Soft drinks, hard profits
The latest industry trends, according to the experts
IT’S TIME TO BE PICKY
As soft drinks ranges change and diversify, CCEP Trade Communications Manager, Amy Burgess, says stocking the right lines has never been so important
“With a value of more than £8.2bn, soft drinks remain a huge sales opportunity for wholesalers this year, with key trends, such as premiumisation, convenience, flavour diversification, and health and wellness, helping to shape consumer purchasing decisions.
“Health and wellness will continue to be a key trend in 2019. To help retailers and wholesalers keep up with the demand for low- and zero-sugar soft drinks, we invested in developing our portfolio of sugar-free colas. Diet Coke Feisty Cherry, Diet Coke Exotic Mango and Coca-Cola Zero Sugar Peach launched in March 2017 to tap into the growing flavoured cola subcategory worth £170m. The three variants have proven extremely popular with sales topping £20m, of which 60% were incremental to the cola segment.
“Our advice to wholesalers looking to grow their soft drink sales is to pick the products that are being well supported by manufacturers, those that have been developed in response to consumer trends and from large or growing soft drink segments, and finally to avoid duplication. While choice remains important, ranges shouldn’t become too broad and confusing for shoppers. Wholesalers and their customers need to look at their sales data and trim the tail – removing slower-selling lines and duplication to free up space and allow for multiple facings of best sellers or the stocking of new products.”
 Weekly Nielsen Data MAT w.e 29.09.2018;  Nielsen Total GB 16.06.18 / Kantar Worldpanel;  Nielsen Total GB, Value w/e 05/09/18;  Kantar Worldpanel 32w/e 09 Sep 18
FIVE TIPS TO BOOST YOUR SALES
While soft drinks may be a convenience staple that customers will always gravitate towards, Britvic’s Commercial Director – Convenience and Impulse, Trystan Farnworth, still has top category advice to bring home the bacon
1 Stock the right range
It’s important to stock a broad range of branded soft drinks from established segments, such as water, water plus, carbonates, juices and juice drinks, energy and vitality drinks.
2 Great merchandising
Shoppers are often in a hurry as they pop in to pick up bits and pieces throughout the day, so group sub-categories together to make it easier for people to find what they’re looking for. Replicating this in the depot will make it easier for customers to follow suit in their store and we recommend segmenting into four areas: carbonates, stills, energy and vitality, and water and water plus.
3 Highlight NPD
Shoppers want to discover new things, so make sure you stock new soft drinks – such as our recently launched Robinsons Refresh’d range – that stand out. Ensure additional point of sale promotes them in depot and that you encourage retailers to do the same in store to point customers in the right direction.
4 Be visible
Make sure soft drinks are in a prominent location to encourage purchases. Leading brands should always have sufficient space to help customers who are looking for their specific favourites to find them. Restock shelves frequently to keep up with demand – any gaps represent missed sales.
5 Offer value
As well as offering promotions and cross-category deals that can be passed on by the retailer, price-marked packs are a great way of reassuring customers they are getting great value.
ARE PRICE-MARKED PACKS THE WAY FORWARD?
Lucozade Ribena Suntory’s UK Sales Director, Scott Meredith, thinks so – although they shouldn’t be the only focus
Price-marked packs are incredibly important when it comes to demonstrating value to shoppers. Wholesalers should ensure retailers can stock up on price-marked formats of the most popular brands, such as Lucozade Energy and Ribena, to drive sales in this profitable category. We know that price-marked soft drinks have a faster rate of sale than plain packs and this rate of sale has increased in the past year.
“To help retailers make the most of these advantages, PMPs are available across Lucozade Ribena Suntory’s full range of leading soft drinks.
“By displaying the full range in depot, wholesalers can encourage retailers to stock up on these formats to demonstrate to their loyal shoppers they are getting the best value.
“As well as stocking a full range of price-marked cases, wholesalers should make sure their customers can choose from a range of format options to suit their shoppers. Larger format soft drinks, such as one litre, are perfect for take-home occasions, while on-the-go shoppers will be looking for a more convenient size such as Lucozade Energy’s 380ml or Lucozade Sport’s 500ml. These SKUs are particularly important to the independent retail channel, where half of all soft drink purchases are made on impulse.”
 EXT IRI MarketPlace, GB, latest 52 week data ending 22.10.17 – EXT Symbols and Independents, £ROS;  IGD Food to Go 2016
DON’T IGNORE THE PAST
While new trends are guiding shopper behaviours, Barr Soft Drinks’ Marketing Director, Adrian Troy, is keen to ensure wholesalers don’t forget the basics for success
“There are major lifestyle changes happening across the UK and the world of soft drinks is changing with shopper demand for mid-, low- and no-sugar soft drinks growing.
“However, the overriding reasons why consumers choose a soft drink remain constant: great taste, flavour choice and the right pack formats. Although the trend towards lower-sugar products dominate the headlines, there are several other emerging trends that drive shopper decisions, making it essential to stock a varied range to cater properly for different types of shoppers.
“The one-size-fits-all approach doesn’t work for soft drinks and we work hard with our wholesale partners on a national, regional and local level to ensure that they can offer their customers the right range and products for their local shoppers.
“We’ve identified three key drivers that reflect the changing consumer lifestyles, influences and needs in relation to buying and consuming soft drinks, which we believe will be a major contributor to category growth in 2019.
“We’ve used these three drivers – health and wellbeing, taste and fun, and lifestyle and culture – and translated them into six shopper-need states that cover all the major soft drinks consumption occasions. As shoppers differ from region to region, our framework allows the wholesale channel to tailor their fixture at local level to drive sales.”
SWEET PROFITS FOR LESS SUGAR
Red Bull UK’s Strategy and Planning Manager, Mark Bell, gives his view on the key issues to consider when tackling sugar content in soft drinks
“With the heightened importance placed on the health agenda over the past year and the soft drinks industry levy in place, consumers are swaying more towards sugar-free options. Therefore, it’s imperative that retailers offer a low-kcal alternative – meaning that a higher proportion of space is being dedicated to low-kcal products.
“Diet is worth £144 million, which equates to 11.3% of the sports and energy category, increasing by 1.7% from last year.* Growing at 7% to £31.9m, Red Bull Sugarfree 250ml is the no.1, low-kcal sports and energy drink.
“The extension of the Red Bull Sugarfree range is designed to drive value within the energy drinks category, with the brand-new range offering consumers choice and removing the current taste and health barriers to trial. With more than half of shoppers walking away from a purchase if there’s no low-kcal offering, the NPD will encourage more 18–34 year olds, who want to cut down on sugar without giving up on pick me ups, to drink Red Bull Sugarfree.
“Taste and refreshment are always going to be key drivers in the soft drinks market. Busier lifestyles and increasingly time-poor consumers, however, mean that the market is looking for more all the time. Products that deliver added value for a range of occasions, such as multivitamins, protein or a functional energy boost, continue to be popular.”
TOUCH OF NOSTALGIA WORKS WONDERS
When launching the Slush Puppie pouch range, Manchester Drinks Director Richard Benjamin discovered why retro is still cool
“Demand for no-added-sugar drinks and snacks has increased significantly as consumers become more conscious about what they’re eating and drinking. With this trend showing no signs of slowing down, we identified the opportunity to launch Slush Puppie pouches – a taste of childhood for adults without the added sugar, and a treat that parents can feel happy giving to their children.
“The innovative resealable pouch format also allows adults and children alike to enjoy the taste of Slush Puppie all year round and on the go. The product brings a unique offering to the grocery sector with a freeze, squeeze and drink concept in a convenient and mess-free format, which can be bought ambient and frozen at home.
“Together with the highly recognisable branding, this ensures the range has strong impact in stores and will draw shoppers in who are looking to purchase a treat from a brand they know and love.
“Before the launch of Slush Puppie pouches, brand awareness in the UK was already high at 72% and the launch of our SlushPupPouchUK social media channels this summer, along with the in-store presence, has demonstrated a huge amount of excitement and nostalgia towards the brand.”
Twinings Foodservice’s Shopper Marketing Manager, Jacqui Chapman, says flavours in all shapes and sizes are growing in popularity
“With many consumers defaulting to tap water in cafés, restaurants and hotels due to a lack of healthier choices on the menu, Twinings Cold In’fuse offers a great way to create a new range of natural, sophisticated and sugar-free soft drinks.
“Our research* indicates that 68% of adult consumers would typically choose a healthier alternative to a soft drink if available, while 73% would like to see a larger range of sugar-free options. This innovative technology is the first of its kind and opens up a world of opportunities for those looking to offer craft beverages with operational simplicity. Added to sparkling water, Twinings Cold In’fuse percolates and turns the water into a subtle, colourful adult drink that is sophisticated and refreshing option for those looking for a non-alcoholic drink that’s sugar free, all natural and low in calories. So why not offer something completely different, healthy and delicious with new Twinings Cold In’fuse?
“Perfectly served in a carafe with ice and a garnish of fruit, Cold In’fuse is a great way to increase profitable sales beyond standard tap water. Still, sparkling or infused anyone?”
[*Savvy Shopper Panel 2018]
SOFT DRINKS IN NUMBERS
CGA’s foodservice data provides insight into the key trends in soft drinks
£3.05m: the moving annual total for cola in soft drinks, making it the no.1 category in the sector
1.9%: year-on-year growth in value for total soft drinks category
27.5%: percentage growth for mixers in the past year
#2: ranking for flavoured carbonates against other drinks in the category by water and lemonade