If you want to see the soft drinks category at its best then you need to visit Eurospar Donegall Road in Belfast winner of the Best Soft Drinks Outlet at this year’s Forecourt Trader of the Year Awards.
Everywhere you turn in this busy store, you seem to see soft drinks in some shape or form so it’s not surprising to learn that the category currently accounts for about 10% of non-fuel sales with more than 5% of those sales, contributed from impulse drinks alone. As you enter the store, impulse drinks are immediately on your left, leading into the ’feed me now’ section, which in turn leads into the Daily Deli. Daily Deli meal deals often feature impulse drinks as an add on.
Value is key in this store as many of its customers are on a tight budget. This means soft drinks sales are driven not only from the main fixtures but from promotional locations as well.
Store manager Chris Lawlor says: "Driving a strong promotional message and offering value is an important part of the business. In store we have 12 dedicated gondola ends for promotions and often four or five of these will have soft drinks built into the fixture, often complemented with crisps or snacks, or waters with energy or cereal bars, or lunchbox multipacks with kids’ snacks. We like to make sure we have a wide variety of drinks on offer to cater for all different consumers.
"As well as this we often use space around the shop for building stacks or bulk displays for key lines. This could be where you enter the store adjacent to the coffee machine or in the centre aisle or alternatively in the queue system itself.
"We use pos such as A4 signage on bulk displays and shelf card signage at both promotional end locations and on the main fixture, as highlighting the deals clearly drives additional sales."
Chris says energy drinks are their biggest sellers, however shoppers have moved away from the big, expensive brands and instead go for Boost or Spar’s Blue Bear brand where they can get two cans of drink for the same price as one premium brand. And with Coke, it’s Coke Zero that’s selling best: "The taste is very similar to Coke Original," says Chris, "and I think that sometimes people pick it up by mistake and then stick with it."
Keeping on top of such an important category can be difficult but the store has a dedicated soft drinks ’champion’ who is responsible for date checking and price checking the products regularly. Says Chris: "With a category like soft drinks, you need to have a member of staff to give it a bit of love. It’s very heavily shopped so they can take care of ordering, particularly maintaining stock of promotional lines." In addition, the space planning support team at Henderson Retail ensure planograms are updated regularly to incorporate NPD and remove lines with a low rate of sale.
There’s no doubting that the soft drinks category is one of the most dynamic within the FMCG market, with new lines being launched all the time. If it’s not a new flavour then it’s a drink with some amazing new ingredient.
The latest launches in the energy category are all about ’performance’ energy.
Step up Coca-Cola European Partners (CCEP) with its new Reign Total Body Fuel. It’s described as a new drinks range from Monster Energy "engineered to fuel optimum performance" for workouts and strength training.
Designed to be consumed pre- and post-workout, Reign contains 200mg of natural caffeine extracted from green coffee beans. The no-sugar, no-calorie range also contains a number of ingredients intended to enhance performance, including branched-chain amino acids (BCAAs), which can help to prevent protein muscle breakdown, and L-Arginine, which improves blood flow and stimulates the release of growth hormones.
Additionally, the drinks are enriched with Vitamins B3, B6 and B12, which all are supposed to contribute to reducing fatigue and normalising metabolism. They contain no artificial colours or flavours to increase appeal among target consumers.
Reign is available in four variants: Melon Mania, Razzle Berry, Lemon Hdz and Sour Apple. Each 500ml can sports warrior-themed packaging, with cans available in plain and price-marked packs (price-marked at £1.49). The launch will be supported by event and venue sponsorships, sponsored digital content and in-store pos material featuring global and local fitness influencers including Lisa Fitt and Romane Lanceford from the UK and Game of Thrones star Hafþór Júlíus Björnsson aka ’The Mountain’.
CCEP says the new launch will enable retailers to tap into the performance drinks opportunity. The segment is already worth more than $400m in the US and is growing by 41% (Nielsen).
Simon Harrison, vice president, commercial development at CCEP, says: "There is a growing demand among 18-to-35 year olds who want a drink to help them achieve maximum results when they work out without sacrificing on taste. Reign perfectly matches this demand by offering an energy boost with vital proteins and vitamins to help consumers perform at their peak and aid recovery long after the hard work is done."
He adds that within eight months of launch in the US, Reign gained a 25% market share of workout energy drink sales so CCEP is confident that the brand will appeal to consumers here.
Barr Soft Drinks is also getting into performance energy with the launch of new Rockstar XD Power. Available in two 500ml variants; Blue Raz and Hardcore Apple; the drink’s performance is delivered by 200mg of caffeine per can (just like Coke’s Reign), and like Reign again, is complemented by branched-chain amino acids. The drink also contains the signature Rockstar B vitamin blend which directly impacts energy levels and brain function. Both variants are zero sugar and free from artificial flavours and colours.
"The launch of Rockstar XD Power comes as performance energy drinks with added functionality are delivering high market growth in the USA," says Adrian Troy, Barr Soft Drinks’ marketing director.
"This new product offers a different proposition to current energy products and will appeal to the 61% of men in the UK aged 16-34 who use supplements. In addition low-calorie energy is in strong double-digit growth, so we are confident that Rockstar XD Power will deliver incremental category growth for retailers."
In taste tests he says the new drink performed exceptionally well, with more consumers saying they would buy the brand versus the leading competitor.
Christmas is obviously a boom-time for soft drinks, particularly as many people will trade up out of own-brand or cheaper brands to impress their guests.
"Soft drinks are increasingly important to retailers in the run up to and during Christmas, showing continuous year-on-year growth for the past three years and adding a huge £150m to the category (IRI data)," says Barr’s Adrian Troy.
He adds that soft drinks generate double the value of spirits and seven times that of Christmas cakes over the festive period, further highlighting the importance that retailers should place on the category.
"Shoppers are willing to spend more over the festive period as a treat, with over a third preferring to shop brands and premium adult drinks, so there is an opportunity to increase sales by widening the choice available to shoppers. It’s crucial to get your range right and stock up on those best-selling brands that shoppers will be looking for, in both multipack and larger pack formats, to cater for those preparing for family get-togethers and parties," adds Troy.
Another sales driver is the fact that consumer attitudes to alcohol are changing with many adults cutting back on their intake or cutting it out altogether.
Troy says: "As the number of consumers who choose not to drink alcohol increases, there is a growing opportunity for your soft drinks category to play an even more important role in your store. Many of these consumers still want to enjoy the social aspect of drinking but are looking for more unusually flavoured adult soft drinks and more premium pack formats. There is currently a fairly limited choice for shoppers to choose from when they are looking for an alternative to alcohol and retailers can increase sales by adding additional choices."
Troy points to brands such as St Clement’s (available in Raspberry & Blackberry and Apple & Pear flavours, in 500ml glass bottles) and Bundaberg (a range of craft-brewed, premium, non-alcoholic beverages available in 375ml glass bottles in Ginger Beer or Root Beer flavours) as good examples.
Amy Burgess, senior trade communications manager at CCEP, agrees that consumers look for ’special’ drinks that capture the excitement of the holiday season.
"Mixers are growing in popularity as more people look to recreate their favourite mixed drinks at home, and retailers should consider the importance of mixers alongside alcohol ranges to help retailers cater for customers stocking up for their festive celebrations."
Burgess says that by stocking brands such as Appletiser, retailers can offer a sophisticated alternative to alcohol that the growing number of teetotal consumers are happy to drink while others may be having beer, wine or cocktails. Nielsen data reveals that Appletiser is currently enjoying growth of more than 30%.
Generally, big brands are key to sales success; a case in point is Red Bull. IRI data reveals that in the last 52 weeks, Red Bull has experienced an 11.8% value increase, with sales last Christmas outperforming this at 16.2% (+£4.9m), accounting for two-thirds of the growth of functional energy drinks during the festive period.
What is more, shoppers of Red Bull have the highest spend per buyer over the festive period versus other sports and energy brands, at £6.61 per buyer growing at a rate of 16.6%, plus it is the only top-three energy brand experiencing spend per buyer growth (Kantar data).
Over at Boost Drinks, managing director Simon Gray says Christmas is a time where retailers can really capitalise on larger format sales.
"Consumers are looking to cater for larger parties of people, or taking drinks round to people’s houses. To ensure we are giving retailers the best opportunity to profit from this, here at Boost we decided to bring back a hugely popular promotion on our take-home products just in time for the festive period."
Gray explains that independent retailers can capitalise on even better margins through Boost’s current PET promotions. "Our 500ml Boost Energy Original is currently on a ’12 for 10’ promotion. Additionally, our £1 one-litre PET packs are available in-depot. The £1 price-mark ensures consumers are getting a great deal and retailers are still getting the same, fantastic margins. On top of this, our Boost Energy one-litre is currently the UK’s number one take-home energy SKU (IRI data), giving retailers even more of a reason to stock up now."
Gray also recommends that retailers consider cross-marketing products, such as positioning larger formats of soft drinks and shareable packs of snacks side by side, to further maximise their sales.
Two fruit smoothies have been added to the f’real frozen beverage range. The Strawberry & Banana and Mango & Passionfruit smoothies are made with real fruit, count as one of your five-a-day, contain no artificial colours or flavours and come in at under 250 calories.
The Lucozade Energy flavours range has already contributed £72m-worth of sales to the energy category (IRI data), showing just how important it is for retailers to carry a diverse selection of variants in their chillers.
Fanta Grape Zero, introduced earlier this year following huge demand for the flavour on social media, is already nearly worth £5m (Nielsen). It is available in 330ml cans and 500ml PET bottles.
Mars Chocolate Drinks & Treats (MCDT) has recently added a new Twix milk drink to its range which is a combination of the biscuit, caramel and milk chocolate flavours. MCDT’s range of eight chocolate milk drinks are now all available in 350ml price-marked packs (£1.29).
Irn-Bru Energy is now being rolled out nationally after a highly successful launch in Scotland. The new drink combines the iconic flavour of Irn-Bru with the taurine, caffeine, B vitamins and taste of an energy drink. It is available in sugar and no-sugar options.
Fizzilicious new ice drinks from Polar Krush
Polar Krush has launched Vortex Fizzing Ice Storm, which comes in four ’fizzilicious’ flavours: Blue Raspberry, Strawberry, Lemon & Lime and Tropical.
Each contains only natural flavourings; there is no sugar or artificial sweeteners.
The drinks are sold through self-serve dispensing units, which are available to retailers serving either two or four flavours.
The units feature eye-catching HD digital video display screens and can serve up to 430 drinks per hour.
Not only can retailers earn 83% profit on every single drink sold, early customer trials have shown a significant increase in repeat cup purchases.
Polar Krush has been supplying iced drinks around the world for 21 years. Its new Vortex product is designed to meet consumer demand through high volume outlets, making it ideal for forecourts.
It promises to deliver retailers the best value and largest profit margin in the market with no upfront costs and exceptionally low monthly rental agreements.
All Vortex products are supplied in eco-friendly bag-in-box packaging with compostable and re-usable cup options. The company also has 100% environmentally friendly spoon straws, which are made from paper and recycled cups.
Michael Reid, Vortex sales director, explains: "We want to tap into the growing popularity of fizzy frozen drinks and our aim is to offer consumers an exceptional taste experience, which is also a healthier and more environmentally responsible alternative to what’s currently available."
Water refill guidance from ACS
With more and more stores offering, or considering offering, free water refills, the ACS has launched new Assured Advice for retailers on the different ways they can do this.
The advice starts by pointing out that unless you sell alcohol to be consumed on your premises, you are not legally obliged to offer free water. However, providing water for customers that want to fill up their own containers can be a good way to demonstrate your commitment to the environment.
There are two main ways to offer a water refill service. The first involves a member of staff taking a customer’s container and filling it up from a tap somewhere behind the till, while the second involves providing either a tap or facility on the shop floor where customers can fill their container up themselves.
The Assured Advice covers health and safety ie if you’re providing a water refill facility on the shop floor, it is important to minimise the potential for spillages. It also covers security concerns where you should consider whether to offer a water refill service during times when the business is operating with only one member of staff on the shop floor, which is particularly relevant on a forecourt during the night shift.
The ACS says that while the vast majority of businesses that provide water refills do so free of charge, there is no obligation to do so and you may want to consider whether to require customers to make a purchase in store to be able to fill up their container for free, or whether to charge for the service.
The Assured Advice guide can be found at www.acs.org.uk
Energy sales opportunity
The size of the energy drinks market could grow exponentially if brands and retailers satisfy consumer demands for healthier and tastier products with lower levels of sugar, a new study from Carabao has found.
Carabao’s 2019 Taste of the Nation report found that while 52% of consumers were frequent purchasers (buying every day, several times a week or at least once a week), 13% were occasional purchasers (buying on a monthly basis, while 34% were infrequent purchasers (buying very rarely, have stopped buying them altogether, or have never bought them). Therefore, to grow the category Carabao says brands need to attract consumers who don’t currently buy energy drinks and increase the frequency of purchase of those who do occasionally buy them.
The research found that among infrequent and potential energy drink consumers (people who don’t yet purchase them): only 8% of shoppers associated energy drinks with great taste; 48% perceived energy drinks to be unhealthy; and 35% specifically cited high sugar content as a major deterrent.
Value-for-money was also a critical consideration among those who don’t currently buy energy drinks, with 21% of respondents perceiving energy drinks as "expensive".
John Luck, CMO at Carabao, said: "The energy drinks industry has enjoyed meteoric growth over the last decade. But the double whammy of the sugar tax levy and an increasing consumer desire to look after their health means that a radical rethink is now required."