Despite the soft drinks market as a whole performing very well in the past ten years, the squash and cordials market had been struggling. Key market drivers of desire for healthier, more natural and better quality soft drinks had previously outperformed by the likes of smoothies, bottled water, premium fizzy drinks and fresh fruit juice. However, during the recession period, when the economic picture darkened, that the category, squash segment in particular, has seen a revival.
The result is that the market as a whole increased its value from £610 million in 2008 to £650 million in 2009. A sharp rise of 7% compared to a 5% value sales decline between 2006 and 2007. Mintel’s research shows that this is because compared to key soft drink rivals, it is seen by consumers as being better for value, for money and for flavour. It also has the advantage of being longer-lasting once opened than any of its competitors, while the shift towards low sugar variants satisfies the ongoing consumer concern about calorie control. Moreover, the sector has been helped by the take-home trend, at a time when customers have been spending more time at home, rather than going out, in order to save money.
Despite the recent positive market performance, Mintel’s research shows how there is a substantial lack of investment by the major soft drinks players. This under development plus the emergence of health concerns can weaken the market, making it look staid and old-fashioned. Cordials and squash may be difficult to innovate, as users can be quite resistant to change. Nevertheless, there are some interesting market changes which are helping to modernise the sector and get consumers to re-appraise the nature of the product. One good example already seen in the market is making the process of dilution more convenient, controlled and funnier for kids. Four in five consumers (82%) like having control over how strong or weak squash and cordials are, and this is something that is a unique attribute of the category compared to other chilled soft drink competitors.
The other big issue in the market is that squash and cordials are still perceived as fundamentally unhealthy. Only 30% (8.5m) of buyers think squash/cordials are healthy compared to 68% (15.5m) for buyers of fruit juice. To tackle the demand for healthier drinks, cordial manufactures could aim at offering more premium alternatives, like healthier and more natural flavours rather than additives, more fruit content, and also more premium packaging eg stylish glass bottles rather than functional plastic.* In terms of promotional activity, a more targeted communication approach, focusing on women’s magazines and the utilization of online marketing such as Facebook and Twitter could help in renovating the market.
The market success relies then in a higher offer of healthier alternatives, a more targeted communication and customisation. Mintel’s research shows that mothers are a key target when buying squash and cordials, with over eight in ten women with children in the household have bought the product in the past 12 months. Today’s mothers (and women in general) are more confident and empowered mothers, knowing that they are key not just to their family’s purchasing decisions but also those of their female peers. For example, mothers are increasingly using the Internet to communicate their ideas and preferences, making word-of-mouth between them a powerful tool. Therefore brands can make more use of the growing number of mother and baby websites to educate consumers by generating debate, communities and offering free samples.
* Internal market environment