The wholesale channel continues to be a massively important channel for soft drinks, with these products now a major part of consumers’ everyday lives. In the current difficult economic climate people in the UK are now more than ever having to balance their work and social lives and look for products that fit with their busy lifestyles, helping them to get the most out of their day. Impulse retailers with the right product range can profit handsomely – and so can the cash ‘n’ carry operators and delivered wholesalers who supply them.
Carbonates and bottled waters dominate the market between them and have done so for decades, carbonates at one end offering instant gratification, waters at the other offering rehydration and other health benefits.
With carbonates and waters seeing increased discounting in the major multiples, consumers have never been more price-conscious when browsing in impulse and independent outlets, yet they continue to buy soft drinks in large volumes in the impulse and independent trade, especially when on the move. Two sectors within soft drinks are doing particularly well, premium soft drinks and juice and fruit juice brands.
Fruit juices as a category have been losing out to juice drinks during the recession as consumers have narrowed their drinks repertoire. Cash ‘n’ carries and delivered wholesalers should look to develop a broader offering of fruit juice drinks to take advantage of the fastest growing segment in the market, and enable their retail customers to capture impulse sales from long-time fruit juice drinkers, and in particular younger adults, who have increased their juice drinks consumption in the last year.
Although small, the Premium soft drinks market is growing quickly. Typically these are more upmarket, adult, soft drinks usually found in premium packaged glass bottles and generally containing natural, more unusual, better quality ingredients. The long-established brand leaders Shloer and Appletiser are recognised by over half the population. Joining them on shelf are new products like Marley’s Mellow Mood.
Drivers for premium soft drink purchases include growing numbers of consumers thinking it is worth paying extra for quality goods, whichever channel they are in, and the ban on advertising less healthy soft drinks on TV to under under-16s. The promise of health benefits is the ‘X’ factor most likely to persuade consumers to dig deeper into their pockets. In Mintel’s research 8 million UK consumers would willingly pay more for a soft drink with natural ingredients; while 16 million would if the drink contained healthier ingredients or if there was a low sugar/calorie content without compromising taste.
Finally, if your premium soft drinks range doesn’t yet include a selection of energy drinks, maybe it should. Energy drinks are enjoying a gold rush, with a host of new hopefuls launching in the last few months, leaving retailers pondering which of these premium-priced products to stock and where to put them in store for best results. There’s a clear need for wholesalers to help them maximise the opportunity.