Like ice cream, much of the soft drink category's success is down to the weather, so sales were jollied along last year by us enjoying the eighth warmest July on record and driest September since records began although August was wetter than hoped. Then there were the sporting events including the World Cup, the Commonwealth Games and the Tour de France that all helped sales.
Britvic's review, based on Nielsen Scantrack, 52w/e December 27, 2014, revealed that the grocery channel remains the largest, accounting for almost three-quarters of all soft drinks value sales. However, the good news for impulse outlets is that sales of soft drinks bought for immediate consumption continue to grow with can, 500ml/600ml PET and carton formats experiencing an increase of 5.9% value sales and 5.8% volume sales in 2014, a trend that only looks set to grow and develop as all-day refreshment opportunities continue to expand. But what are consumers drinking from these packaging formats?
Cola is king
Across the entire grocery/convenience channel, cola is still king (worth £1.6bn) although we know that for many forecourts, energy drinks are now bigger sellers. However, Britvic's review doesn't make the distinction between standalone convenience store and forecourt stores so that's not reflected here.
Cola may be the biggest seller overall but 2014 was the first year that it saw marginal decline in its market-leading position, dropping slightly both in terms of sales value (-0.2%) and volume (-1.6%). Coca-Cola and Pepsi remain the nation's favourites, with no sugar Pepsi Max helping to increase value sales for Pepsi by +8.8%, compared to a drop of 2.5% in value sales for Coca-Cola.
The biggest news last year in the cola category was the launch of 'green Coke' aka Coca-Cola Life. Described as a 'mid-calorie drink' it is sweetened from natural sources, namely a mixture of sugar and stevia leaf extract, to give it a lower calorie count than 'red Coke'. So consumers can now buy Coke, Diet Coke, Coke Zero or Coca-Cola Life. To die-hard Coke fans, the range is easy to understand but to other consumers it may be a tad confusing. Indeed recent research found that not all British consumers fully understand the benefits of each brand. For example, five out of 10 consumers do not realise Coca-Cola Zero is a no sugar, no calorie drink. Coca-Cola's answer to this is its new 'one brand' strategy where new pack designs emphasise the distinct characteristics of each Coca-Cola product, making choice easier and simpler for consumers.
From this month, advertising will feature the full range of Coca-Cola variants and the lower and no sugar and calorie variants will be presented in the final frames of all Coke TV advertising. At the same time, the branding on every can and bottle, whether sweetened by sugar or by low-calorie sweeteners, whether caffeinated or non-caffeinated, cherry or vanilla flavoured, will be in the same style, with different colours distinguishing each variant. And on-pack communications will include clearer descriptors to highlight the benefits of each drink for example, 'zero sugar, zero calories'.
Using this new strategy Coca-Cola will for the first time use its sponsorship of a major international sporting event, in this case the Rugby World Cup 2015, to promote all four variants of Coca-Cola and to 'hero' Coca-Cola with zero calories.
Glucose and energy drinks continued to see strong growth, and sales value increased across the segment by 4.6%. Sales were up 3.9% in impulse outlets, worth £532m. Growth was slightly higher in grocery multiples than in the convenience channel. Britvic says this may point to more and more people seeing energy drinks as a cupboard staple for when they need a boost.
Within the total grocery and convenience sector, the segment was driven by Lucozade and Red Bull the former remained the segment's best seller. Monster also performed well with both strong value and volume growth.
Monster Energy is building on its 11.6% brand growth (Nielsen stats) by launching a new promotion where consumers have the chance to win a 'once in a lifetime' track experience with Mercedes AMG Petronas Formula One team driver and 2014 FIA Formula One World Drivers' Champion Lewis Hamilton.
The prize includes a 'meet and greet' with Hamilton, followed by the chance to accompany him on a lap of a track and a photo and signing session. Consumers enter via the Monster Energy website. The promotion will be communicated through pos and supported by a PR and marketing push.
Caroline Cater, operational marketing director at Coca-Cola Enterprises, says: "With the energy drinks sector in continued growth, we are confident that Lewis Hamilton's huge draw will encourage further growth for both the brand and the sector as a whole."
Meanwhile, Red Bull is boosting its range of flavours with the launch of the Tropical Edition, available in 250ml and 250ml price-marked packs (£1.19) and four-can multipacks. The introduction is being supported by a comprehensive marketing campaign, leveraging the brand's social media presence and key summer occasions, including Red Bull's popular events. For example, over 50,000 consumers will be sampled in 2015 when both the Red Bull Air Race and Red Bull Soapbox return to the UK.
Lucozade Ribena Suntory says new variants from Lucozade Energy delivered £18m in value within the sports and energy category last year (Nielsen). The latest flavour to join the range is grafruitti, a combination of mixed berries and citrus with an exotic twist. Lucozade Sport too has a new exotic flavour mango & passion fruit, which is backed by a £9m marketing investment including TV, sponsorship, digital and in-store activity. Research for the new flavour found it had strong appeal; broadening the category reach and helping retailers recruit new shoppers. Indeed 45% of consumers said they would buy the new product in addition to the existing range.
Coldies but goodies
Riding on the coat tails of the coffee shop revolution, the iced tea and coffee sub-sector has seen the biggest growth in soft drinks for the fifth year running (up 30.7% value to £68m and volume +28.5%). Although off a smaller base than other sub-sectors, Britvic says iced tea and coffee are seen by consumers as affordable, yet indulgent treats tapping into the growing consumer desire for exciting on-the-go drink options.
Britvic is celebrating the beginning of British summer time with the launch of a raspberry flavoured Lipton Ice Tea, which targets the brand's core audience of 18-34-year olds. Already the number one SKU for the brand globally, raspberry joins existing variants peach, lemon and mango. In addition to the new flavour, the iced tea range has been reformulated with a 30% reduction in sugar, so it now contains less than 100 calories per 500ml.
Lipton Ice Tea also has a refreshed new look for its PET bottle with a more premium sleeved label, bottle shape and texture; giving the product a more modern look.
Onto coffee, and Emmi's Mr Big Caffé Latte 370ml size, which was launched exclusively into Tesco stores last year, is now being rolled out to other retailers. At the same time, the brand has launched a Mr Big Espresso and Espresso Zero into Tesco so expect them to make their way to other retailers soon. Emmi says Espresso Zero is the first iced coffee of its kind containing no lactose or added sugar, and so offering a pure coffee flavour.
Making a splash
The water segment continued to flourish in 2014, showing the second-fastest growth of all the soft drinks sub-sectors over the year (+12.6% value sales).
Increased consumer awareness of the importance of health and hydration were strong factors in this growth. Plain water saw some of the highest growth within the segment, with value sales climbing by 12.6% to £670m, while 'water plus' continued to grow by 9.5% in value.
Britvic says that whereas 2013 saw shoppers stocking up at the grocery multiples for at-home consumption, 2014 saw a much more even split between plain water and water plus purchases in both the grocery multiples and the convenience channels. It reckons the brands to watch this year include Glacéau Smartwater and Ballygowan.
Last year, Great Britain became the first region in Europe to get Glaceau Smartwater, which is the US's leading premium water brand.
Simon Harrison, wholesale director at Coca-Cola Enterprises (CCE), says: "Glaceau Smartwater offers a unique concept to consumers in the form of a vapour distilled water with added electrolytes for a clean, crisp taste, offering a point of difference in a crowded market. With rrps of 57p for the 600ml version, and 89p for 850ml, we've positioned it as a premium product, but with a price point that offers parity with competitors.
"Since launching, the brand has already grown to be worth more than £3.6m (Nielsen), backed by a significant marketing campaign and TV commercial featuring Jennifer Aniston.
"This has helped to create good early awareness of the brand among its target audience, which in turn has helped retailers to boost sales."
Meanwhile, sister brand Glacéau Vitaminwater has a new zero calorie and zero sugar variant. Glacéau Vitaminwater multi-v zero is sweetened from a natural source using stevia leaf extract. Replacing Glacéau Vitaminwater multi-v, the new variant is a lemonade flavour that has zero calories and zero sugar. To create stand out on-shelf, promotional neck collars will appear on all Glacéau Vitaminwater zero bottles until July. Retailers will also be supported with pos materials to drive trial.
As part of a programme of investment for the brand, CCE says there will be further innovation in the Glacéau Vitaminwater range in the coming months.
Squash gets diluted
Britvic reports that it was a significant year for the squash segment. While traditional concentrate variants lost relevance among consumers and were in decline (with sales value reduced by 4.7% and volumes by 6.5%), innovation in super-concentrate products began to shape the future of the segment.
These included the launch of Robinsons Squash'd from Britvic, CCE's Oasis Mighty Drops and a variety of other branded and own-label products all demonstrating the new direction that this segment will be taking, moving squash to on-the-go consumption.
Robinsons is currently back on TV in a campaign that is running until the middle of June on all channels. In addition there is a wider multi-million pound marketing campaign, including out-of-home six-sheet adverts, digital outdoor creatives and online advertising.
All marketing communication for the brand will highlight Robinsons' great taste and will focus on some of the new flavours being launched.
With an overall aim of driving more shoppers to the category and creating new consumption behaviours and occasions, Britvic is leading with Robinsons as part of its wider vision to transform the squash segment into a new 'dilutes' segment.
Pure and simple
Although it still held onto its position as the second largest segment in soft drinks with a sales value of just over £1bn, pure juice volume sales continued to drop down by 8.5% in 2014, with grocery multiples selling £69.4m-worth less fruit juice overall.
Tropicana still made it into the top 10 grocery and impulse brands with value sales of £246m.
It has just revamped its Essentials range and introduced three new fruit and vegetable flavours, as well as new Fruitamins and Immune Support compact bottles.
The new Tropicana Essentials flavours are: banana, strawberry & beetroot; mango, passionfruit & pumpkin; and pineapple, orange & carrot. Each is a natural source of vitamin A, minerals and fibre and comes in an 850ml size. Tropicana Essentials calcium and Tropicana Essentials multivitamins have a fresh new look, but the nutritional benefits remain the same.
There are also four new 150ml single-serve Tropicana Essentials 100% pure juice flavours which brand owner PepsiCo says are "perfect for an instant boost of nutrition at any time of the day".
Juice drinks proved their continued worth, particularly in the convenience channel, with sales value increasing by 7.9% and volume by 9%. This segment is now worth £197m to the convenience sector, but did not fare as well in the grocery multiples channel, with static value and volume growth (0.4% and -0.7% respectively).
Ribena, Oasis, Volvic and Robinsons Fruit Shoot all performed well, while J20 and its 'Joy in the Blend' campaign is working to breathe new life into premium soft drinks.
Nielsen data shows that Ribena juice drinks are making a significant contribution to the category's growth, performing exceptionally well as part of meal deals and growing by 39.5%. And the ready-to-drink Ribena Tropical flavours delivered 75% incremental sales to the juice drinks category within a year of being in the market. The brand is currently backed by a new competition, 'Win a #Tropicoliday', which aims to drive mass awareness of the tropical range.
The range (mango & lime, pineapple & passion fruit and orange & guava) features within the £1.5m marketing campaign including print, digital and out-of-home advertising, as well as in-store and social media activity.
Sunmagic recently launched a three-strong range of colour-coded kids' juice drinks. The firm says they are the first of their kind to be deemed healthy or 'school-compliant' by new government regulations about what kids' food and drink can and cannot contain.
Sunmagic's 45% Fruit Juice range is packaged in 330ml PET bottles coloured to indicate the flavour of the drink. Amazing apple & blackcurrant comes in a purple bottle; outrageous orange in an orange bottle; and awesome apple in a green bottle. All feature a sports cap for convenience. Each counts as one of the five-a-day recommended fruit portions.
Meanwhile, AG Barr hopes that its new Rubicon Coconut Water, which contains 34% juice, will open up the coconut water market to all shoppers. That's because it describes it as 'the first authentic product available at an accessible price point'. It is available in 330ml and one litre packs, in plain and price-marked packs (99p and £1.79 respectively).
The launch will be supported by a £2m brand investment throughout the summer, including an outdoor media campaign and consumer sampling to drive trial and awareness.
Best of the rest
Sales of fruit-flavoured carbonates sales are largely static. Biggest growth came from San Pellegrino up by over 100% in value and volume to reach £19m as consumers traded up to premium brands.
CCE recently launched a new apple & sour cherry Fanta. Caroline Cater comments: "The new variant has been introduced as part of the ongoing rotation of Fanta flavours, which last year saw the raspberry & passionfruit variant add an additional £2.5m worth of sales (Nielsen), underlining how new variants can help retailers to achieve incremental sales growth."
And the Schweppes range has been expanded with new products, new brand proposition and an advertising campaign aimed at a younger adult audience.
The new line-up of grapefruit & blood orange, orange & cranberry and lemon & elderflower sparkling juice drinks variants is designed to cater for sophisticated palates. CCE says the drinks are one of the lowest calorie of their kind in the adult special sector at 20kcal per 100ml and aim to drive incremental growth with consumers who are looking for greater choice.
They come in 330ml cans (rrp 79p) and 750ml bottles (rrp £2).
Finally, lemonade sales shrunk in both value and volume, yet the segment is still worth a substantial £149m, so there is definitely still demand for it.
dairy done good
Michael Lawrence, sales director at FrieslandCampina says the growing popularity of dairy drinks is a real opportunity for retailers. He points to the fact that the total dairy drinks category, excluding milk itself, is worth £496m a year (IRI data). And flavoured milk has shown especially strong growth, with sales rising over 4% over the past 12 months.
"Offering a tasty alternative to carbonated drinks, flavoured milk drinks aren't just for kids. Shoppers are increasingly buying them as part of their regular drinks repertoire," he says. "Flavoured milk satisfies a different consumption need state it offers more sustenance than other soft drinks and so can be used as a gap filler in between meals or as an afternoon pick me up."
Yazoo has a 68% share of the flavoured milk market within independent retailers (IRI), and it holds the top three positions for the best-selling flavoured milk drinks in convenience stores. Lawrence says the great thing about many flavoured milk drinks like Yazoo is that they don't have to be kept chilled, plus they have a long life.
The brand is now packaged in new bottles that are better for the environment; they are made from a PET plastic that includes 20% recycled material and they no longer need the aluminium foil lid as they have a screw-top to give a leak-proof seal.
The new bottles are easier to recycle, as the body no longer needs separating from the outer sleeve. There is also a new pack design.
These changes follow last autumn's launch of Yazoo yogurt smoothies. There are two flavours: strawberry & raspberry and mango & pineapple.
Both are 100% free from artificial flavours, colours and sweeteners.
"We have three x 3m sections for cold drinks. Everything is chilled except for the large bottles. It can be tricky stocking up the chillers when we're short staffed, but it has to be done. Our best-selling cans are Emerge sugar free, Red Bull and Monster. In bottles it's Pepsi Max, Coke and Diet Coke and also Vimto still.
"Overall energy drinks are our top sellers but what sells best depends on what is on special offer. People like the big cans of Monster but they also like Red Bull. And we find original Red Bull sells best there's not much call for the newer flavours.
"We're on the busy A19 so get lots of passing trade. It's mostly men that buy the energy drinks but women do buy Emerge.
"We also sell a lot of water plain and flavoured. We have a brand called Independent as well as Evian and Volvic."