Price-marked packs (PMPs) can be a way to create a point of difference, as more than one in four consumers say they are more likely to shop in a convenience store that stocks them (HIM).
Research shows that more than a quarter of shoppers say clear pricing is an important factor when deciding what to buy, with 62% of shoppers saying they purchase PMPs (HIM).
When lockdown was introduced in March 2020, people turned to their local shops for essentials and treat items. Six weeks into lockdown, nearly half of Brits said they were shopping at independent stores in their area more regularly than they did before the coronavirus outbreak, partly to avoid crowds and queues at the supermarket, and also because they were keen to support local businesses.
With people having spent more time in the home during lockdown there has been an increase in demand for everyday treats like carbonated drinks. But while they’re interested in treating themselves, research shows shoppers are planning to focus more on saving money in the next 12 months, which is understandable considering 75% of households report that their income has reduced since the coronavirus outbreak started (IGD).
“And while larger, at-home packs have a more important role to play than ever, thanks to the rise in at-home consumption during the national lockdown , on-the-go consumption (500ml bottles and 330ml cans) will inevitably make a come-back over time in line with the ease of lockdown measures, as more shoppers start looking for refreshment while they’re out and about,” says Alison Adderley, Field Sales Director at Coca-Cola European Partners (CCEP).
PMPs tap into all of these consumer preferences and behaviours. PMPs offer visible value, reassuring shoppers that they can get the products they want, without being overcharged. In fact, PMPs account for over 60% of total soft drink sales in independent and symbol convenience stores (Nielsen).
In May 2020, CCEP reduced the price points for its range of PMPs across the colas portfolio.
In terms of larger formats to enjoy in the home, 1.75l bottles of Coca-Cola Zero Sugar – including the popular cherry and vanilla-flavoured variants – and Diet Coke are now available in a £1.75 PMP, and 1.5l bottles of Coca-Cola Original Taste and Coca-Cola Original Taste Cherry are now available in a £1.95 PMP.
“And to catch shoppers’ eyes at the front of the store, we’ve made our on-the-go 500ml bottle PMPs more appealing, too,” Adderley continues. “500ml bottles of Coca-Cola Zero Sugar – again, including cherry and vanilla flavours – now come in a £1 PMP, as do Diet Coke Sublime Lime and Diet Coke Twisted Strawberry.”
CCEP also offers Sprite, Fanta and Dr Pepper in PMPs for shoppers to enjoy, at home and on-the-go. Its 500ml bottles of Fanta and Dr Pepper come in a £1.15 or two for £2.20 PMP, with the Sprite 500ml PMP available at £1. The 2l bottles of Fanta and Dr Pepper are available in a £1.89 PMP, with the 2l Sprite PMP available at £1.69.
The energy sector has grown by £139million over the last two years, half of which has been delivered by the Monster portfolio (Nielsen). To help wholesalers tap into future growth, the 500ml Monster energy drinks come in PMP formats too. Monster Energy original and Monster Juiced ranges have a PMP of £1.39 and the zero-sugar Monster Ultra range has a PMP of £1.29. Monster Green four can multipack also comes in a PMP at £4.59.
The six strong Relentless range, which includes original and flavours like Mango and Apple & Kiwi, have a PMP of £1 and new performance energy range Reign Total Body Fuel has a PMP of £1.49.
Matt Gouldsmith, Channel Director, Wholesale at Lucozade Ribena Suntory, comments: “With lockdown restrictions easing and more consumers back in-store, price-marked packs remain incredibly important for both retailers and wholesalers when it comes to demonstrating value to their shoppers. They need to be balanced alongside shopper insight and store-specific requirements in order to meet the needs of consumers.”
“Wholesalers should pay close attention to the needs of their customers’ shoppers and adapt their soft drinks range accordingly so retailers can support their communities,” Gouldsmith suggests.
This is particularly clear when it comes to multi-pack and drink-later formats; LRS has seen strong growth of 20.7% in Lucozade Energy’s drink-later portfolio in the past year, including 1L bottles and multipacks (IRI). In fact, the top three 1L SKUs represent 21% of the brand’s total sales (IRI), meaning it’s increasingly important retailers have a larger format offering in-store for this demand, which includes price-marked packs.
To help retailers make the right choice on what to stock LRS offers the option of price-marked or non-price-marked packs across its range of soft drinks, including Lucozade Energy, Lucozade Sport and Ribena. “Ongoing trends that will likely continue throughout the soft drinks category irrespective of the radical changes brought on by coronavirus are lower-sugar drinks and new flavours,” says Gouldsmith.
Shoppers’ spending on no- and low-sugar drinks has increased by 33% and 29% respectively.
In fact, there is now a higher volume of zero sugar drinks bought than regular (IRI), showing just how important this segment of the market is for retailers preparing their price-marked packs range. LRS has invested in its brands to help our customers offer their shoppers drinks in line with this trend. The very low or zero-sugar alternatives of its core brands, in the form of Lucozade Zero, Ribena Light and Lucozade Sport Low Cal, are available in price-marked packs to offer consumers a full range of choice.
The Lucozade Energy flavours range has already contributed £68.9M worth of sales to the energy category (IRI), showing just how important it is for retailers to offer a diverse selection of flavours. Lucozade Energy is growing +8.3%, mainly driven by flavours which are in growth of +42% year on year (Kantar). On top of this, 23.8% of Lucozade Energy drink-later shoppers only buy flavours (Kantar), showing how stocking a full range of formats can help retailers maximise the opportunity of the flavours trend.
“Including price-marked packs of the latest innovation within their range can also help retailers encourage impulse sales to drive incremental purchases,” adds Gouldsmith.
For example, Lucozade, the UK’s biggest sport & energy drink brand (IRI), has tapped into the no- and low-sugar trend this year with the recent launch of Lucozade Revive. Sweetened with Stevia, and with 4.3g sugar per 100ml, the new sub-brand is designed to offer a different type of energy. Revive has natural fruit flavours, no artificial colours, and vitamins B3, B5, B6 and B12 to help reduce tiredness. “By stocking up on price-marked formats of these new drinks, retailers can help to encourage sales from new shoppers,” says Gouldsmith.
Lucozade Energy has also introduced a cool new addition to its £68.9M (IRI) flavours range. Lucozade Energy Citrus Chill, a new lemon & lime flavour, is available in 380ml price-marked packs, as well as standard packs.
New drink Ribena Raspberry Rays is available in standard and PMP packs. Ribena worked with a group of leading retailers to design supporting in-store POS materials and to hear their views on the drink ahead of its launch. The feedback on the taste was positive, and retailers spoke about the impact that the new launch could have on their summer soft drink sales, with convenience retailer, Harj Dhasee, stating: “The flavour is bold, fruity, nice, and really refreshing. I’m really looking forward to putting it in store.”
Becky Unwin, Senior Brand Manager, Vimto Soft Drinks, comments: “Value is extremely important to consumers nowadays; they are looking for transparency and confidence that the products they are purchasing aren’t overpriced. PMPs also make shopping easier for the consumer as they are clearly marked creating real on shelf presence, which in turn drives quicker purchase decisions.”
“Whilst wholesalers need to keep an eye on their profit margins, the allure of a PMP will help to increase impulse purchases, encourage repeat custom and ultimately drive stock through more quickly. It’s important for outlets to stock a range of flavours and brands within their PMP offering in order to drive these impulse purchases,” says Unwin.
After growing consecutively YOY for the past decade, which has accelerated to a huge 50% for the past three years, Vimto has now hit a record high value of £90.3 million (Nielsen).
Sales of Vimto No Added Sugar is growing at 5%, with sales of No Added Sugar variants contributing to half of all Vimto sales (50%). Vimto is making the most of the growing demand for its No Added Sugar offering by offering it as part of its PMP line up.
“Our brands’ great value, coupled with the fact they’re known and loved by shoppers, makes our price-marked products an attractive proposition to operators,” adds Unwin.
Best seller Vimto No Added Sugar 500ml comes in a £1 PMP, while new Vimto Remix Orange, Strawberry and Lime is available in £1 PMP for 500ml and £1.29 PMP for 2 litres.
Since launching in 2016, Vimto Remix is now worth £9.27million in incremental sales and continues to grow YOY (Kantar).
Vimto Remix Orange, Strawberry and Lime is a citrus-based newcomer to the range, crafted from a mix of the three real fruits and the top secret Vimto blend of herbs and spices.
Wayne Thompson, Business Unit Controller for Out of Home at FrieslandCampina, says: “Price Marked Packs represent 78% of Yazoo’s sales sold in convenience, so they really are a massive part of our business.”
Both the 400ml and the 1litre PMP formats are permanently available in the core flavours (Chocolate, Strawberry and Banana) and limited-edition flavour, Choc-Hazelicious – and Vanilla (available in 400ml only).
“For us, building confidence in our brand from wholesalers and in turn, shoppers, is key,” Thompson continues. “PMPs offer shoppers confidence in value for money when shopping in the impulse channels, which 41% of all Yazoo purchases come from. We know that PMPs inspire trust from both shoppers and operators and that’s why we’ve made them a permanent part of our offering.
“For wholesalers, it is important to cater to a wide range of drinking occasions and offer a range of sizes and flavours to suit every need, from on the go commuters to families looking for something to tuck into at home. We’re seeing that 44% of flavoured milk sales coming from chocolate variants, so it’s key that operators offer new adventurous flavours as PMPs too.”
Yazoo’s 400ml PMP sales are now worth £19.5m. Following the success of the permanent 400ml PMPs, Yazoo launched the 1Litre PMP to tap into a new market of flavoured milk drinkers and open more opportunities for wholesalers to drive sales.
Building on previous limited-edition flavours, Yazoo has launched its third: Choco-Hazelicious. In the total market since launch in April 2018, limited edition Choc Mint and Choc Caramel have sold £6.3m, and are in growth of 39% YoY (IRI).
The new variant is available in four different formats for the first time to ensure it can be consumed both on-the-go and at home: 400ml standard pack and one litre bottle (standard and PMP). Yazoo’s one litre milk drinks are currently growing ahead of the market rate at +31% YOY.
Carabao’s ‘Taste of the Nation’ Report revealed that consumer attitudes towards energy drinks are centred around three key trends: Great taste: 71% of shoppers said they would likely purchase an energy drink if it tasted great, yet only 8% agreed that the energy drinks on offer did actually taste nice; Lower sugar: 48% of shoppers perceive energy drinks to be unhealthy; and Better value: 18% of shoppers felt energy drinks were too expensive.
At only 63 calories per can and a range of fruity flavours, Carabao Energy Drink is already in a strong position. Now, by unlocking the last of the three – a great value price point – with the launch of its ‘only 69p’ price-marked cans, Carabao is poised to meet all of the major consumer demands.
The introduction of price marked packs is important in creating a level playing field within the marketplace for wholesalers and retailers alike, giving both an opportunity to experience sales growth and therefore make a sizeable profit.
Mark Tanner, Head of Wholesale and Independent at Carabao Energy Drink UK&I, said: “The new ‘Every Day Low Price’ strategy put in place by Carabao means wholesalers can now purchase packs from the brand at a fixed price. In turn, this means retailers stocking Carabao will be able to measure and uphold their POR (profit on return) for each case, maintaining their profit margin all year long. This is incredibly important, especially in the uncertain times we are currently living in.”
By benefitting from all three of the consumer trends listed above Carabao Energy Drink is driving category growth and incremental sales. In fact, 33% of Carabao sales growth comes from shoppers who are new to the category (Nielsen).
Carabao Energy Drink is offering wholesalers a cash incentive for their customers for the month of August 2020, to reward shoppers and drive loyalty among their customers.
When retailers purchase any case of Carabao Energy Drink (plain or PMP) they will be in with a chance of winning one of ten £500 cash prizes, with one winner’s prize upgraded to £5,000. Every participating wholesaler is guaranteed a £500 winner and subsequent entry into the main draw.
Carabao urges depots from participating wholesalers and buying groups to have plenty of Carabao in stock as the competition will undoubtedly accelerate demand.
Simon Gray, Founder and Managing Director of Boost Drinks, comments: “Our Boost Sport range is currently the fastest selling sports drink brand where sold and our take home 1l Energy SKUs lead their category as the number one take home energy drink, accounting for 60% of the entire category (IRI). Overall our ranges continue to produce strong results across the board and we hope that this will continue as we progress into the second half of the year.”
Boost’s original energy range continues to be a popular choice and is the second fastest selling energy SKU in the UK (IRI).
“Boost continues to deliver record performances across our ranges with every Boost brand growing within its individual segment,” adds Gray. “Since our inception we have been dedicated to the independent channel and that is not going to change as we move forward.”
The brand’s new coffee range continues to perform strongly in a rapidly growing market that has seen 51.9% growth in value YOY. On top of that Boost continues to perform well in the more established energy market where Boost Energy has grown by 10% volume and 6% value since this time last year (IRI).
KP’s PMP portfolio is currently worth £52.7m RSV and growing, out-performing market PMP growth at +26.5% (Nielsen). The brand offers retailers 21 PMPs across the KP family and continuously look to add value to retailers with both variety and promotion.
“At KP Snacks we want to help retailers increase CSN sales by ensuring we offer the right product range in the right case formats, boosted with the right promotions and in-store merchandising,” comments Matt Collins, Trading Director at KP Snacks. “With consumers visiting stores more than ever before, we have the opportunity to increase sales by launching new products, promotions and flavours to keep consumers excited.”
The Hula Hoops Big Hoops range grew +25.4% YoY to 45.6m (Nielsen). £1 PMP Hula Hoops BBQ became the no. 1 selling £1 PMP in the Convenience channel (Nielsen).
39% of snackers say that their busy lifestyles make snacking a necessity (Mintel) and 23% of shoppers specifically look for single portion packs (HIM) whether it be to satisfy hunger or keep their energy levels up between meals.
PMPs cater specifically for these shoppers who purchase on impulse as they provide much needed value from the bigger eat, whilst offsetting any potential price perceptions. 33% of shoppers believe that PMPs are cheaper than non-PMP products, and 57% want to see PMPs on crisps, nuts and snacks (HIM). Almost half of shoppers also like PMPs as it means they don’t have to ask the price in store (HIM).
“Stocking a range of PMPs is crucial for driving sales within convenience,” adds Collins. “Across the market, £1 PMP ranges are growing in value at +12.1% versus non-PMP formats at +7.6% respectively. PMPs are popular with retailers too, with 83% saying that PMPs sell faster than non-PMPs and 82% stocking them to stay competitive.”
Monisha Singh, Shopper Marketing Manager at Kepak Consumer Foods, comments: “With visits to convenience stores becoming more prevalent among shoppers, there is an increased demand for products that clearly state their price to aid the speed of shop.”
More than 1 in 5 shoppers are more likely to buy a product if it is price marked and PMPs provide a clear uplift in impulse sales as attractive price points encourage shoppers to purchase items they had no intention of buying when they entered the store.
“Savvy shopping is no longer just the domain of those on a tight budget. For many shoppers, the stigma once associated with finding a bargain is waning and they’re prepared to seek these savings, becoming common practice in FMCG today,” adds Singh. “PMPs at accessible price points help to attract new customers and encourage repeat purchase from both brand loyalists and impulse shoppers.”
At a time of low confidence in spending, the price sensitivity shown by shoppers is set to continue through 2020 and the convenience channel will continue to benefit by offering price marked packs. Products like Rustlers that are backed by sustained, heavyweight marketing support will have even stronger appeal.
Rustlers is the UK’s top-selling micro-snack, worth £105.8m and going from strength to strength with YoY growth of 9%, making it one of the UK’s biggest FMCG brands (Nielsen).
Rustlers has a range of products that feature in the key consumption occasions of breakfast, lunch and dinner, with a major presence in three of the key shopper missions; food to go, meal for tonight and top up, making the range a one stop shop for the convenience channel.
Kepak has developed a range of PMP products that allow wholesalers to provide the products that their retailers need to meet the needs of price-conscious shoppers.
The Rustlers Quarter Pounder, £2 PMP, is the No.1 selling micro-snacking product in impulse, selling seven every minute, and meets shopper demand for a classic burger solution.
Kepak launched the Rustlers All Day Breakfast Sausage Muffin, £1.75 PMP, in 2018 led by insights that showed Rustlers was being consumed at breakfast time. It has quickly become one of Kepak’s top-selling products, purchased by almost 5% of UK households in the last year and worth over £1.9m in the impulse channel.
The Rustlers Southern Fried Chicken Sub, £2 PMP, is the best performing chicken variant in the micro-snacking market making it a must stock line. Ideal as a lunchtime option, it helps the channel compete with popular high street foodservice options.
The Rustlers Moroccan Vegetarian Burger, £2 PMP, is Kepak’s latest innovation and is designed to meet the growing interest in meat free and international cuisine flavours.
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