With 29% of consumers saying they are focussed on sugar reduction following the pandemic (IGD), and with the HFSS restrictions due to come into effect later this year, low and no sugar options should be high on the agenda with wholesalers.
Whilst the regulations will require a lot of changes for impacted retailers and wholesalers, there can be opportunities too.
73% of soft drinks value sales already come from HFSS-compliant products (Kantar) – significantly more than other HFSS categories.
Therefore soft drinks are well placed to replace other non-compliant products in key display areas.
Two thirds of Coca-Cola Europacific Partners (CCEP)’s volume sales (67%) now come from low and no sugar variants, 40% more than 10 years ago.
This means that 86% of all the firm’s soft drink brand ranges will be non-HFSS come October.
Within this, Coca-Cola zero sugar is the fastest-growing cola in GB and Monster Ultra is the number one zero sugar energy drinks range in GB (Nielsen) – not to mention the popularity of other leading HFFS-friendly brands, like Diet Coke, Fanta Zero, Sprite Zero.
“We expect larger packs to remain in high demand as people continue to make the most of the opportunity to socialise at home and enjoy summer occasions in their gardens with friends and family. Value sales of our Coca-Cola and Fanta multipacks continue to grow (Nielsen) thanks to the volume and value they offer, especially for consumers looking to stock up in a single shop,” comments Amy Burgess, Senior Trade Communications Manager at Coca-Cola Europacific Partners (CCEP).
“That said, on-the-go occasions are back, and sales of on-the-go soft drinks are increasing as people get back out and about. That’s why it’s important for wholesalers to find the right balance between on-the-go and at-home formats, keeping space for both. Placing on-the-go soft drinks at aisle ends and till points can help to capture the attention of consumers, and will work well when HFSS restrictions are introduced later this year.”
Fitness and healthier lifestyles remain a priority for consumers, and shoppers are increasingly looking for food and drink with functional qualities that can help them achieve maximum results during sports or workouts. This has given rise to the performance energy drinks segment.
CCEP’s Reign Total Body Fuel range is worth £7.56m and growing by 23.3% in retail (Nielsen). As well as containing 200mg of naturally-sourced caffeine, the recipe is enriched with branched-chain amino acids (BCAAs) to help prevent protein muscle breakdown, L-Arginine to improve blood flow and stimulate the release of growth hormones, and Vitamins B3, B6 and B12, which can contribute to reducing fatigue and normalising metabolism.
To build on this success, CCEP expanded the Reign Total Body Fuel range last year with the launch of two refreshing new variants – Peach Fizz and Orange Dreamsicle. Reign Total Body Fuel Peach Fizz is packed with the flavours of succulent peach and a hint of citrus fruits, while Orange Dreamsicle is inspired by the classic frozen treat with orange citrus and vanilla bean flavours.
Earlier this year CCEP launched Monster Ultra Watermelon, combining a juicy watermelon flavour with the renowned Monster energy blend, giving consumers a refreshing energy boost with no calories and no sugar.
Adrian Troy, Marketing Director at Barr Soft Drinks, comments: “The UK’s £2.9 billion convenience soft drinks category is growing at +6% and is one of the most profitable categories for wholesalers and retailers. By stocking a range of quality and trusted brands from Barr Soft Drinks, there are some key opportunities to drive incremental sales and increase profits.”
Over the last year, the Barr Soft Drinks portfolio of brands delivered an additional £14.3 million in retail sales value to the soft drinks category (IRI).
“Retailers need to ensure that they are stocking a wide range of soft drinks in different flavours and formats to suit every shopper,” adds Troy. “They also need to keep their fixture balanced to reflect seasonal category uplifts, such as increasing facings of chilled carbonates and juices during spring and summer, in order to generate maximum profits from the chiller.”
As the trend of sustainability continues to grow across categories, this has become a key driver for shoppers when making purchasing decisions.
Last year, Barr Soft Drinks announced plans to become carbon net zero by 2040. Under its No Time To Waste initiative, the company will be bringing together multiple energy, packaging and waste programmes to become more sustainable.
Building on changes that have already been implemented, such as 100% recyclable soft drinks packaging, clear on-pack messaging and a 41% reduction in greenhouse gases, No Time To Waste will drive forward even more measures to reduce overall environmental impact. This will include, significantly reducing the use of virgin plastic through 100% recycled film on all multipacks, introducing paper straws on smaller juice packs and being one of the first in the UK to introduce plant-based plastics in its 1L cartons.
IRN-BRU is the UK’s No.1 flavoured carbonate brand (IRI), showing £3 million growth from shoppers in 2021 (IRI). IRN-BRU XTRA, delivering extra IRN-BRU taste with zero sugar, is growing three times faster than the category (IRI).
Rubicon is now worth more than £57 million (IRI) and is growing faster than all other major soft drinks brands in the top 25. Rubicon Spring, the UK’s No1. sparkling flavoured water brand (IRI), brought 55% new shoppers into the category in 2021 vs previous year (Kantar). Rubicon Spring Pineapple Passion launched in summer last year, targeting shoppers at the water fixture who are looking for a new flavour. Rubicon Sparkling Raspberry & Pineapple is the first soft drink in the UK with this fruity flavour combination and the brand’s first Sparkling flavour launch for over 30 years.
Adrian Hipkiss, Marketing and International Business Director at Boost Drinks and Rio Drinks, comments: “With the hybrid-working model continuing to be adopted by many companies even after lockdown, consumers are spending a lot more time at home. This has led to shifting consumer purchasing habits, with larger, take-home formats becoming particularly popular.”
This is especially true in the energy stimulation category, as 1ltr and multipack formats have experienced a huge surge in demand, with total energy take-home format value sales up +32.4% YoY (IRI). As a result, retailers should be providing a diverse range of pack formats and take-home offerings to maximise profits.
When it comes to take-home energy formats, Boost’s 1ltr Original format is leading the way as the #1 1ltr energy stimulation drink. It represents 95% of the total 1ltr energy stimulation unit sales (IRI), with the 1ltr format accounting for 35% of volume sales in the entire take-home energy stimulation category.
“Following the impact of the pandemic, we’ve noticed a much larger focus on health consciousness amongst consumers, with Gen Z in particular looking for healthier, no- and low-sugar options,” adds Hipkiss. “At Boost, we understand that although consumers are becoming more mindful about their sugar intake when it comes to soft drinks, they do not want to compromise on the much-loved taste of full-sugar products.”
Boost has introduced sugar-free SKUs including Rio Tropical Light, which comes in a 330ml can and contains no added sugar, and a sugar-free variant of Boost Original Energy 250ml SKU.”
“With such variance in the customers of wholesalers, it’s crucial that they cater for different budgets and tastes when selecting a product range,” suggests Hipkiss. “A great way to do this is by providing ample flavour options, as 39% of energy stimulation shoppers make their purchase based on flavours alone.”
Boost currently offers an eight-flavour energy stimulation portfolio, with four of the top 5-selling 250ml stimulation flavour SKUs (IRI).
“Also, we highly recommend that wholesalers utilise digital channels to spread awareness of their offers and promotions to drive shoppers to depots and encourage delivered wholesale orders,” adds Hipkiss. “This can be done through the use of website banners and social media posts that highlight key promotions and are a fantastic way to establish frequent engagement with wholesaler audiences and encourage visitation.”
John Luck, Chief Marketing Officer, Carabao, comments: “As lockdown restrictions have lifted and shoppers are making regular visits to their local Independents, the impulse opportunity for single products is continuing to pick up speed as shoppers are likely to grab something on the way to a social occasion. Wholesalers need to ensure they’re stocking the right type of single product, such as Carabao’s ‘only 69p’ cans so that independents can capitalise on the opportunity for the on-the-go purchases.”
Over the last quarter, Carabao has seen an increase of 65.8% growth in unit sales for single pack formats (Nielsen).
Carabao is also one of the fastest growing energy drink brands for single pack formats in the category, with +71% increase in unit sales in the last four weeks (Nielsen).
Carabao’s recent sales data reveals a +67% increase in sales of single formats over the last three quarters, with a +71.1% increase over the last four weeks compared to the same time last year (Nielsen).
“With this data in mind, wholesalers should ensure to stock a selection of low sugar, great tasting energy drinks such as Carabao’s fruity flavoured cans to appeal to the consumer demand,” adds Luck.
While the demand for healthier soft drinks was already very evident pre-Covid-19, the pandemic has made shoppers even more conscious of what they consume and the desire to purchase lower sugar, healthy drinks has increased.
Carabao’s ‘Taste of the Nation 2021’ report outlined that the main factors consumers desire within the energy drink category are great taste, lower sugar, and sports sponsorship. Carabao believes that to truly satisfy consumer demands, brands and retailers alike should pay greater attention to these market trends to ensure that they are addressed.
A recent survey conducted by Carabao of 2,000 UK adults unveiled that seven in 10 adults are concerned about sugar, which has increased following the pandemic (36%).
Two thirds admit to actively looking for ways to cut their sugar intake, with a third of respondents choosing to give up sugar-filled drinks (37%).
“Wholesalers should ensure to stock a selection of low-sugar and healthier energy drinks to appeal to consumer demands for healthier alternatives and to benefit from brands who can continue to market their products in line with the new HFSS guidelines,” suggests Luck. “With less than half the sugar of other regular energy drinks, Carabao contains just 63 calories per can and meets the Government’s strict nutrition criteria for a non-HFSS drink.”
A Red Bull spokesperson comments: “The Sports & Energy category is worth £1.6bn, with growth totalling over £240.3m vs 2021 (Nielsen). This growth has been fuelled by the increasing demand for Functional Energy.”
These drinks have added over £187.6m vs 2021 and have approached the billion-pound segment, today worth over £1.1bn annually (Nielsen). The consistent performance of Functional in the category has ensured that Sports & Energy has remained in growth, with Functional Energy the fastest growing segment in Sports & Energy at +19.6% YTD (Nielsen).
“If wholesalers offer a wide choice of Functional Energy SKUs, from low-sugar options to flavoured variants then you can ensure your outlet appeals to a broad range of shopper behaviours,” says the spokesperson. Red Bull Energy Drink 250ml 4pk is the no.1 best-selling multipack in the Sports & Energy category and, with +28.4% growth, it is the fastest growing full sugar multipack in the entire Red Bull range (Nielsen).
“With penetration growing by 15.5% in the last 52 weeks (Kantar), now is the perfect time for retailers to stock up on multipack formats ahead of the summer season as consumers look to share and enjoy Red Bull together again in the sunshine,” adds the spokesperson.
Sugarfree variants are growing penetration by 24.3% (Kantar), displaying growing demand for low-calorie options. In the last year, Red Bull sold 16.0% more sugar free volume through multipacks (Nielsen) – with these variants growing frequency by 28.0% (Kantar).
Since the 2020 relaunch, Red Bull Zero 250ml has seen £4.6m in Sales Value MAT, also seeing 137.4% growth (Nielsen). Red Bull Zero’s success stems from the growing demand amongst consumers for a drink that offers functionality but with the added incentive of less sugar (Nielsen).
Matt Gouldsmith, Channel Director, Wholesale, Suntory Beverage & Food GB&I, comments: “We have seen a long-term trend towards drinks with lower sugar as consumers are becoming more aware of their health and wellbeing.”
There was a 43.5% (Kantar) decrease in the amount of sugar in take-home soft drinks between March 2014 and March 2020, and low- or no-calorie continues to outperform regular soft drinks, with a 68.6% share of total soft drinks. And when it comes to energy drinks, the no- and low-sugar market has grown more than the full-sugar market over the past year with an increase of over 24% (IRI).
“Wholesalers and retailers should ensure to stock up on lower-sugar drinks such as Lucozade Zero and Ribena Light – worth a combined £46.8M – to capitalise on the ongoing trend towards lower-sugar choices. Ribena Light has grown by over 10% in the last year, which shows this demand among shoppers for lower-sugar soft drinks,” adds Gouldsmith.
Energy drinks have grown by 16.7% since last year and currently make up over one-fifth of all soft drinks sales (IRI), making them a key subcategory for wholesalers and retailers to focus on.
SBF GB&I has developed a strategy that breaks down the soft drink category into four simple consumer need states: Enjoyable Refreshment, Uplift & Energise, Special Moments and Positive Choices. Each of these is based on insights and trends that highlight the headroom for growth and these will continue to dictate the market in the year ahead. To increase relevance and expand consumption occasions requires the right pack, in the right place, for the right occasion.
With 75% of people concerned about their levels of tiredness and stress, SBF GB&I launched Lucozade Alert, a distinctive stimulation drink range. The stimulation drink segment is now worth more than £1BN (IRI), meaning Lucozade Alert responds to a clear consumer need for a stimulation drink which tastes great, is low calorie and relevant to a wider audience. This presents a great opportunity to help wholesalers and retailers drive maximum sales.
“Wholesalers traditionally do well in summer with soft drinks sales. But 2022 could see some changes,” says Andy Lewis, Marketing Controller at Sunmagic Juices, “with carbonated drinks and bottled and flavoured waters facing pressure, and juices and premium adult soft drinks coming to new prominence as healthier treats.”
Sunmagic Juices is a UK-based producer of premium juice, juice drinks, fresh juice and smoothies. Its Daymer Bay Drinks range of premium adult soft drinks launched into the on-trade last summer, and is debuting at the Farm Shop & Deli Show in April, targeting specialist wholesalers serving independent retailers who stock fine foods and high end groceries.
With inflation predicted to rise to 7% by the spring of 2022 and household energy bills and fuel costs increasing, convenience channel shoppers are more likely than ever to scrimp on everyday soft drinks.
The convenience market significantly overtrades in bottled water, with 27.8% of sales (IRI). Both plain still water (+15.3%) and flavoured water (+9.9%) have been performing strongly, as on the go consumers return to more normal behaviour patterns. But pressures on their pockets from rising household bills are likely to lead to significant numbers cutting down on carbonates and scrimping on bottled waters, topping up at the tap before going out.
People want to be healthier: COVID has been a major driver in people seeking healthier products, especially those that offer functional benefits. In addition, the HFSS regulations starting in October 2022 will likely impact consumer demand for healthier soft drinks in both the take home and out of home channels. The overall soft drinks category has been facing pressure in recent years from the macro trend of health and wellness, with two thirds (66%) of consumers in March 2020 indicating that they are “taking precautions to protect long term health, such as changing what I eat and drink and how frequently I exercise” (CGA).
And more of us are reducing or cutting out alcohol. While one adult in five is teetotal, the proportion is highest among 18 to 24 year-olds, where one third claims to be teetotal. In addition, half of alcohol drinkers say they are “limiting” their alcohol intake, so consumer demand for adult soft drinks is set to accelerate its growth. This trend is likely to continue with incentives such as Dry January and Sober October making their way into the mainstream. “We expect adults to opt for premium soft drink options as a replacement for the alcohol they’re missing, with taste being a key purchase driver and good value for money growing in importance in consumers’ minds, given the current economic climate,” says Lewis.
The Sunmagic brand is one of the UK’s most widely distributed ranges of 100% pure fruit juice, juice drinks and smoothies. Sunmagic’s premium soft drinks come in all shapes and sizes, from small cartons for lunchboxes, to on-the-go bottles to drink at work, and larger packs to take home.
The Sunmagic core fruit juice range is available in both 330ml and 500ml bottles including the most popular flavours of 100% Orange and 100% Apple. Confirming the brand’s broader flavour offering, its juice drinks range in 500ml bottles has a wide variety of flavours including Orange & Carrot, Summer Sensation, and Cranberry.
Sunmagic’s Hydra Juice sub-brand offers an extensive range of school compliant, healthy children’s’ drinks. The Hydra Juice range is fully school compliant and comes in 200ml cartons and 300ml bottles. Within the offering, it includes the core Orange and Apple varieties, along with a range of unique flavour offerings such as its Strawberry & Cherry and Raspberry & Blueberry SKUs.
The Village Press brand offers a wide range of premium freshly squeezed and cold pressed products in a wide choice of flavours and formats, namely 250ml, 500ml, 1l and 2.27l, to suit all drinking occasions, whether in or out of the home. Throughout Covid, sales of freshly squeezed juices, especially fresh orange, have grown strongly because of the natural and high source of Vitamin C it offers.
Daymer Bay Drinks’ artisanal range of premium juices and lemonades addresses the trend for consumers being more likely than ever before to choose premium soft drink options, with taste being the key purchase driver for consumers and good value for money growing in importance, given the current economic climate. As consumer demand for adult soft drinks accelerates its growth, Daymer Bay Drinks, which are produced in the UK offer strong sales and margin potential.
Wayne Thompson, Business Unit Controller, OOH at FrieslandCampina, comments: “With a continued approach to flexible working, people are spending more time at home now than ever before. Therefore, buyers are looking for brands that deliver as well in-home as they do out-of-home. Household names have an opportunity here to maximise their reputations and see growth.”
YAZOO’s diverse portfolio taps into two key consumption occasions; relaxing at home and a pick me up in between meals.
The range offers four packs, six packs and one litre sizes in different flavours and ranges and has helped power its strong growth and performance. YAZOO has seen 15.8% growth year on year driven largely by the take-home packs (IRI).
“Consumers recognise our packaging, and they know where they can find us in stores. Even with the change of occasions, we are still seeing growth as shoppers are more likely to try new variants and formats from brands they already know, love and ultimately trust,” adds Thompson.
YAZOO saw sales increase by £10m, to £73.1m last year as it continued to perform strongly and outgrow the flavoured milk category, with the YAZOO range delivering a volume growth of 7%. This growth can be attributed to shoppers buying more volume online by purchasing more packs across the portfolio. ‘
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