As a nation Britons are always ready to party! Carbonated soft drinks and bagged snacks are two of the biggest mainstays of home entertaining, in sales value terms, and according to industry experts Mintel their sales have remained buoyant through the recession.
Being pitched at affordable prices for all pockets is integral to bagged snacks and carbonates’ continued success.
Remarkably in a recession, crisps and snacks showed fresh growth in 2008, with the market valued at £2.5 billion, 5% higher than 2007, the first year to exceed 2003’s previous record sales value. Bagged snacks’ value sales have grown as a result of manufacturers making crisps healthier and hence more acceptable for everyday consumption, on one hand, and on the other, developing indulgent treats for adults. The result is the development of a substantial market for premium crisps and snacks sold at higher prices.
Walkers, United Biscuits and Procter & Gamble continue to account for over three quarters of the bagged snacks market. The hand-cooked crisp manufacturers, Kettle, Tyrrells and Burts, are the most important suppliers in the fastest-growing segment premium crisps. Remarkably for a food category, the market remains strongly brand-orientated with own-label accounting for only 11%.
Mintel put UK carbonates’ sales value at £6 bn in 2008, with growth continuing (+1.4% in 2008). Despite the onslaught of energy drinks and other, newer soft drink sectors, carbonates’ resilience is proven.
Coca-Cola GB takes two-thirds of carbonates retail sales, and the Coca-Cola/Coke brand alone holds very nearly half. Britvic Soft Drinks is second placed in the market, but some way behind Coca-Cola on 15% of retail sales. Pepsi sells far less than Coca-Cola, but has shown much better growth since 2006.
The recessionary environment seems to have been working against premium soft drinks but seems to have helped carbonates, as a ‘feelgood’ antidote to the general doom and gloom: consumers are going back to the products they know and trust. Carbonates are also likely to benefit because the core drinkers are young, and the young are the last to feel the effects of the recession.
Carbonates have come in for more than their share of criticism from the diet and health lobby, because of their contribution to obesity in children. Carbonates’ penetration among under-14s –86% according to TGI – is much higher than among adults at 57%. However, whilst the challenge from more obviously ‘healthy’ soft drinks such as bottled water and fruit juice, is real, it is hardly a threat to a market of over 4 bn litres per year.
The Grocery Trader