Following the glorious Easter weekend, here’s to another outstanding summer for UK soft drinks sales. Last year will be a hard act to follow. UK industry market reports tend to be sober in their use of language, full of British understatement. So, when Britvic’s 2018 Soft Drinks Review describes 2018 as an “unprecedented year for the soft drinks category, even with a number of impactful events to navigate,” they mean it was a real humdinger.
According to Britvic’s report soft drinks delivered value sales of +£2.2bn – an 8% year on year increase – in the convenience and impulse channel. And in the foodservice and licensed sector soft drinks delivered strong total value sales of £7.1bn – an increase of +3.8% year on year.
“2018 was nothing short of extraordinary,” says Rachel Phillips, Britvic’s Out of Home Commercial Director. “We had to contend with extremely cold weather conditions at the beginning of the year, followed by the hottest summer on record for thirty years, which also included the CO2 shortage in early June. “
From the introduction of the soft drinks industry levy (SDIL) to the extreme weather – both cold and hot – and a CO2 shortage, Rachel Phillips says last year’s events “prove how robust the category is and how quick-thinking action and strategies employed by manufacturers and trade customers in convenience and impulse and the on trade weathered the storm that 2018 presented.”
Only 8.4% of the total UK soft drinks market became levy liable in April last year. As Rachel points out, this small percentage is testament to the concerted effort made by manufacturers before the levy came in, to create sustainable solutions through reformulation and product packaging strategies.
“The levy has left an indelible imprint on the soft drinks category,” says Rachel. “Additionally, we’ve seen consumers increasingly looking for low and no sugar drinks, which gives us a clear indicator of the future. Low and no alcohol drinks continued to gain traction in 2018, again pointing to the important role soft drinks – especially adult soft drinks – can play, in the licensed category in particular.”
Looking at key sectors within soft drinks, the cola category has seen a significant volume shift from regular to low and no sugar options. Rachel Phillips confirms that products such as Pepsi Max have gained significant share from full sugar products:
“Post-levy we’ve also seen the tide turn for the dilutes category as the trend towards low/no sugar products continue to grow. This has primarily been driven by Robinsons’ exceptional performance and the launch of its premium Robinsons Creations. Robinsons Creations has been named the top soft drink launch of the past two years.
“Based on Britvic forecasts, extrapolated from IRI data over the past two years, we’ve identified a £100m sales opportunity for convenience and impulse retailers this year,” continues Phillips. “This translates into a chance for every single retailer to put almost £2,200 in their tills by maximising the sales potential of the soft drinks category.”
Britvic has created a simple action plan that it will be sharing on its Twitter feed and through trade press to help retailers realise the potential to generate additional profit. “Our simple statement is that, if you have an hour a week spare in your store, spend it on soft drinks. The time investment will translate into a revenue generating opportunity,” continued Phillips. “We’ll be using Twitter and retail press to talk about the balance between core, top sellers and new products, how retailers can make the most of events and a handy guide to stocking the right range for the type of shoppers who visit your store regularly.”
Rachel Phillips comments: “Since the Soft Drinks Industry Levy (SDIL) came into effect last year, we’ve seen a significant uplift in people switching from full sugar drinks into low and no added sugar alternatives across the board – showing that consumers have embraced the change, and manufacturers are adapting their brands. This trend is helping Pepsi MAX to continue taking share, while 7UP Free, R Whites and Tango have all seen growth following the SDIL.
“We’re very proud that 99% of our GB owned brand portfolio, such as Robinsons, Drench and J2O, is below or exempt from the SDIL, and 90% of our innovation in 2018 was on low and no added sugar products. For the convenience channel, it’s important we continue to offer choice in this growing market to help retailers drive soft drink sales among health conscious shoppers. One of our latest pieces of innovation includes Pepsi MAX Raspberry which delivers on all three category drivers – taste, health and relevance. With Pepsi MAX a driving force in no sugar cola, this new raspberry flavour will be a welcome addition to the portfolio.”
In the foodservice and licensed sector Britvic’s 2018 Soft Drinks Review shows the soft drinks category delivered strong total value sales of £7.1bn – a 3.8% increase year on year. Total licensed soft drinks value sales accounted for £4.4bn (+4.8%) while foodservice delivered £2.7bn (+2.5%).
Soft drinks are by far the drink of choice when people choose to moderate their alcohol intake and two in three consumers want to see more adult soft drinks that are less sweet and favour flavours such as herbs and botanicals.
In the licensed market, growth was driven by managed wet-led, food-led freehold and leased and tenanted pubs. The foodservice sector experienced a high rate of soft drinks sales in quick service restaurants, while soft drink sales in contract catering outperformed the total foodservice market (+4.2%), driven by health, welfare and education.
Overall, strongest soft drinks growth continued to come from the delivery market, food to go, the steady growth of coffee outlets and travel hub venues. Product categories that drove soft drinks performance growth in both foodservice and licensed included cola, which delivered the largest actual value (+8.7% YoY), with mixers at +30.2% delivering the highest value performance. Water Plus also delivered a strong performance with double digit growth (+13.2%) as consumers opt for more considered health choices.
“The key to unlocking soft drinks sales potential in the on trade is by understanding the trends that impact consumers today and in the future,” says Rachel Phillips. “We’re looking at how focus on health and wellness options can drive growth, while premiumisation of mainstream brands can maximise value from the highvolume core. Personalisation has a definite role and we can’t forget about the increasing number of people looking to make their out of home experiences truly one-of-a-kind.”
For wholesalers, offering a wide choice of different products, including a range of flavours and variants, as well as pack formats, is the key to making the most of soft drinks sales, says Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP).
Especially important is keeping a wide selection of low or zero sugar drinks, and wholesalers should constantly review their soft drinks range as manufacturers innovate new lighter options to meet rising demand for healthier options. As more consumers look to make positive changes in their lifestyles to be healthier, sugar content has become a major factor in their choices and they’re continuously on the lookout for more low-sugar options in their drink choices.
Amy says wholesalers should ensure they have a range of healthy drink options available, such as Diet Coke, the number one sugar free cola, and Coca- Cola zero sugar, the fastest growing light cola brand. CCEP recently unveiled two new light cola flavours, Diet Coke Twisted Strawberry and Coca-Cola zero sugar Raspberry. 7.4 million UK households buy flavoured colas, an increase of 1.7 million over the last year, adding +30% growth to Flavoured colas in 2018.
Flavoured water is growing in popularity, particularly among young people and millennials, who are increasingly health conscious but also looking for new and exciting flavour options at the same time, says Amy Burgess:
“Last year we introduced a new flavoured water range, Oasis Aquashock, to our Oasis portfolio, to help wholesalers support retailers in offering choice to young adult consumers looking for something different.
CCEP’s glacéau smartwater portfolio appeals to those looking for healthier, refreshing drinks and includes four sparkling flavours – Berry & Kiwi, Lemon, Green Apple and Grapefruit & Watermelon, all sugar and calorie-free and containing zero artificials.
As people become more calorie conscious and choose fitness-focussed lifestyles, low and no alcohol options are also increasingly popular, with 20 per cent of adults not drinking alcohol at all. Adult soft drinks like Appletiser present these consumers with a more exciting, sophisticated change for special occasions, or an interesting base for a mocktail alternative. Appletiser is made with pure fruit juice and contains no added sugar.
In March CCEP unveiled their biggest innovation for Appletiser in two years, Appletiser Spritzer, a new, canned sparkling fruit juice drink. The product is available in three fruity variants, Apple & Exotic Lime, Apple & Blood Orange and Apple & Passion Fruit. Each one is made with 50% real fruit juice and 50% sparkling water, contains no sweeteners and is Soft Drinks Tax-exempt. Appletiser is up 30% in retail sales value, largely due to the rising demand for adult soft drinks, as consumers look for alcohol-free alternatives.
Flavoured carbonates are now worth £494m, of which CCEP’s Fanta brand is worth £184.8m, a 23.7% value share. CCEP have evolved their portfolio even further with a new addition to the Fanta Zero range, Fanta Grape Zero, combining the popularity of Fanta and growing demand for both flavoured and low sugar carbonates. Fanta Grape Zero is made with natural flavours and is Soft Drinks Tax-exempt.
In February, CCEP expanded their Capri-Sun portfolio, the number one juice brand with a new cherry variant. Cherry is the fastest-growing flavour in the soft drinks category, increasing in value by £17m in 2018. The Capri-Sun portfolio is being supported throughout 2019 by a £1m consumer campaign, including social media content.
CCEP’s Monster range is continuing to grow in popularity and last year reached a milestone of more than £200 million in retail sales. The latest launch is Monster Energy Ultra Blue, a sparkling, citrus and berry, low calorie energy drink. The new variant will help wholesalers to maximise on the demand for low calorie, flavoured energy drinks, which are in 59% value growth and the fastest growing segment in energy. Monster Energy is one of the driving forces, contributing 88.1% value sales to the flavoured low-calorie energy segment. Like the entire Monster Ultra range, Monster Energy Ultra Blue is Soft Drinks Tax exempt and appeals to people looking for a great-tasting energy boost without the calories.
The RTD coffee sector is set to more than double over the next ten years and in March, Monster Energy unveiled its first range of RTD coffee drinks.
Available in a premium ‘touch ink’ black 250ml can, Espresso Monster is a delicious blend of real brewed coffee and Monster energy appealing to coffee lovers and energy drink fans alike, and available in two creamy variants – Espresso & Milk and Vanilla Espresso. Espresso Monster is the only cold coffee drink on the market with caffeine content that can rival a hot coffee.
There’s always room for quality innovation in the soft drinks market. Radnor Hills, one of the UK’s leading domestic soft drinks manufacturers, was founded in Powys, mid Wales in 1990 The company produces a million bottles of soft drinks every day and currently turns over £42 million.
Radnor Hills launched Radnor Plus Energy, its new energy drink, at the recent IFE and National Convenience Show. Radnor Plus Energy is a new lightly sparkling water drink in two flavours, Cranberry & Raspberry and Lemon & Lime. Each 500ml bottle is naturally boosted with seven B vitamins which help the body to release energy and 70mg of natural caffeine – around the same kick as a cup of coffee, but with the added advantage of refreshing hydration too. The spring water used to create the drinks is sourced from the company’s family farm in Powys, mid Wales.
William Watkins, owner and Managing Director of Radnor Hills, says: “We have created the ultimate range of great tasting energy waters that contain natural caffeine. Each 500ml bottle is designed to give you a convenient energy boost without having a dreaded sugar crash.”
Radnor Plus Energy contains zero sugar and just 5 calories. It will RRP from £1.29. The drinks are targeted at convenience stores, travel forecourts, supermarkets, specialist wholesalers, gyms and leisure centres.
Formed in 2014 Lucozade Ribena Suntory (LRS) is one of the leading soft drinks businesses in the UK and Ireland, and part of Suntory Beverage & Food Europe. LRS’ foundations are the much-loved soft drinks brands Lucozade and Ribena, which have been with us for generations and continue to benefit from high levels of brand investment and NPD.
“We’ve invested in our brand portfolio to help our customers offer their shoppers drinks in line with the consumer health trend,” says Matt Gouldsmith – Channel Director, Wholesale at Lucozade Ribena Suntory. “Our category-leading reformulations mean Lucozade Energy now contains less sugar, and our core brands are also available in very low or zero-sugar alternatives in the form of Lucozade Zero and Lucozade Sport Low Cal to offer consumers a full range of choice.”
In recent years LRS have seen a longterm trend to drinks with lower sugar, says Matt Gouldsmith, as consumers become more interested in healthier lifestyles. Shoppers spending on zero sugar and low-sugar drinks has increased by 33% and 29% respectively, showing 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, down 8% after the sugar levy.
Ribena Frusion, Ribena’s latest innovation, sees the brand move into the enhanced and flavoured water category for the first time. Harnessing Ribena’s trusted expertise and passion in blackcurrants, Ribena Frusion is unique in the soft drink category as it uses blackcurrant water that has been naturally infused with real fruit. LRS is backing Ribena Frusion with a new £6.2M marketing campaign tapping into the brand’s enjoyable wellness credentials and heritage as the master crafter of blackcurrants, Emphasising Ribena’s Blackcurrant Artistry since 1938, the campaign tells the story of the craft behind the Ribena brand, targeting shoppers of all ages across TV, video-on-demand, YouTube, out of home, social media, sampling and digital advertising and building on the success of the brand’s previous Ribenary campaign. To get Ribena Frusion into the hands of new consumers, a sampling and experiential campaign also will see 600,000 bottles of Ribena Frusion given away.
2018 was the biggest year ever for Lucozade Sport, delivering total sales of over £131M and growing 14%. Following this success, the brand has teamed up with a British sporting icon, Anthony Joshua, to launch a new special-edition variant to add weight to soft drinks sales this year. Fruit Punch, comes in eye-catching packaging featuring a distinctive gold cap, reflecting Joshua’s Olympic, Commonwealth and British championships.
Lucozade Energy also brought a new flavour to its permanent range at the beginning of this year: Apple Blast. The Apple flavour proved an instant hit with shoppers when it first launched as a limited edition in 2018, and quickly became Lucozade Energy’s third most popular flavour in the independent and symbols channel, after core Orange and Original variants. “The popularity of this launch highlights the interest in flavours from soft drinks shoppers, showing how important it is for convenience retailers to get their range right. “
Finally, Lucozade Energy also recently unveiled a pack refresh across its flavours range. The refreshed designs, available now on Caribbean Crush, Wild Cherry, Brazilian, Pink Lemonade and Apple Blast flavours create more consistency across the range, giving a unified look to drive further stand-out and appeal on shelf.
Adrian Troy, Marketing Director at Barr Soft Drinks says the UK’s £2.4 billion convenience soft drinks category continues to be one of the most profitable categories for retailers during the summer months:
“It is critical for cash and carries and wholesalers to ensure they get the balance of categories right in-depot, with the biggest key drivers being Sports & Energy, Water, Colas and Flavoured Carbs.”
Energy drinks account for 1 in 3 ‘drink now products’ in convenience, with big can energy driving a significant amount of this volume and growing +14%. Within this segment, shoppers are looking for a choice of flavours and Rockstar is the UK’s No.1 Big Can Flavoured Energy Drink, currently growing +8% in convenience. The top two fastest selling flavoured big cans are Rockstar flavours, Punched Guava (No.1) and Xdurance (No.2).
Water is also a key category, says Adrian Troy, growing +5% in convenience. While it is important for retailers to offer trusted, quality brands like Strathmore, currently growing +25%, they also need to consider the growing number of consumers looking for healthier options but not prepared to compromise on taste. Rubicon Spring, a full-tasting product with 15 calories or less, is growing +25%, a massive opportunity for retailers.
In the Cola convenience category, low calorie is driving volume growth +11% with regular colas declining -10%. Barr Cola is performing strongly in this sector, growing +39%. Barr Cola was changed to a low sugar, levy free product in 2017 in line with shopper demand and continues to provide the great-tasting flavour, quality and value that soft drinks shoppers expect.
Flavoured carbonates provide choice for shoppers and are growing +11%, faster than total soft drinks. IRN-BRU is the UK’s No.1 Flavoured Carbonate brand, growing +11%. IRN-BRU XTRA, delivering extra IRN-BRU taste with zero sugar, has generated over £32 million worth of additional sales for UK retailers since launch.
AG Barr has a new category vision, to help retailers understand their shoppers at local level and use the knowledge to increase sales. It focuses on three key drivers, Health and Wellbeing, Taste & Fun and Lifestyle & Culture. Adrian Troy says, “We’ve used these drivers to develop a blueprint for the future of soft drinks merchandising, translating them into six specific shopper need states covering the major soft drinks’ consumption occasions.”
AG Barr’s six consumer need states for soft drinks are:
1) Healthy Refreshment – Water and water-plus products perform an important, functional role
2) Tasty Hydration – Low calorie products with the health benefits of water and the great taste of a carbonate
3) Everyday Enjoyment – The backbone of the fixture needs a good range of great-tasting choices
4) Adult Social – Indulgent treats and options for those that avoid alcohol
5) Connecting Cultures – Vibrant section to tap into growing demand for exotic flavours
6) On The Go – Nearly 1 in 3 purchases is an energy drink so this section needs to offer the right range of products and flavour choices
The relative size of each section, and which products a retailer should stock in each section, will vary dependent on geographical location and shopper profile, so wholesalers should also keep in mind what their retail customers are looking for in their area.
The new Barr vision has been trialled over two months at three convenience stores in different regions with different shopper profiles, delivering an average 18% sales uplift. Barr is backing its new category vision with a range of trade-facing communications, including a new online resource.
Sunmagic, the premium juice producer, is launching into the ice tea market with two premium ice tea drinks, Sunmagic Ice Tea in Lush Lemon and Peach Paradise flavours, in 500ml PET bottles. The low-calorie drinks are suitable for vegetarians and vegans and contain no artificial preservatives, colours, flavourings or allergens. Combining fruit juice with black tea they also have functional benefits, with each ice tea containing added B3, B6, B8, and B12 vitamins.
Justin Thomas, Sunmagic brand manager, says: “The ice tea market has seen huge growth over the last couple of years, yet few widely available ice tea brands have functional benefits. Early feedback for our launch has been phenomenal, from trade and consumers. “
On-the-go is the biggest occasion for ice tea, with 82% of value sales. Lemon and Peach are the flavours most in demand, each growing by over £1m in 2018.
Sunmagic is owned by Multiple Marketing (MM), part of a group of companies which includes The Village Press, a freshly squeezed range of premium juices, R. M. Curtis, nut and dried fruit importer, and Fielding Dairies, a contract packer of fruit juices, smoothies and juice drinks.
Finally Cawston Press are launching Cawston Dry, a new range of sparkling drinks for those wanting an everyday ‘go to’ that’s less sweet than the average soft drink, but tastier and more exciting than plain water. At 10 calories a can, Ginger & Lemon and Raspberry are a simple blend of British sparkling spring water with a twist of Cawston’s pressed juice and natural extracts. Cawston Press’ current sparkling range saw 78% growth in 2018.
Cawston Press’ Managing Director Steve Kearns says: “Shoppers are looking for drinks with low calories and less sugar, without scrimping on flavour. They’re wary of artificial sweeteners and want sustainably-sourced ingredients and recyclable packaging, at a competitive price.”