Every January consumer involvement in soft drinks soars as millions of us make brave resolutions to get healthy after the Christmas indulgence and take a break from alcohol. Meanwhile soft drinks as we know them have been getting a shot of caffeine as the burgeoning energy drinks segment grows and grows.
In a separate development, Starbucks has stepped into the soft drinks space with its coffee shop-inspired coffee to go drinks – and Coca-Cola has ventured outside its soft drinks, carbonates and waters comfort zone, launching Fuze Tea and announcing its decision to buy the Costa Coffee chain, a story which has yet to unfold.
As we start the new year, the UK soft drinks market is currently worth over £7.6 billion, according to Coca-Cola European Partners (CCEP), and never been in better shape. Consumer purchases are being driven by a combination of trends – premiumisation, convenience, flavour diversification and health and wellness – which are likely to keep soft drinks top priority with shoppers.
Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP) explains her company’s point of view:
“We’ve invested in developing our portfolio to keep up with the demand for low and zero sugar soft drinks. Starting with colas we launched Diet Coke Feisty Cherry, Diet Coke Exotic Mango and Coca-Cola zero sugar Peach last March to tap into the growing flavoured cola sub-category, now worth £170m. These have proven extremely popular, with sales topping £20m, of which 60% is additional business.”
Diet Coke has also received a rebrand and Coca-Cola zero sugar now includes more of the iconic red associated with Coca-Cola original, to encourage more people to try the zero sugar version.
Health and wellness trends have also impacted on bottled water sales, with 90% of consumers saying they are influenced by health when shopping.
Flavoured water sales are up 4% year on year. These products are particularly popular among young people and millennials, offering an alternative to traditional carbonates by combining lower and zero sugar credentials and fruity, refreshing flavours with water’s hydration properties.
Last year CCEP evolved their glacéau smartwater portfolio with four new flavours – Berry & Kiwi, Lemon, Green Apple and Grapefruit & Watermelon – all sugar and calorie-free with no artificial ingedients. CCEP also introduced a new flavoured water range to their Oasis portfolio, Oasis Aquashock.
In the energy category, CCEP’s Monster Energy is in 20% growth across grocery and convenience, driven by investment in NPD including low and zero sugar variants, marketing and sponsorship. The brand hit the £200m annual sales milestone for the first time in 2018. Launched in 2016 Monster Ultra is now Britain’s number one low calorie energy brand, worth almost £60m.
Demand for interesting energy drink flavours has led to a surge of innovative variants. CCEP launched a fifth Monster Ultra option, Monster Ultra Violet and expanded its Monster Punch range, which has grown 107% over the last year. New Monster Pipeline Punch is a refreshing blend of passionfruit, pineapple and guava, with 16% real fruit juice.
Juiced energy drinks are also rising in popularity. growing twice as fast as the total energy sector. Mango Loco joined the range last year, helping wholesalers tap into the growing demand for fruity flavours.
In Adult soft drinks, rising demand for premium spirits is driving the growing popularity of premium mixers. A mainstay of CCEP’s portfolio, the 234- year-old Schweppes brand created the category and remains the nation’s favourite mixer. Last year CCEP unveiled the biggest investment in Schweppes’ history, giving Schweppes Classic a refreshed pack modelled on the original Schweppes skittle bottle invented in 1783. CCEP also unveiled Schweppes 1783, a range of naturallyflavoured premium mixers.
Another CCEP power brand, Appletiser has also performed well, benefiting from the low and no-alcohol category’s 19% growth and is worth £12.9m, up 33.1%.
As we mentioned at the start last year also saw CCEP expanding into new and emerging segments. They unveiled their ‘Total Beverage Company’ strategy, focused on innovation to meet evolving consumer needs and occasions. One of the first launches was Fuze Tea, a premium, low calorie blend of tea, fruits and botanicals in two variants, Black Tea Peach Escape and Green Tea Mango Harmony.
Last August Coca-Cola also announced its intention to buy Costa Coffee in a deal expected to close in the first half of 2019. The move has yet to be finalised but puts them in direct competition with Starbucks, who also have a strong retail presence in the UK thanks to Arla Foods, which manufactures, distributes and markets Starbucks’ premium milk-based readyto- drink coffee beverages for the European market.
The number one brand in the fast-growing chilled coffee category, Starbucks accounts for four of the top five best-selling lines in retailers, growing 34.9% in volume annually. The Starbucks chilled ready-to-drink range draws from the coffee houses’ knowledge and heritage, and use the same 100% Arabica coffee beans.
Michael Lomas, Commercial Marketing Manager, Arla Foods says: “Choice and variety remain important to consumers and Starbucks coffers the broadest choice within the category.
Last year saw brand extensions for the Doubleshot range and Signature Chocolate was introduced into Chilled Classics as the first non-coffee dairy drink in the range. Inspired by the coffee house customer favourite, the Signature Hot Chocolate, this chilled drink offers a delicious blend of rich Fairtrade cocoa and creamy milk.”
With increased interest and awareness in health and wellness, the launches of Doubleshot No Added Sugar and Black without Milk, plus the relaunch of the Lactose-Free, No Added Sugar Skinny Latte in the Chilled Classics range helped attract more consumers into the chilled coffee category. Starbucks are dedicated to growing the category further and plan more coffee house-inspired NPD this year.
The burgeoning UK coffee shop sector bridges retail and foodservice. Twinings Foodservice’s Twinings Cold In’fuse is a cold brew product created to infuse effortlessly in still or sparkling cold water. Available in three fruity flavours, ‘Watermelon, Mint & Strawberry’, ‘Passionfruit, Mango & Blood Orange’ and ‘Blueberry, Apple & Blackcurrant’; Twinings’ unique and naturally delicious range of cold infusions offer a taste of summer all year round. Added to water and left to infuse for 5 minutes, Twinings Cold In’fuse offers a soft drink that is sugar free, all natural and low in calories.
Jacqui Chapman, Shopper Marketing Manager at Twinings Foodservice comments: “We all know that water is a great way to stay hydrated throughout the day and it impacts how we function and feel both inside and out. With many consumers choosing tap water in cafes, restaurants and hotels due to a lack of healthier choices on the menu, Cold In’fuse not only encourages us to drink more water, but also makes it easier to attain the recommended consumption per day.”
According to Twinings’ research, 68% of adult consumers would choose a healthier alternative to a soft drink if available, while 73% would like a larger range of sugar-free options.
Returning to conventional soft drinks and waters, as UK soft drink consumers become increasingly health conscious, Ed Jones, senior customer marketing manager at Vimto reports a 61% surge in adult squash sales, with Vimto the fastest growing brand and cordial the fastest growing sector of the adult soft drinks category.
Vimto is the UK’s fastest growing major squash brand, out of the brands worth over £15m, and is growing in both standard and No Added Sugar variants.
Ed Jones continues: “There’s an evergrowing appetite for more exotic flavours, and taste remains at the forefront of the category. This is a driver of growth for us, as the Vimto portfolio is built around taste, not only with our unique recipe, but with our Vimto Remix sub-brand. We’ve seen a steady increase in No Added Sugar squash sales in particular, a trend we foresee continuing this year.”
“Vimto Squash is growing in both standard and no added sugar variants, with no added sugar accounting for 55% of Vimto sales, up from 52% a year ago. Vimto’s brand value is a record high of £86.2m, a £10.2 m jump in the past year.”
The lower sugar trend has also been good news for Scott Meredith, UK Sales Director at Lucozade Ribena Suntory: “As consumers become more and interested in living healthier lifestyles, we have seen a long-term trend to drinks with lower sugar contents. Shoppers still want great-tasting drinks, so our development team has worked incredibly hard to deliver on both counts.”
Lucozade Ribena Suntory’s recent category-leading reformulations mean Lucozade Energy now contains less sugar, and their zero sugar alternative Lucozade Zero complements the core range, offering consumers a full selection. LRS have also reduced the sugar in their fruit carbonate Orangina to reflect changing consumer demand.
Scott Meredith is keen that retailers should be able to pick up Orangina Light and other low sugar SKUs in depot to ensure their shoppers have these options in store:
“We advise wholesalers to list the various healthier carbonated soft drink SKUs. Having the right range in the depot encourages retailers to stock up and helps them drive sales from consumers looking for healthier products.”
Lucozade Energy, the UK’s number one energy brand should command a significant share of the soft drinks aisle in depot as retailers look to stock up on bestsellers most regularly. LRS offer customers a range of flavours and formats to target different types of shoppers, including PMPs, to help retailers demonstrate value-for-money in store.
Similarly, Lucozade Sport, the bestselling sports drink, should form the basis of a store’s sports drink range. Lucozade Sport Fitwater was launched in 2017 to help retailers grow their bottled water sales with a new functional offering. The drink contains four key electrolytes to help replenish consumers, including magnesium, which contributes to electrolyte balance and reduces fatigue, as well as calcium, which helps muscle function.
Carabao – racing up the energy drinks league
“Since Carabao launched here two years ago,” says John Luck, CMO at Carabao, “we’ve made a tremendous impact on oconsumers. Our high-profile football partnerships with Chelsea FC, Reading FC and the English Football League, principally our sponsorship of the EFL Cup, now The Carabao Cup, has driven unprecedented awareness of our brand, which was previously relatively unknown outside its homeland in Thailand.”
“We accept that to be successful in a market dominated by brands that have invested heavily and consistently for many years, we have to work incredibly hard to encourage a consumer to pick up a can of Carabao, so we adopt a challenger approach. Prior to England’s first World Cup game, we launched the acclaimed We Are Female Fans campaign, which successfully changed the way female football fans are represented by Google searches online. Our continued investment in marketing has driven consumers to enjoy what we stand for and keep buying our products.
Significant distribution growth in the last 12 months, including Morrisons, Co-op, Sainsburys, BP, WHSmith, McColl’s, Booker and Bestway, has also helped to step-change the brand’s profile among UK soft drink consumers: “Our products are very different to ‘traditional energy drinks’; they’re not syrupy or sickly sweet, but lightly sparkling and exclusively low or no sugar. What’s really important is bringing new drinkers into the category, so the fact that almost 60% of our drinks are now bought by customers who are new to energy drinks is a huge signifier of success for us in the UK market so far, as well as a positive step forward for the future of the sector.
“Our two best-sellers flavours are Carabao Green Apple and Carabao Mandarin Orange, and their high repeat purchase rates are strong. We also have a long list of new flavours we’re planning to bring here. Naturally, and for the UK specifically, our exclusively low or no sugar products will play a vital role in the years ahead, with attention still focused on the unfolding conversation around sugar tax and the government’s review that could see the sale of energy drinks banned for children.
John Luck, continues: “As a responsible energy drinks brand, Carabao’s products are already able to stand up against scrutiny given our low sugar content alongside the fact that we don’t target children, but rather male and female adults in need of a greattasting and refreshing energy boost.”
What wholesalers need to do to maximise sales
“Maximising visibility of Carabao initially in depots and then through to shoppers in-store is key to our success. We are investing heavily to drive consumers to our stockists via TV advertising, high-profile football partnerships, promotions and more. If wholesalers’ customers can’t see our drinks in depots and subsequently don’t stock Carabao, and if shoppers can’t find our drinks in the shop when they are stocked there, we naturally see less engagement and sales as a whole. Given how the majority of Carabao sales drive growth to the energy drinks category as a whole, this is a huge missed opportunity for us and our consumers, but vitally also for retailers.”
Rockstar does the Twist
Barr Soft Drinks is driving innovation in energy drinks with the launch of Rockstar Twister, a new range from the UK’s largest big can flavoured energy brand. Available in two flavours – Smashed Blue Raspberry and Wacked Red Berry, Rockstar Twister taps the trend for retro flavours, offering a full flavour hit at only 25 calories per 100ml. Rockstar remains the category leader in innovation, with the brand’s most recent launch, Rockstar First Start selling 3.9 million cans since it was launched in 2018, says Adrian Troy, Marketing Director at Barr Soft Drinks: “Rockstar Twister’s introduction will kickstart energy drinks innovation for this year, offering the great tasting, full flavour energy boost shoppers have come to expect from Rockstar, with a retro twist and fewer calories.”
With consumer taste tests showing 71% of consumers would buy, Barr Soft Drinks recommends retailers merchandise new Rockstar Twister as part of the ‘on the go’ section of the chiller to meet the needs of busy shoppers.
Red Bull has been iconic for decades as an energy drink brand. “These days the sugar free variants are growing, reflecting the healthy living trend,” says Mark Bell, Strategy and Planning Manager at Red Bull UK. Sugar free is growing 7.1% to £31.9m, and Red Bull Sugar Free 250ml is the UK’s number one low cal sports and energy drink. Red Bull Energy is available in 355ml and 473ml cans, with 355ml growing in value +27.6% annually. In 2018 Red Bull extended its successful Sugarfree range with a sugarfree alternative for every Red Bull variant.
With the heightened importance placed on the health agenda over the past year and the Soft Drinks Industry Levy in place, consumers are swaying towards sugarfree options. Diet products are worth £144m, 11.3% of the sports and energy category.
“The UK energy drink market has been built by big brands, but consumers are always on the lookout for something new and a significant number of innovative smaller players have come in with strong propositions and made them work. Once brands are established the key to additional sales is flavours,” says Simon Gray, Founder and Managing Director of Boost Drinks.
Seventy percent of all ‘Stimulation’ sales are original variants, Simon points out, whilst eighteen percent are flavours and growing sixteen percent annually. “So it’s important that wholesalers carry the full range of Boost flavours in good space, to optimise these trends.”
Adding new and exciting flavours to the Boost range creates excitement and brings in new customers, as well as giving existing customers something new to try. Last year Boost launched new 250ml sugar-free Punch Power, which captured emerging fruit flavour trends with a punch fusion of mango, passionfruit & cranberry. They also introduced Cosmic Glow, a vibrant mix of grape and cherry. All 250ml Boost variants are available as £0.49 PMPs.
Britvic, marketer of the Pepsi drinks range in the UK, is launching a new citrus addition to its popular Drench range, Mandarin & Lemon. Britvic has also made the existing Drench range free of preservatives and given it a bold new design, creating further stand out on-shelf. Two out of three adult consumers rate the new launch, Mandarin & Lemon the most ideal flavour from the range.
DRGN (pronounced Dragon) is the world’s first Turmeric Superdrink. The idea to create it began in 2012, the Chinese “Year of the Dragon” when Vishal Sodha, the founder was living in Hong Kong. “Back then there were hardly any adult soft drinks or mixers that weren’t full of sugar, caffeine and artificial flavours. Travelling around the Far East, we discovered the natural botanicals originating there, such as turmeric, black pepper, ginger and ginseng, used for thousands of years in food, drink and holistic medicine. There is a clear trend towards ‘Superfoods’ – particularly turmeric – and a shift towards healthier drinking, with more people reducing their alcohol. So we created DRGN – a fusion of Eastern alchemy and Western science, rich in pan-Asian ‘Superfoods’. It has been nominated for three World Beverage Innovation Awards, Best Premium/Adult Drink, Best Beverage Concept and Best New Brand / Business.
Flavoured milk continues to deliver strong year on year retail sales, with the category showing 9% growth and worth £349.7m. Mars Chocolate Drinks and Treat’s 350ml milk drinks range includes: Mars, Galaxy, Mars Caramel, Milky Way, Bounty, Maltesers, Snickers and M&M’s Peanut. For consumers who enjoy milk drinks at home the range also includes a 702ml bottle of Mars® Milk in no added sugar format. Mars Chocolate Drinks and Treats have declared that by the end of 2019 all their milk based drinks portfolio will be no added sugar.
Also in flavoured milk, Emma Wood, Head of F’real says f’real milkshakes help wholesalers appeal to adults by offering a soft drink option in four flavours: cookies ‘n cream, chocolate, vanilla and strawberry. “f’real milkshakes appeal to customers of all ages and tastes. Strawberry is a hit with kids, while cookies ‘n cream flavour is a firm favourite with adults. With a range of styles from thick shakes to frappes, frozen lemonades to freak shakes, the opportunities are endless. With 20,000 locations in North America, and new sites added weekly here, f’real has a dedicated band of followers who actively look for the brand when out and about.
In another growing part of the RTD market, Manchester Drinks’ SLUSH PUPPiE Pouches bring a unique offering to the grocery sector with a freeze, squeeze and drink concept in a convenient resealable and mess-free format. The three flavours – Blue Raspberry, Strawberry, and Sour Cherry – have broad appeal and are all-yearround products for days out, parties and anytime treats. They can be sold ambient for consumers to take home and freeze themselves, or frozen in store for ‘on-the-go’ consumption. The launch of SlushPupPouchUK’s social media channels last summer along with sampling and in-store presence showed a huge amount of excitement and nostalgia towards the brand, first launched here in 1974.
The festive season is behind us for another year but Belvoir Fruit Farms’ Mulled Winter Cordial, Mulled Winter Punch and Spiced Ginger Punch are still available and retail for around £3.50 per bottle. Pev Manners, Belvoir’s MD says their seasonal drinks “create interest in a category at a time when consumers seek something inspiring to serve to the growing number of people turning their backs on booze, or give winter gatherings some kind of stand out.”