The soft drinks category has been directly impacted by the varying degrees of lockdown and tier systems that the UK has experienced.
The economic hardship that has occurred as a ripple effect from the pandemic has caused considerable changes in the way consumers are behaving and valuing products.
This has changed traditional shopping missions, purchases and overall basket spend, with many people now more mindful about their spending.
Ian Patefield, GB Wholesale and Independent Outlets Director at Britvic, comments: “Looking to the months ahead, with the roll out of multiple vaccinations against Covid-19 and the government’s roadmap, there is hope of a not-too-distant recovery and already some semblance of normality. As people start to feel more confident about returning to variations of their old day to day routines – whether that be attending small social gatherings or heading out for a summer picnic at the park – wholesalers will need to prepare accordingly to ensure retailers stock a range of soft drinks that cater for the latest consumer needs.”
The pandemic has accelerated health trends, with the value of low-calorie drinks up +7.7% in total soft drinks (IRI), and low sugar cola sales up 22.4% in the last 12 months. Sugar is a key consideration of shoppers, with 33% trying to reduce sugar in their diet (IGD), and sugar free being the number one attribute that prompts a healthier soft drink purchase (HIM).
“It is clearly vital to cater to those looking for low and no sugar alternatives of the core range, with products such as Tango Sugar Free, Pepsi MAX and 7UP Free,” adds Patefield.
Tango, one of the fastest growing brands within the fruit carbonates segment (Nielsen), introduced Dark Berry to its popular sugar free range. Sugar free choices are of particular importance in the fruit carbonates segment, having grown +18% in the last two years (Nielsen). The move follows the successful re-launch of the Tango range in 2019, which is now worth £15.4m RSV (Nielsen), and bought by 2.5m shoppers (Kantar).
Aqua Libra has introduced a new Raspberry & Blackcurrant flavour to its range. The launch joins the current line-up – Cucumber, Mint & Lime and Pineapple & Grapefruit – in single 330ml cans, with a multipack rolling out to capitalise on the take-home occasion.
Infused sparkling water is performing ahead of water plus and total soft drinks, as more consumers search for healthier, less sweet or sweetened offerings for hydration (Nielsen).
“By expanding the Aqua Libra range, we are offering customers choice across flavoured hydration and supporting retailers in unlocking further category growth,” says Patefield. “This will help them in catering for an increased number of shoppers as more and more shop locally amidst the Covid-19 restrictions because of the locality, sense of community and desire to avoid large amounts of people.”
Purdey’s is igniting its natural energy range by adding two new products – Refocus and Replenish. Both additions will offer consumers the choice of a wider range of benefits to meet the different energy needs throughout the day and week. Over the last year, the pandemic has accelerated health trends, creating opportunities for wellness brands. One in five people have been taking vitamins during lockdown, while 47% agree they will eat more foods to support their immune system (IGD). Refocus and Replenish are ideally positioned to meet these growing consumer needs by offering multiple benefits for those seeking energy but looking for a more ‘natural’ lift.
Refocus is a blend of dark fruits, naturally caffeinated and contains guarana and B-Vitamins – inspired by people wanting to stay mentally sharp.
Replenish is a lighter blend of sparkling raspberry juice with rose extract. It is under 50 calories per bottle, enriched with B-Vitamins and magnesium to help restore natural balance.
Robinsons has launched a £6.4m campaign for the summer, with TV, radio, digital, out of home and in-store activation. Set to bring the great taste and real fruit message of the brand to life, the campaign encourages shoppers to liven up their tap water. ‘Let There Be Fruit’ campaign will run to September 2021, uniting the full Robinsons portfolio, including Robinsons Squash, Minis and Fruit Creations.
“Over the past year, Covid-19 has meant that increasing amounts of shoppers have been shopping closer to home, opting for their local convenience store to pick up groceries,” adds Patefield. “Although there is a roadmap set out, there is still an element of uncertainty and shoppers will continue to stick to their usual shopping habits and trusted brands. Robinsons has a well-known range of products available to meet various need states from at-home with Robinsons Squash to out and about with Robinsons Minis.”
Adrian Troy, Marketing Director at Barr Soft Drinks, comments: “Summer is key to the entire soft drinks market and retailers need to ensure that their fixture is balanced to reflect seasonal category uplifts in order to generate maximum profits. From June to August – the crucial period for soft drinks sales – shoppers purchase 15% more soft drinks than any other time of the year, with water, flavoured sparkling water and other flavoured carbonates seeing the most benefit (IRI).”
Despite the pandemic, in Summer 2020 the UK saw a 44% increase in BBQs, with 100 million of these taking place between April and August. And with 73% of the population expecting to have a UK staycation in 2021, retailers can expect this trend to continue.
The balance of Drink Now and Take Home Soft Drinks changed during lockdown as social occasions moved to ‘in home’ and, while we expect ‘food to go’ shopping missions to recover, the warm weather, combined with sporting events and longer evenings creates the perfect opportunity for retailers to continue to drive take home sales by inspiring and exciting their shoppers.
“As the trend of health continues to grow, so does the range of products that are available to shoppers,” adds Troy. “However, taste remains the number one reason for shoppers to choose a soft drink and it is essential that retailers offer a wide choice of flavours to satisfy their many different needs.”
Plain water was significantly hit during lockdown, both from a Drink Now and Take Home perspective, with shoppers switching their spend into flavoured sparkling water as consumers are not prepared to compromise on taste when looking for healthier options.
Flavoured sparkling water delivers 50% more value through retailers’ tills (IRI) so retailers need to ensure they have the right balance of products in their stores to meet shopper needs and maximise their sales. The other biggest growth area in the summer is flavoured carbonates, which sees a +17% seasonal uplift (IRI), with new trending flavours accounting for 80% of sales last summer. Carbonates remain the backbone of the fixture, worth £1.8 billion and accounting for 66% of the total convenience soft drinks category (IRI). It is one of the most important categories for retailers to get right and shoppers are looking for a good range of great-tasting, fruity flavours.
A Red Bull spokesperson comments: “In an all too challenging year for the wider grocery channel, Red Bull remains a genuinely bold brand leader.”
With the overall Soft Drinks category in modest growth at +2.9%, YTD, the Sports & Energy category has outstripped this at a faster pace of +7.7% YTD (Nielsen).
According to the latest insight, within soft drinks, the category growing fastest is Functional which is up +17.9% YTD (Nielsen).
“As an established market leader, Red Bull is driving this brand and sales success story with insight-led range extensions and creative new shopper recruitment, all whilst remaining true to the core values that have made the brand one of the most recognisable and successful in chillers nationwide,” adds the spokesperson. “Overall, Red Bull is growing even faster than all other Soft Drink categories with +18.8% YTD (Nielsen) in value, performing well across every channel.”
With the reduction of organic on-the-go sales during 2020 and early 2021, multipacks and larger formats have been crucial in bolstering the category. Average sales price per unit shifts have been driven by increased shopper demand for multipacks due to a change in purchase behaviour over the last year, along with more demand for different sizes in the Red Bull portfolio.
Red Bull has long committed to offering shoppers choice across the portfolio, from core SKUS to sugar free and flavours, the Red Bull proposition has something for every shopper and every retailer.
As we head into summer 2021 and beyond, Red Bull will continue to offer choice to shoppers as the range continues to evolve, meeting new and emerging consumer demands. By embracing these changing consumer needs, the Red Bull portfolio has been enhanced to include a sugar free variant of almost every pack in the range. In the latest six months, Red Bull sold 33.3% more sugar free volume through multipacks (Nielsen) – with these variants also growing penetration by 31.9% (Kantar).
In March, this year Red Bull launched its latest refreshing Summer Edition – Cactus Fruit. With Red Bull Editions growing +83.7% in value last year (Nielsen), now is the time to stock up on new flavours to maximise sales over summer. Red Bull Summer Edition in 2020 proved so popular with shoppers that it has now become a permanent SKU known as the Red Edition.
Shoppers are buying Red Bull Editions more frequently with average frequency double its rate a year ago (Kantar).
Bringing a reformulated Red Bull Zero back to the market last year has also driven brand growth and driven engagement with new shoppers. Selling more than 1.4m cans since its 2020 re-launch (Nielsen) Red Bull Zero is one of the biggest NPD contributors of growth to the overall Sports & Energy category, adding almost £1.9m of value as part of Red Bull’s £35.4m MAT growth vs 2019 (Nielsen). Due to strong rate of sale, trade and shopper demand for this pack, a Red Bull Zero 250ml four-pack has launched to meet these emerging needs for bigger packs for sharing, storing and enjoying.
Nick Partridge Commercial Manager at Refresco UK, comments: “Our advice to all retailers this year is to stock up and capitalise on the opportunities presented by summer 2021. It’s no trade secret that the summer months have consumers reaching for the fridge. At Emerge, from June to August our sales typically increase across the whole range compared to the rest of the year.”
However, this year it won’t just be soaring temperatures that help support the market – an increased focus on outdoor socialising and gatherings of family and friends is also likely to drive a spike in soft drink sales. The easing of lockdown regulations also means the return of gyms and outdoor sports, where the range of Emerge Sport isotonics are often consumers’ first choice for a drink.
“With more people seeking great tasting hydration on the go, we’re excited to see the continued success of our isotonic range, with Orange still holding the top spot, followed by Cherry which was introduced last year and is already exceeding expectations on popularity amongst consumers,” adds Partridge.
With the majority of outdoor events and festivals looking increasing likely to resume, the opportunity for impulse purchasing is high.
“Wholesalers should remain proactive and prepare for consumers being increasingly ‘on the go’ and looking for impulse energy options,” suggests Partridge. “Energy is a high value, high growth category, which is why we suggest maximizing visibility in store through POS and ensuring a range of flavours and variants to keep consumers engaged with the category.”
Refresco is expecting to see an uptick in sales for retailers around transport hubs. The easing of domestic travel restrictions is already encouraging a return to pre-pandemic behaviour, with travellers stopping en-route to buy their favourite refreshment as part of their journey. While there’s still uncertainty around overseas travel, the UK drinks market overall can potentially benefit from people choosing to staycation this summer. “We’re thrilled to have launched our new brand and packaging this year, giving both our wholesaler and retail clients the opportunity to refresh shelves with our bold new look, while still offering the same great value and taste that Emerge customers love,” says Partridge.
Refresco’s range now includes five isotonic flavours, and three functional energy, with several new product launches planned for the rest of the year.
George Phillips, Commercial Director at Wanis, distributor of Tropical Vibes, comments: “While the trends of health and wellbeing continue to drive a large part of the wider soft drinks market and this shows no sign of diminishing, we are seeing some other trends driving consumer interest illustrated by the performance of our own Tropical Vibes brand. We see this stemming from a younger consumer – typically 18-30 age group – looking for something different from the big brands and products and flavours that have been around a long time and to an extent are what their parents consume or are seen as conventional.”
This is best summarised as novel and interesting flavours, bright standout packaging, accessible pricing, and something a bit new, novel and quirky that tastes good and is an enjoyable and fun experience.
“Our take-out from this is that when all is said and done, the one factor that consumers demand as much as any of the others is taste – something we have worked hard to achieve with Tropical Vibes – and this is perhaps something that the drive for health has missed,” adds Phillips.
Key to Tropical Vibes’ success is a rolling NPD program to keep the brand fresh and exciting and to address consumer demand and trends for new flavours and experiences.
The Originals launched at the end of 2018 for the 2019 Season. These were joined in June 2020 by the Lemonades range, and launching now is a brand new range of Sours.
“Taking their inspiration from the best-selling sour confectionery flavours, again made with real fruit juice so putting flavour to the fore and featuring fun and impactful labels, we expect Tropical Vibes Sours to continue the charge into territory not inhabited by the major brands, that has proved so successful over the past 2 years, says Phillips. “We are already working on the next innovations for the Tropical Vibes brand and remain committed to an annual NPD launch to keep the brand firmly top of shelf, mind and mouth!”
Amy Burgess, Senior Trade Communications Manager at Coca-Cola Europacific Partners (CCEP), comments: “This summer represents a huge opportunity for wholesalers. As restrictions begin to ease, it is likely friends and families will look to enjoy social occasions in the sunshine, whether that’s drinks in the garden, BBQs with friends or picnics in the park.”
Soft drinks – and sparkling drinks in particular – help to bring social summer occasions to life. Colas, flavoured carbonates, mixers and energy drinks all have an important part to play – especially those from leading, trusted brands, which represent guaranteed quality at time when many consumers remain focussed on affordable treats.
Within grocery and convenience, Coca-Cola continues to drive growth, led by Coca-Coca zero sugar (Nielsen), Fanta remains the number one flavoured carbonates brand in GB (Nielsen). Schweppes is the fastest growing major mixer brand in GB, and Monster Energy is the fastest growing energy brand in GB, worth £341m and adding £74.3m to its retail value over the last year (Nielsen).
With the arrival of hotter summer weather, sales of RTD Coffee also rise. The sector is worth £165.6m and is up 20% in value YOY, making it the fastest-growing segment in soft drinks (Nielsen). Within this Costa Coffee RTD doubled in size in 2020, growing ahead of the segment and adding almost £4m to the segment in 2020 (Nielsen).
Schweppes 6 x 150ml multipack cans are available to wholesale and convenience customers across Schweppes Classic & Schweppes Slimline variants to help tap into the at home mixer occasions.
Adult soft drinks like Appletiser can also offer a sophisticated option to enjoy while others may be drinking beer, wine and cocktails. Made with pure fruit juice, and with no added sugar, Appletiser is particularly appealing to health-conscious consumers. Worth more than £18.5m and growing in convenience (Nielsen), Appletiser can be enjoyed on its own, as a base for mocktails or as an accompaniment to a variety of spirits.
CCEP recently expanded its Monster portfolio with the launch of Monster Nitro, which uses blended gas technology to give consumers an uplift, in an exciting first for the category. Designed to appeal to seasoned energy drink fans, Monster’s signature energy base has been supercharged with a blend of nitrous oxide and carbon dioxide gas, to deliver a uniquely light, dry carbonated texture.
Earlier this year CCEP announced the return of its #WhatTheFanta campaign for its second year, with the launch of a new, bright blue mystery variant in 500ml and 2l packs.
The liquid inside could be any zero sugar flavour which consumers have to guess, and the packs give nothing away. To solve the flavour mystery, consumers are invited to scan the QR codes on-pack to unlock a series of interactive online clues – which will develop week by week.
Matt Gouldsmith, Channel Director, Wholesale, Suntory Beverage & Food GB&I, comments: “Flavours is a strong area of growth for the soft drink category.”
The Lucozade Energy range has already contributed a significant £60.7M (IRI) worth of sales to the energy category, showing just how important it is for retailers to offer a diverse selection for shoppers to choose from this summer. Last year, Lucozade Energy introduced a cool new addition to its category-leading range – Lucozade Energy Citrus Chill. The lemon & lime flavour is perfectly refreshing for the summer months and is available in 380ML PMP and standard packs.
“Wholesalers should stock a range of options to enable shoppers to find the right drink for them throughout this year,” suggests Gouldsmith. “Lucozade Energy’s core range, for example, is our biggest seller within the portfolio and its most popular variants – including Orange, Original – and newer launches Watermelon & Strawberry Cooler and Citrus Chill – should form the basis of any energy range. The core Lucozade Energy drinks will suit many of those shoppers looking for an uplift at any time of day.”