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Core brands are key to soft drinks category growth, says Red Bull

Merril Boulton ·

Energy, water and cola are the three core sub-categories that will drive 97% of future growth in soft drink sale, according to energy drink specialist Red Bull at its inaugural Category Summit attended by customers from across the grocery, convenience, driving and foodservice channels.

With the soft drinks category continuing to grow, +6.3% (£453m) within the past six years and forecast to expand a further 6.4% to £8.1bn over the next three years , retailers and operators are advised to take learnings from the evolution of mature categories, such as cola, to determine their optimum range. Although NPD has an important role in driving excitement into the category, a minimal 9.6% of total soft drink products drive 80% of category-value sales. This is despite a total of 2,088 new launches in the past three years, of which just three remain in the current top 60 skus .

Gavin Lissimore, head of category marketing at Red Bull UK, said: “Customers should focus on core brands and skus to really strengthen the category, and try not to be blinded by a dependence on NPD. Within energy, specifically, core skus account for 50% of the market, with diet and sizes driving the growth (+60.4% and +14.7% respectively).”

To support the guidance around ranging, further sessions focused on the importance of the shopper and understanding how they think, feel and act, to help increase basket spend. Red Bull suggests that human behaviour is difficult to change, but by offering solutions to time-poor and habitual shoppers, retailers can increase their customer loyalty whilst also driving additional sales.

As well as looking at the role of the shopper and category fundamentals to range and merchandising, a key theme of the day was the use of innovation within online retailing and technology and how this is impacts consumer behaviour and expectations of the ‘norm’. 

‘‘With a constantly changing landscape, due to technological developments and governmental policy, we have an on going challenge to grab shoppers attention and convert sales," said Lissimore. "Despite these challenges, soft drinks remains a buoyant category with consistent growth and opportunity for future expansion. This is particularly exciting for the energy sector, which in a relatively short period, has expanded from the new kid on the block, to a driving force within total soft drinks."

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