennis ball into a target while adhering to the normal rules of singles tennis. If the shot is successful, the winner will receive pound;1m. The promotion will run across seven million bottles and will be supported by point of sale material in cash and carries.
Away from sport, and Vimto is currently running a ‘Taste me free’ offer to drive trial backed by price-marked packs to encourage consumers to buy the product. Vimto category development controller Debbie Welsby says creating attractive shelf space in wholesale outlets to attract the customers is crucial. “We have recently invested in upgrading our POS in depot including installation of lit display units in depots such as Parfetts and Bestway. “It is essential that wholesalers buy into the Vimto brand and we invest in the relationship by holding special events for our wholesale clients to incentivise and create depot awareness. Last year Vimto organised a day at the races, with several clients attending the Belle Vue dog track in Manchester, which was a tremendous success and helped us to communicate Vimto’s brand values and engage with wholesalers.
“Our Shlurple the Purple campaign has taken the nation by storm but we are committed to delivering promotional support at a local level through all trade channels. These cash and carry initiatives are all about brand support and incentive – and ultimately are targeted at increasing profits for the individual outlets.”
Finally, Brecon Carreg natural mineral water is running a ‘TXT 2 WIN’ competition in the wholesale sector, which gives customers the chance to win a Mercedes Vito van worth pound;12,000. The promotion is running on both flat cap and sports cap Brecon Carreg still 24 x 50cl packs.
Brecon Carreg marketing manager, Gill Bullock says: “We have been looking for an innovative mechanism to reward wholesale customers, be they our loyal following, or new customers. Our intention is to capitalise on the interest from wholesale customers that we have seen in 2005. This promotion is part of a varied trade marketing plan for the wholesale channel which will include our traditional case price reductions, multibuys and extra bottles free packs.”
=== Buyer’s viewpoint ===
Soft drinks is traditionally one of the largest ‘bread and butter’ areas for Bestway but, in line with everyone in this sector, there is continuing decline in sales of sugary and sparkling drinks. Healthier drinks continue to do well, such as Lucozade and Ribena, and of course water including our own Best-In label brand. Fruit juices of most kinds have done well and continue to do so.
We are looking forward to a hot summer. We can see sales of water rise dramatically – by 200-300% – if the temperature rises above the norm.
We are working well with suppliers and enjoy their support; some are better than others and we welcome creative solutions to the task of maximising sales in these demanding times.
=== the chilled juice 0pp0rtunity ===
Although 10% more retailers are selling chilled juice than a year ago, the chilled juice opportunity has yet to be fully realised in wholesale where penetration is still fairly low. That’s the view of Tropicana, which states that only one in seven cash and carry customers purchases chilled juice whereas almost 80% of customers purchases soft drinks.
To rectify this, Tropicana has introduced a number of initiatives to help wholesalers maximise the chilled juice opportunity including point-of-sale in depot; new case designs to ensure the product stands out on the shelf; and sampling activities to raise awareness in depot. And these initiatives are working. For example a sampling activity in a depot last year resulted in a whole week’s worth of sales occuring in just four hours.
Cara Beeby, PepsiCo trade marketing manager, comments: “There are several things wholesalers can do to ensure they are maximising sales of juice. First, they should ensure they stock the best sellers. Next, it is vital they ensure a clear layout of the chilled area with POS to drive visibility. One such trial drove sales by 41% in the trial store.
“In addition, wholesalers should stock the right range of pack sizes and follow a planogram which allows space for take-home (1ltr and above) as well and drink-now (500ml and below) formats. It is also important to stock larger 1.75ltr packs to satisfy caterer demand as approximately half of all large pack sales now go through caterers.”
The latest launch from Tropicana is Tropicana Go! described as the first ever mainstream juice drink for kids. It contains 70% juice and 30% water and comes in two flavours: orange pear and blackcurrant apple, in 1.25ltr and 200ml formats.
Meanwhile in the on-trade, Tropicana Pure Premium is now available in 275ml glass bottles, in smooth and original varieties. The introduction coincides with recent research that revealed a change in the behaviour of pub-goers.
According to TNS Alcovision, the percentage of on-trade visitors who are not drinking alcohol has doubled since 1990, a trend which is being driven by over-35s, and women, in particular.
=== Buyer’s viewpoint ===
Carbonates are really taking a battering as people move to healthier drinks. Water is selling well in all its forms. We’re stocking the new Panda Still and Panda Water ranges. It’s got a new look with lots of support in the trade press so we think the Panda brand will have a really good summer. Hydro and Oasis are already selling well – any drinks that consumers think are healthier are selling well. Coca-Cola is still number one but is losing sales. There are a lot of price promotions and parcel deals around at the moment – even one on Coca-Cola Red, which is unheard of.
=== the market ===
According to the Britvic Soft Drinks Category Report, which uses figures from ACNielsen, the total soft drinks market was worth pound;7.8bn last year, with pound;5.4bn of those sales in take-home outlets and pound;2.4bn through pubs and clubs. The figures represented a 5% sales rise over 2004. Sales through independent retailers amounted to pound;720m.
Despite reports that carbonate sales have lost their fizz, colas performed well across pubs and clubs and take-home but fruit flavoured carbonates lost sales. However in independent retail, cola sales were down 3% with fruit flavoured carbs down 14%. However sales of functional drinks grew by 10%, mineral water by 8% and adult soft drinks by 20%.