- Soft drinks has delivered more growth to convenience retailers than any other food and drink category in 2022, shifting an extra 67.9 million litres and 133.7 million extra units
- Sales of soft drinks have surged by +14.1%, putting an extra £347.4m through retailers’ tills - more than the combined growth of beer, wine, spirits, confectionery, crisps, snacks and nuts
- Britvic’s Soft Drinks Review 2023 sets out how convenience retailers can continue making the most of soft drinks and reveals an opportunity worth £400m a year to the channel
The soft drinks category has delivered the greatest absolute value growth of any product category in 2022, according to Britvic’s Soft Drinks Review 2023, which is now worth £2.8bn to the convenience channel.
Britvic’s annual review has also unearthed huge growth potential for the sector, equating to £8,400 for each of the nearly 48,000 convenience stores operating in the UK today.
Petrol forecourts and outlets at travel hubs delivered the strongest sales growth for soft drinks as these channels have an over-reliance on single-serve soft drinks, according to the report. Sales through forecourts and travel outlets accelerated rapidly in 2022, growing by 31.9% to £443.1m.
Forecourts have been through a rapid transformation since Covid first hit the UK. With lockdown putting the brakes on the transient trade this channel typically relies on, operators were forced to diversify to stay relevant. Ranges were expanded and new mechanisms, such as online delivery, were adopted to allow petrol forecourts to win greater share of top-up missions. Forecourts’ transformation into more diverse retail destinations that increasingly cater for deferred as well as immediate consumption presents new opportunities for soft drinks. While single-serve formats (up 9.4%23) drove the most growth in the channel, thanks partly to the resurgence of on-the-go trade, there is an opportunity to grow larger formats suited for at-home consumption, which achieved strong growth of 9.9% in 2022.23
Energy drinks were the star performer last year, responsible for a huge £96.9m (28%) of the category’s £347.4m growth, followed by cola and plain water, which added just over £70m each and, due to the heatwave in 2022, sales of plain water surged by +39.4% to £250.3m. Interesting flavour profiles and eye-catching new products were also in demand. Pepsi MAX’s® trio of flavoured colas – Cherry, Raspberry and Lime – grew by £6.3m (+16.9%) in 2022, delivering more growth for convenience retailers than all other flavoured colas combined.
Ben Parker, GB retail commercial director at Britvic, comments: “Soft drinks featured in nearly one in four (22.9%) c-store shopping baskets last year, whereas all other impulse categories suffered purchase declines. The opportunity soft drinks is creating, when the right range is on offer, is hard to ignore and it’s important for retailers to make the most of the category, particularly during challenging times. Energy drinks and cola are flying high, and we’ve also seen that adding interesting, limited-edition flavours into the mix can pay big dividends in driving impulse sales when it comes to on-the-go formats. Our limited-edition Tango Berry Peachy Sugar Free, for example, was the number one launch of 2022 and helped to drive an incredible +49.3% growth for the Tango Sugar Free range. That’s more than twice the rate of growth achieved by the brand’s closest competitor, and we’re looking to repeat that success this year with the launch of Tango Paradise Punch Sugar Free as the next flavour in our rotational series. These types of interesting flavour profiles pique shoppers’ interest which is so important in driving basket spend in the convenience channel.”
The return of on-the-go missions
Britain got moving again last year after the upheaval of the pandemic, resulting in on-the-go missions rising from 13% of visits in 2021, to 14.9% in 2022. Soft drinks’ share of these occasions also rose significantly, featuring in 48% of all on-the-go occasions, making them the number one on-the-go item bought in c-stores. The resurgence of on-the-go trade is also changing dynamics in packaging formats, with on-the-go single-serve sales outperforming take-home across all channels. But, with 52% of consumers saying that tighter budgets are making the convenience channel less attractive, where they’re shopping and what they’re drinking is changing.
“The growth we’re seeing in food-to-go missions across the convenience channel presents retailers with an opportunity to attract trade by offering a compelling range of soft drinks that meets consumer needs and occasions,” stresses Parker. ”Our Britvic Soft Drinks Review shows that there is a growing demand for soft drinks consumed on the go. We calculate that this occasion presents a chance to increase soft drinks sales value in the convenience retail channel by £400m a year by 2025. That equates to a sales boost of £8,400 per year for each c-store operating in the UK today.
“While single-serve formats (up +17.5 %) drove the most growth in the channel, larger formats suited for at-home consumption, also achieved strong growth of +9.9% in 2022. Operators should, therefore, ensure that they are selecting their ranges accordingly depending on the space they have available. We’ve seen that linking up key categories like carbonates and juice drinks with food to create compelling snack or meal deals works well for smaller cans and bottles; while take-home options can be used within big night in or meal for tonight displays – the chance to drive sales through soft drinks is there for the taking.”
The continued importance of delivery
The Britvic Soft Drinks Review also highlights the continued importance of delivery for retailers. Although share has fallen since the height of lockdown, delivery still accounts for 6.7% of convenience occasions. Soft drinks are one of the top 10 categories bought using delivery apps, ahead of hot drinks and confectionery. It is also a route that is particularly important in attracting affluent shoppers who spend considerably more per transaction compared to the average store visit. Despite all this, value is still the most important driver for these consumers, who prioritise good prices, low delivery costs and promotions more than in-store shoppers. Operators should identify why people are opting for delivery and tailor their offerings accordingly. Soft drinks are a key category purchased on top-up and meal occasions, appearing in 20% of the former and 15% of the latter so tapping into these occasions is key.
“Delivery is one of the ways retailers can diversify, attracting a younger audience and also putting soft drinks on the map alongside food purchases,” concludes Parker. ”Recruiting Gen Z and winning with food are just two of the five key drivers we’ve identified to help convenience retailers tap into their share of the £400m sales opportunity the channel is facing this year. Alongside these, we talk about maximising health, simplifying shopper experience and evolving energy within the Soft Drinks Review. Particularly at a time when consumers are tightening their belts, convenience can be viewed as a cheaper alternative to restaurants and fast food, so identifying the real areas for growth is crucial for ultimate store success.”
Size of the soft drinks opportunity
Within the Soft Drinks Review 2023, Britvic has identified five key drivers for retailers to bear in mind as they tap into the opportunity on-the-go formats present:
- Recruiting Generation Z Size of prize: +£72m or £1,504/store
- Winning with food Size of prize: +£80m or £1,672/store
- Maximising health Size of prize: +£52m or £1,086/store
- Simplifying shopping experiences Size of prize: +£96m or £2,006/store
- Evolving energy Size of prize: +£100m or £2,089/store