Despite the rise in popularity of fruit drinks and smoothies, the UK soft drinks market is still dominated by cola which, according to the Britvic Soft Drinks report, recorded sales of £1.2bn in the take-home market last year, up 2% on 2006. And fruit carbonates, though in decline, were still worth £438m, which is nearly double the size of the smoothies market.
In cola, Coke is still king. According to AC Nielsen data, Coca-Cola is currently worth £499m in retail sales and its sales were up 4% last year, while Diet Coke is worth £399m. And newcomer Coke Zero has grown in value by 49% over the past year and is now worth £60.2m. Zero continues to do really well and although there was some slight cannibalisation from Diet Coke, Coca-Cola Enterprises’ (CCE’s) trade marketing manager, Kenny Chisholm, says it’s added £20m to the category.
Talking specifically about forecourts, Chisholm reckons ’with food’ sales represent the biggest opportunity. "If you look at McDonald’s, its instances of ’food with drink’ sales are running at about 98% and if you compare that to forecourts, there’s a massive opportunity."
McDonald’s, of course, is king of the meal deal, however Chisholm reckons forecourts don’t necessarily have to do them to emulate some of the fast-food chain’s success. "It’s all about creating adjacencies and zones and the correct merchandising, and using non-promotional point-of-sale to link categories."
And it’s not just food that drinks can be linked to. CCE recently ran a promotion with a leading national forecourt chain selling Diet Coke and Closer magazine together for £2. "It was the first time we’ve run a promotion like that and it worked really really well. We’re now looking at repeating it.
CCE is also keen to get consumers to ’up-purchase’ or spend more.
"There’s only a short interaction time with consumers in forecourts and if you can’t pull them to the soft drinks area they go straight to the till. Chillers are often situated at the back of the store but retailers need to do more to create awareness. One solution is a secondary chiller by the till."
Unfortunately one of the big issues for forecourts - as with many other stores - is availability. "We often find that retailers are stocking too much. Their range is too big and they’re not giving enough space to the best sellers," says Chisholm.
And on promotions, CCE is working to find out which ones are best for forecourts. "We’ve done a lot of ’two for a price’ activity but we’re now asking whether someone wants two bottles of drink when they are in a car," says Chisholm. On pricing he says it’s down to individual forecourts to suit both their location and competition.
Another of CCE’s brands doing well in forecourts is energy drink Relentless. Chisholm says that in one national account recently it was even outselling Coke.
Relentless has recently been boosted by the launch of a ’Juiced’ variant containing 50% juice content. The aim is to attract new consumers to the energy drinks sector and drive incremental growth.
Sarah Mitchell, performance controller at CCE, says she expects Juiced to attract consumers away from morning coffee or juice.
"The premium price point will distinguish Relentless Juiced from Relentless and will also drive value growth in the sector," she adds.
Relentless is backed by a £5m multi-media campaign including above-the-line activity, sponsorship and sampling at sports and music events.
Another fizzy drink that performs exceptionally well in forecourts is Red Bull. Mat Priestley, channel manager (leisure, workplace and travel), says the brand had a great year last year but he believes there is still sales potential in forecourts, specifically at weekends.
"We recently ran a 500-store audit in BP, Esso, Total and Shell sites across the UK, on Saturdays and Sundays. Our guys found one or more out-of-stocks (on Red Bull 250ml, 355ml or sugar free) in 225 outlets.
"Weekends are a high-volume sales time for energy drinks so retailers need to ensure they don’t run out."
In the past, Red Bull’s marketing has focused on the driving message for concentration and alertness, but Priestley says that has changed. "We are now communicating to a wider audience because anyone using a forecourt store could be a Red Bull consumer - not just the drivers. And we’re not just focusing on 18-29-year-old men any more either."
Its consumption as an ’everyday’ drink is being communicated via high-profile events such as the Red Bull Air Race and the Flugtag. "These are massive events for us, for driving awareness and trial. Last year we ran promotions to coincide with the activity and sold so much we’d virtually created another Christmas!"
Priestley advises forecourts that the Red Bull sugar-free variant is a strong performer in the sector. "In terms of space versus value it is the highest-value diet drink," he says.
"Red Bull is a massive opportunity for forecourts. If retailers make it more visible, people will buy it. And forecourts are hugely important to Red Bull as they are the place where a lot of people first try the brand."
Like CCE, Red Bull advocates the use of fast-lane chillers. Says Priestley: "We had fast-lane chillers near the tills in Shell stores last year and sales rose by 50%. We shared the chiller space with other brands so Shell had Coke, Diet Coke, Red Bull and a bottled water and it worked well."
Red Bull has now entered the cola category with the launch of Simply Cola, which the company says is the only cola which contains both the original Kola nut and the Coca leaf. The drink has no preservatives, additives, phosphoric acid, artificial colouring or flavours.
It comes in 250ml cans and Priestley says it should be merchandised alongside other colas rather than next to Red Bull.
Meanwhile Lucozade, famous for its sports and energy drinks, is entering the stimulation drinks category with the launch of Lucozade Alert. Designed to provide mental as opposed to physical stimulation, it contains caffeine to sharpen mental performance and stimulate the mind. The lemon zing-flavoured low calorie drink has been developed in conjunction with office workers to combat energy lulls at work. It comes in 250ml bottles and is backed by a £4m marketing spend including nationwide sampling, in-store promotional activity, a dedicated website and a heavyweight outdoor campaign.
And Lucozade Sport is being backed by a new heavyweight £8m advertising campaign centred on how the drinks enhance sporting performance. Ads are being screened on Sky Sports and all live sports channels until November and will be supported by outdoor, radio, press and digital advertising.
GSK is also investing £6.5m in consumer education to drive understanding of the Lucozade Sport range, and the brand will have a presence at major sporting events.
In addition extra marketing investment is being put behind Lucozade Sport with Caffeine Boost, which will be supported by press advertising across leading sports publications.
Another sports drink is about to hit the shelves as PepsiCo’s Gatorade is being rolled out across the UK.
Developed in 1965 by University of Florida physicians, Gatorade is apparently the number one best-selling sports drink in the world, with a 48% global market share. It is also said to be the most researched sports drink in the world and its blend of fluids, electrolytes and carbohydrates has been scientifically formulated to rehydrate, replenish and refuel athletes.
In response to consumers’ increasing preference for more natural products, the UK will be the launch pad for a new formulation of Gatorade, which will contain no artificial colours, flavours or sweeteners and no preservatives. Britvic will produce and distribute the drink in the UK.
Available in orange and lemon flavours it comes in single and four-pack 500ml sports cap PET bottles. The bottles have been ergonomically designed so they fit comfortably in the hand while consumers are exercising.
The launch will be supported by a £5m spend including advertising as well as a heavyweight PR campaign, focusing on educating and supporting athletes at key sporting events.
== Juicy news ==
The smoothies category is still one to watch as, according to Britvic, it showed growth of 52% through impulse outlets last year. However its total sales through impulse amount to just £17m so it has a long way to go before it catches up with the likes of still juice (£129m) and juice drinks (£209m).
Innocent is a brand that is doing particularly well in forecourts. It entered Total outlets in March 2007 and Esso last August, with both oil companies listing its four top-selling 250ml one-shots (strawberries & banana; mangoes & passionfruit; blackberries, raspberries & boysenberries; and yogurt, oats, raspberries & blueberries) and two top-selling 1ltr cartons (strawberries & banana and mango & passionfruit).
The drinks are currently listed across 230 Total and 330 Esso sites.
A spokesperson for Innocent says: "Sales are continuing to grow week on week as distribution and consumer awareness increases. And these high sales have meant that Innocent is positioned in both the soft drinks and chilled category to maximise sales."
Innocent, of course, has more competition now since Tropicana’s launch into the smoothies category.The five-strong range aims to build on Tropicana’s reputation for premium juices, introducing loyal juice consumers to smoothies, while also attracting new smoothie drinkers to the sector. Brand owner Pepsico hopes the launch will make smoothies more mainstream, replicating the success Tropicana had in widening the appeal of not-from-concentrate juice.
The premium smoothies come in five flavours: strawberry & banana; mango, passionfruit & pineapple; blackberry & blueberry; raspberry & pomegranate; and apple, pear & cranberry. They come in 250ml bottles, rrp £1.79 and 1ltr bottles, rrp £2.99. The launch is backed by a £4.5m spend including TV advertising and sampling.
But smoothies are not the only new drink from Tropicana. There is also Spirit, a carbonated soft drink made from 70% juice and 30% lightly sparkling mineral water. It comes in three flavours: orange & mango; blueberry & blackberry; and lemon & grapefruit. Rrp is £1.29 for a 400ml bottle. Its launch is backed by a £5m spend.
"Forecourts are a primary focus for Tropicana Spirit," explains Nathan King, marketing manager at PepsiCo. "And that’s because it is being targeted predominantly at the travel and high street markets.
The nature of the product with its practical bottle and resealable lid lends itself to these areas as it offers natural refreshment and a healthier alternative to traditional carbonated soft drinks for those who want instant refreshment on the go.
"Forecourt traders can capitalise on the growing consumer trend for better-for-you offerings by stocking this in their chillers. It’s hoped that Tropicana Spirit will have the same success as the 330ml on-the-go formats of Tropicana Original and Smooth which have become the top-selling juice lines in impulse."
King says Pepsico is currently working with forecourts to aid sales and merchandising of Tropicana Spirit. Activity includes strong introductory offers and bespoke merchandising and POS material.
Meanwhile the big news from juice drink Ribena is that it is entering the pure juice category with Ribena 100% Pure Juices.
The drink comes in two berry flavours: blackcurrant blend and raspberry & blackberry blend. They contain no added colours, flavours or preservatives and only the sugars that are naturally present in the fruit. They are naturally rich in antioxidants and each 250ml serving counts as one of your five-a-day.
The juices come in 250ml bottles, rrp £1.19 and 1ltr Tetra cartons, rrp £1.59.
The launch is backed by a £5m marketing investment including TV and radio advertising, as well as nationwide sampling.
== Water world ==
Water had a tough year last year. As a truly thirst-quenching soft drink, its sales are really affected by the weather - and last summer’s wet weather certainly dampened sales.
According to AC Nielsen figures (MAT to 29/12/07), the total UK bottled water category is currently worth over £610m but is declining by 5.3% year on year.
Danone Waters is by far the biggest player, with its brands accounting for almost 40% of total sales. Evian is the best-selling brand, with a 17.1% share of the category while Volvic is second with a 13.2% share.
Despite the poor figures, Steve Flanagan, grocery customer marketing controller at Danone Waters, is upbeat. He says: "Looking at last year’s figures, if we strip out the summer months of May-July, then bottled water showed growth of 1.9%, versus 2006, with plain still water showing good growth of 4.1%.
"The bottled water market has been in strong growth over the past five years, 2007 aside, but there is still significant room for growth, with the per capita consumption of bottled water in the UK still lagging significantly behind other countries - approximately half of the per capita consumption of bottled water in the US, for example."
When it comes to brand activity, Evian is to become the official bottled water of the Wimbledon Tennis Championships in a deal running over the next five years. The new partnership will see Evian provide the players, officials and spectators with water throughout the championships.
Meanwhile the Volvic Touch of Fruit range has been reinvigorated with a new label design to boost on-shelf appeal and drive trial.
Finally, Danone is continuing to support the independent retail trade in 2008. Last year it introduced a field sales force to call on 9,000 independent retailers. This year it is extending this to call on 14,000 independents.
The force’s main priority is to drive distribution of Danone Waters’ brands but it will also address space allocation problems, particularly in the summer when this can really become an issue. Flanagan says that in tests in independent stores, where water is traditionally under spaced, once the issue was addressed total soft drinks category sales grew by 8%.
=== star support ===
Volvic’s ’1L-for-10L’ activity will be backed by leading British actress and Bafta award winner, Thandie Newton. For every litre of Volvic or Volvic Touch of Fruit purchased in the UK, Volvic and its charity partner World Vision will provide 10 litres of clean, safe drinking water through their well creation programme in six countries across Africa. Their target is over six billion litres over the next three years.
Newton visited the site of an existing World Vision well in Mali, where she witnessed the difference a well can make to a community and she also met with people who will directly benefit from the Volvic 1L-for-10L programme.
A substantial marketing campaign supports the specially-branded packs of Volvic water that are in store until September 2008. Support will include a national radio campaign on stations including Kiss, Galaxy, XFM and Capital and a national print campaign including daily press and women’s consumer titles.
=== make room for functional drinks ===
Richard Abbott, co-founder and commercial director of Infuzions, says that with their space limitations, it’s easy to understand why some forecourt retailers might forego stocking functional drinks. But he warns: "Those who won’t even consider selling functional drinks as part of their offering are ignoring consumer trends and turning their backs on a big growth opportunity. And that’s because we estimate that healthy fruit-based drinks have the potential to become a £340m sector within the next couple of years."
Jacob Bruun-Jensen, co-founder and managing director of Infuzions, adds: "Two out of three consumers say they have purchased a healthy soft drink in the past year and the same number state that their purchasing habits have changed and they are now buying drinks which they believe are ’more healthy’. With the vast majority of consumers moving in this direction, this is something that needs to be reflected in the range of soft drinks that forecourts offer as very often consumers say they are finding that the only ’healthy’ alternatives on offer are either water or diet colas."
Infuzions’ Zipp drinks are two low-calorie healthy fruit-based drinks which offer an alternative to sugar-rich soft drinks and juices. Vitalize comprises natural juices with essential vitamins and minerals, which provide 75% of the recommended daily allowance; while Slenderize contains weight loss aid Zotrim.
Says Bruun-Jensen: "Both lines contain a maximum of 35 calories per bottle and offer consumers very clear propositions. Vitalize taps into the burgeoning health supplements market while Slenderize appeals to consumers who are looking for a drink which can assist as part of a weight-loss programme. In research six out of 10 consumers said they would purchase the Zipp drinks on a regular basis."
Both drinks have a rrp of £1.39 for a 500ml bottle and are available to independent retailers from Palmer & Harvey McLane.
=== GSK’s forecourt facts ===
? GSK has the second-largest manufacturer value share in multiple forecourts at 20% - worth almost £51m.
? Within total soft drinks in multiple forecourts, 83% of value share is in ’drink now’ products. GSK holds 23% of ’drink now’ sales, worth almost £50m.
? Lucozade Energy is the second biggest brand in ’drink now’ in multiple forecourts, worth £22.8m and up 7.1% in the past year.
? Lucozade is the second-biggest ’drink now’ brand in multiple forecourts, worth £38.2m.
? Stimulation is the fastest-growing ’drink now’ segment in multiple forecourts, worth £38.9m and growing at 30.2%.
? Ribena Original is the top ’drink now’ juice brand in multiple forecourts.
? Lucozade has six of the Top 12 ’drink now’ sports and energy SKUs, including the fastest growing, Lucozade Energy orange, which is up 17.2%.
? Ribena original blackcurrant is the top ’drink now’ juice SKU. Ribena holds five of the top 12 ’drink now’ juice SKUs.
? GSK is the only manufacturer to show growth (up 14.8%) in the multiple forecourt ’drink later’ market.
? When GSK works with forecourts, it drives the soft drinks category well ahead of the market. For example, it was a category partner with Shell last year. As a result the oil company showed 7% growth in total soft drink sales (Jan-Dec 2007) versus a multiple forecourt total soft drink sales decline of 2.3%.
Sources: Nielsen Scantrack multiple forecourt data to Feb 23, 2008 and AC Nielsen multiple forecourt MAT sales to Dec 29, 2007