With summer on the way, it’s time for retailers to be planning their soft drinks displays.
The UK’s £8.7 billion soft drinks category (IRI) continues to be one of the most profitable categories for retailers.
The needs of shoppers are continually evolving and shopper behaviours fluctuate, which is why looking at trends and behaviours and adapting to take full advantage of these opportunities, is key to continued success. Although the world of soft drinks is changing, the overriding reasons why consumers choose a soft drink will remain constant – great taste, flavour choice and the right pack formats.
As the trend of health continues to grow and evolve, so does the range of products that are available to your customers.
“Water is often a lower value purchase than traditional soft drinks, so to maximise your sales whilst meeting the needs of your customers, giving the right space to a new category we call Tasty Hydration is going to be the solution for now, and the future,” says Adrian Troy, Marketing Director at Barr Soft Drinks. “Brands such as Rubicon Spring are the high taste, low calorie alternative that shoppers are increasingly on the lookout for – a bridge between the healthiness of water and the taste of carbonates and fruit drinks.”
Le Joli, sparkling water infused with natural flavours, is perfectly placed to meet the needs of those especially health conscious shoppers that are looking for great tasting products free of sugar and any artificial additives. Carbonates remain the backbone of the fixture, worth £4.6 billion and growing strongly at +5% year on year (IRI) and shoppers are looking for a good range of great-tasting choices.
Flavoured carbonates provide choice for shoppers and IRN-BRU is the UK’s number one flavoured carbonate brand (IRI) with the regular and XTRA versions both must-stock products for all UK retailers. IRN-BRU XTRA, delivering extra IRN-BRU taste with zero sugar, has delivered £19m of retailer sales this year and is currently growing at +25% (IRI).
Barr Soft Drinks has recently rolled out its latest innovation, IRN-BRU Energy, to the UK market after launching in Scotland. The new variant has outperformed its closest competitors since its introduction to the Scottish market in July 2019, establishing itself as the year’s fastest selling soft drink in convenience, (AG Barr Research).
Shoppers are increasingly opting for flavoured variants when choosing an energy drink, with flavoured energy now accounting for 34% of the mainstream energy market and growing faster than original energy (IRI). “Specifically within soft drinks, the major changes in consumer lifestyles, influences and needs in relation to buying and consuming soft drinks will be a major contributor to future category growth and it’s important for manufacturers, suppliers and retailers to keep up with these changes and react accordingly,” adds Troy.
With 65% of people agreeing that they are proactively trying to lead a healthy lifestyle (CGA), it has led to a +3.7% increase in the value of low-calorie drinks (Nielsen).
“As well as a move away from high sugar products, the want for healthier alternatives has caused shoppers to cut down on alcohol, or avoid it altogether,” says Ben Parker At Home Commercial Director at Britvic. “This means the soft drinks category is becoming increasingly important as a means of helping retailers to drive drinks sales and plug the gap left by lost alcohol sales.”
Latest ONS figures reveal that around one in five Gen Z’s are now teetotal, making health less of a “trend” and instead a generational behaviour change.
“For adults looking for a premium product or treat, J2O is the perfect choice for those consumers looking for something different,” adds Parker. “Retailer support in terms of secondary space in store is important in this area to drive sales and the impact can be seen during these seasonal occasions.”
Due to its treat nature, most but not all of the propositions in this category are in glass format. “Glass is more suitable for a dinner party for instance, but we’re increasingly seeing people favouring other formats for other occasions and this has meant that innovation in can formats has become more prominent,” says Parker.
Can and glass appeal to different types of shoppers and occasions, even in adult soft drinks, which is why a breadth of formats is important.
Robinsons, the UK’s number one squash brand (Nielsen), has introduced a blast of berry flavour to its Fruit Creations range – Blackberry and Blueberry. The new flavour delivers an intense and juicy burst of tangy blackberry, paired with rich blueberry, providing a premium taste designed to suit adult taste buds. It also delivers on people’s desire for healthier products, containing no added sugar and twice the fruit of the core range, making it a more permissible choice.
“In terms of growth drivers, it’s important to remember that shoppers want excitement when looking for a soft drink. Lucozade Ribena Suntory is investing in ambitious innovations across its portfolio of leading brands, Lucozade Energy, Lucozade Sport and Ribena, to drive sales for retailers this year and beyond,” says Scott Meredith, UK Sales Director, Lucozade Ribena Suntory (LRS).
Last year Lucozade Energy launched a brand-new flavour: Watermelon & Strawberry Cooler. The drink is the newest addition to the £293M (IRI) Lucozade Energy range which includes Caribbean Crush, Wild Cherry, Brazilian, Pink Lemonade and Apple Blast flavours alongside core favourites Orange and Original.
Last summer was huge for Lucozade Sport too, with a raft of activity which kicked off with the launch of its latest NPD, Anthony Joshua Fruit Punch. The brand also partnered with the England Lionesses and the Netball World Cup last summer and continues to invest in PR and social media to celebrate inspiring fitness enthusiasts throughout the year.
Ribena moved into the enhanced and flavoured waters category for the first time last year with the launch of Ribena Frusion. The new range is unique in the soft drink category, using blackcurrant water infused with real fruits and botanicals. It’s also low in calories, rich in Vitamin C and contains no sweeteners or preservatives. Ribena Frusion sits in an entirely different category from Ribena. It is a flavoured and enhanced water and appeals to shoppers looking for ‘enjoyable wellness’. This latest launch has already made a splash in the market with 90% of spend incremental to flavoured waters (IRI), helping retailers to drive additional sales within soft drinks.
“We have seen a long-term trend towards soft drinks with lower sugar as consumers become more interested in living healthier lifestyles,” adds Meredith.Shoppers’ spending on zero and low-sugar drinks has increased by 33% and 29% respectively, showing just how important this segment of the market is. This is mirrored at the other end of the market with a decline in high-sugar drinks (with over 8g sugar per 100ml). “These patterns of behaviour illustrate the relevance of our range to today’s consumer as they increasingly make healthier choices,” says Meredith.
LRS has invested in its brands to help our customers offer their shoppers drinks in line with this trend. Its core brands are available in very low or zero-sugar alternatives in the form of Lucozade Zero, Ribena Light and Lucozade Sport Low Cal to offer consumers a full range of choice.
“We advise retailers to take advantage of the range of drinks available and to stock up on the various SKUs in order to offer shoppers their favourite drinks as well as new, healthier choices,” Meredith continues. Another key trend which is crucial for attracting new soft drink shoppers to the category is flavours. The Lucozade Energy flavours range has contributed a significant £68M worth of sales to the energy category (IRI), showing just how important it is for retailers to offer a diverse selection of flavours. Two of the brand’s latest launches have been successful is building on this trend, with Lucozade Energy Apple Blast and Lucozade Energy Watermelon and Strawberry Cooler now worth over £22M combined (IRI).
“We advise retailers to follow simple category advice to maximise sales within soft drinks. Focus on layout, review the range regularly and stock up frequently,” Meredith concludes.
Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP), comments: “Periods of warmer weather can boost sales, whether people are looking to cool down whilst on the go or stocking up for a family outdoor occasion like a barbecue or picnic.”
This means that there are great opportunities for stores to increase their sales of immediate consumption formats of Coca-Cola zero sugar or Fanta Zero over the summer period.
“It’s worth keeping stocks high during this time, with as wide a choice of products as possible, taking into account a range of different sectors, variants and pack formats to appeal to every consumer taste,” adds Burgess. Retailers should also monitor for any new or special edition products, as well as those being backed by marketing spend, helping to maximise incremental growth.”
Consumers have a greater awareness of health and wellness than ever before, and this is impacting the way they shop. As a result, CCEP has seen an increasing demand for its low and no sugar products in their own right. Diet Coke remains the most popular light cola brand in GB, with a value of more than £457m, while Coca-Cola zero sugar is growing significantly, currently up 16.9% in value in GB (Nielsen).
CCEP’s flavoured carbonates, which includes zero sugar variants across its portfolio, are also growing 4.8% in value, highlighting the popularity of brands like Fanta Zero and Sprite Zero amongst consumers (Nielsen). In energy, the Monster Ultra range is now worth £64m in GB and is in growth by 23% (Nielsen).
“As such, retailers should make sure they are well-stocked with a wide variety of low-and-no sugar options as the warm weather approaches,” adds Burgess.
Consumers are becoming more adventurous than ever and are looking to experiment with new and exciting variants of their favourite soft drinks. More than a third of shoppers (35%) agree that they like trying new things when grocery shopping (HIM), so it is increasingly important for retailers to keep an eye out for the latest flavour innovations launching this summer.
To make the most of the growing demand for innovation, CCEP evolved its flavoured carbonates portfolio even further in 2019 with a new grape-flavoured addition to the Fanta Zero range, Fanta Grape Zero. The new product was launched following huge demand for the flavour on social media by Fanta’s core consumers and is now worth more than £10million (Nielsen), demonstrating demand from Fanta drinkers for new flavour variations.
This year CCEP expanded its light cola range further with the launch of Diet Coke Sublime Lime, combining the taste of Diet Coke with a refreshing citrus twist. This follows the launch of Diet Coke Twisted Strawberry in 2019, which is already worth £8m (Nielsen).
In energy, CCEP has expanded its Monster Energy portfolio in 2020 with two new flavour variants – Monster Pacific Punch and Monster Ultra Paradise. These are both inspired by tropical flavours, which are likely to prove popular during the summer months.
“With the teetotal trend showing no signs of stopping, adult soft drinks are likely to be a popular choice as consumers look for more sophisticated soft drinks options to enjoy during barbeques and other occasions at home over the summer period,” Burgess believes.
This includes products like Appletiser, which is in growth by 25.8% (Nielsen). It is made with pure fruit juice and contains no added sugar, making it a popular choice with health-conscious consumers whether being enjoyed on its own, or as an ingredient for cocktail or mocktail making at home.
As well as delivering on taste and refreshment, Appletiser helps offer a sophisticated alternative to alcohol that the growing number of teetotal consumers are happy to drink while others may be having beer, wine or cocktails.
Schweppes also continues to be one of the nation’s favourite mixer brands, delivering 7% growth (Nielsen). Its sophisticated packaging reflects the premium liquid inside, with the yellow sash that’s instantly recognisable to consumers.
Vimto is the fastest growing soft drinks brand in the UK, continuing to outperform the market and growing at twice the speed of the overall category (Nielsen). Kantar recognised Vimto as the nation’s tenth most chosen beverage brand this year.
“And we’re not just talking soft drinks – people are picking Vimto over all other categories, including alcohol and hot beverages; making the drink perfect for summer,” enthuses Becky Unwin, Senior Brand Manager, Vimto. “We’ve also risen through the ranks to become the number two squash brand. As one of the original makers of cordial, this is something we’re really proud of.”
One in four households across the country are now choosing Vimto. There are 700,000 new buyers of Vimto and the brand is attracting more young and affluent shoppers too. These new recruits mean Vimto is now consumed on 491 million occasions (+99m more year on year) according to Kantar.
Last year Vimto invested £3.5million to further roll out an ‘anti-advertising’ creative.
“As a soft drink brand, we can’t not mention the sugar tax,” adds Unwin. “100% of the Nichols-owned portfolio was exempt when the levy came into effect, in fact it had been for some time, but despite a reduced sugar content, our sales have only increased.”
Vimto No Added Sugar and Vim2o flavoured water are better-for-you products. Sales of Vimto No Added Sugar are growing at +8%, with sales of our No Added Sugar variants contributing to half of all Vimto sales (Nielsen).
“Whilst meeting demand for healthier options is incredibly important, driving excitement and delivering a delicious product experience is at the core of everything we do,” says Unwin. “Vimto Remix takes our unique taste and mixes it up with adventurous, on-trend flavour combinations.”
Since launching in 2016, Vimto Remix is now worth £9.7million in incremental sales and is growing +36% YOY (Nielsen).
Wayne Thompson, Business Unit Controller for OOH, YAZOO, tells Grocery Trader: “We’re the nation’s number one traditional flavoured milk drink and we’re as passionate about innovation as we’ve always been and we love challenging ourselves to have as much fun with the category as we can.”
As a brand, YAZOO is currently worth over £33m in convenience alone. It is the brand leader in this channel with 22% market share (IRI), and its core Strawberry flavour continues to be a best-seller across convenience.
“Success of the brand has been largely due to a combination of factors such as introducing popular NPD into the market, optimising promotions and achieving distribution,” adds Thompson. “We have a laser focus on really understanding buyer behaviour and driving new entry points into the category – we’re constantly opening up more drinking occasions, such as the treat-yourself buy, or the sharing at home purchase and ultimately that means we’re still continuing to see growth.”
Flavoured milk’s strong performance is in part due to the innovation within the market amplifying the benefits of milk such as RTD coffee, protein, being a breakfast alternative, and no and low sugar variants.
“Of course, we can’t forget about the sugar levy impact,” concludes Thompson. “The levy raised the profile of the category and served as a reminder to consumers and customers of the goodness of dairy drinks as a soft drink alternative to carbonated soft drinks.”