As one of the fastest-growing categories in the FMCG market, soft drinks in the forecourt sector showed double-digit growth in 2003 – helping market sales break the £5bn barrier.

Now worth £242m, the soft drinks category in forecourts accounts for five per cent of soft drinks sales, and grew by 11 per cent last year, in line with the total market, according to Britvic’s Soft Drinks Category Report 2004.

One reason for such phenomenal growth last year was the weather. But a greater emphasis on product innovation has also encouraged a better-than-expected category performance. In fact, £162m was generated through innovation with 66 per cent of this from extensions of established brands such as Vanilla Coke and Fanta Berry.

Sue Garfitt, Britvic’s director of category planning, says consumer trends that emerged in previous years have also become more influential. “Heightened health awareness, the willingness to pay a premium for a better product and the urge to indulge themselves are all now key motivators for consumers,” she says. “Consumers aren’t radically experimental – they like the reassurance of big brands. They are more likely to stick with things they know and trust.”

Functional drinks are continuing to grow in forecourts – by a phenomenal 24 per cent in volume and 19 per cent in value last year, making them now worth £55m. Reflecting the high growth rate is increased brand support in the functional drinks market. Red Bull, for example, had a very active year, pushing Diet Coke to third position in terms of investment.

And according to the UK Energy and Sports Drinks report for winter 2003/2004 by Zenith International and commissioned by Red Bull, the total functional drinks market is on course for £1bn sales by 2006. Red Bull, Lucozade Energy and Lucozade Sport are the three dominant brands within three segments – functional energy, refreshment energy and sports.

Red Bull is overall leader with £430m sales last year and driving 85 per cent of the functional energy drinks segment. Lucozade Energy comes second with a value of £220m and more than 95 per cent of the refreshment energy drinks segment. And Lucozade Sport leads the sports drinks segment with £85m sales and is growing at a rate of 20.6 per cent year on year.

Coca-Cola Enterprises’ (CCE) functional drinks brand Powerade also had a good year in 2003 with a 38 per cent value growth and is now taking an 18 per cent share of the sports drink sector (Source: AC Neilson). This year Powerade hopes to become synonymous with sport following sponsorship deals – worth £2m – with Euro 2004, the Athens 2004 Olympic Games and Wimbledon Tennis Championships. The brand will also be supported by a £4m media spend, and a series of on-pack promotions, instant wins, point of sale material and a dedicated website.

The functional drinks market has also had its fair share of innovation. In January last year Red Bull launched a sugar-free variant to address the needs of health conscious consumers, and in May 2003, Lucozade Sport Hydro Active was launched with a £5m advertising campaign to support it.


While functional drinks are showing excellent growth, mineral water is growing at an even quicker rate, largely driven by the sports cap. Up by 24 per cent in value, the waters market is now worth £38m through forecourts.

The water market broke the two billion litres barrier in 2002, according to the Well Well Well UK Bottled Water Report 2004. The market has more than doubled in the past five years and almost trebled in the past nine years. And the growth in 2003 was almost as big as the entire market in 1989.

Forecourts are coming top of the class, too. Last year the channel increased volume by 19 per cent – four times faster than in 2002 – and value by 17 per cent. The Well Well Well report praises forecourts for the way they display water in “brightly lit, logically presented chilled cabinets”.

Jason Williams, marketing director for Well Well Well, says one of the issues addressed by forecourt retailers in 2003 was pricing. Because petrol stations have become more competitive with prices, shoppers have been deterred from stocking up on multi-packs at the supermarket.

“The slowdown of growth in forecourts last year was down to their premium pricing,” says Williams. “But over the past year they have got wise to that and dropped prices bringing about strong growth.” Average price per litre in forecourts is now 83p – two per cent lower than in 2002 – but still compared to 33p in multiples.

Anthony Habert, commercial manager for the Strathmore brand, explains why bottled water is growing: “As lifestyles have changed, consumers have developed a deeper understanding of the need to drink more fluid to aid health and concentration levels,” he says. “Consumers are seeking alternatives to soft drinks that are high in sugar and other additives so bottled waters are proving extremely popular.”

The three French water brands – Volvic, Evian and Vittel – have a joint share of 81 per cent in the forecourt sector so these brands are definite must-stocks.

An area where forecourts have not performed so well is with children’s packs, which have started to make their mark in the multiple grocery sector. Jason Williams at Well Well Well says: “Children-specific packs have not taken off in forecourts but it would be silly for them not to follow the multiples – they will be losing out by not having it in their range. Sports cap has been a fantastic innovation for bringing in younger audiences.”

Anthony Habert at Strathmore also says that margins are becoming more difficult to sustain in the growing water market. “A key issue for this category is the erosion of margin, as all retailers push to offer better value to consumers,” he says. “This makes it harder for producers to invest in their brands and the category as a whole – something that is essential for the long-term health of the market and both producers and retailers.”

When it comes to water, CCE is not ruling out a reassessment of its failed purified water brand Dasani. Norman Brodie, marketing director of CCE, says: “Purified water is a small sector in the UK – mainly just own label and office water coolers – but it’s a big opportunity in Great Britain. We are now assessing our position in the context of our own water portfolio for the future.”


Cola is still the largest soft drink sub-category, worth £69m in forecourts, according to Britvic’s soft drinks category report. Last year it performed ahead of the total market, growing by 14 per cent in value and 13 per cent in volume.

The Coca-Cola range grew by 12.7 per cent last year, and CCE has some high profile promotional activity planned for its core carbonates ranges this year.

Celebrating its 21st birthday this year, Diet Coke, which grew by £58m in 2003, last month launched Film Fest, a promotion that will see drinkers vote for Britain’s favourite film. On more than 150 million Diet Coke packs, consumers are invited to vote for their favourite film via text or online at

As well as boosting the chances for their favourite film, Diet Coke drinkers will also have the opportunity to win one of 50 pairs of tickets a day to the exclusive screening of the winning films in September. The promotion is being backed by a £1.5m campaign including TV advertising. Themed in-store support will use point of sale highlighting classic movies such as Saturday Night Fever.

Coca-Cola has also kicked off its biggest ever football promotion with the signing of four of the world’s best players – Wayne Rooney, Luis Figo, Thierry Henry and Ruud Van Nistelrooy. Throughout May and June, an on-pack promotion will see one million Coca-Cola branded Euro 2004 match-standard footballs given away.

The promotion features across 200 million packs of Coca-Cola, Coca-Cola Vanilla, and Coca-Cola Cherry, and is being supported by £2.1m marketing package including a six-week TV campaign, which breaks this month. Euro 2004 point of sale is also available. Other promotional activity from Coca-Cola include, a legal downloadable music website supported by a £1.4m media campaign.

Coca-Cola’s biggest launch in 20 years was the introduction of Vanilla Coke in April last year. Within one year, Vanilla Coke and Diet Coke Vanilla became a £60m brand. CCE is continuing its support of Vanilla this year with the sponsorship of Sky Movies.

Meanwhile, Pepsi, which grew by 11 per cent in 2003, will also be supporting football in a big way this year with a major on-pack promotion and TV campaign starring David Beckham.


Britvic’s category report reveals that the sectors in decline within the forecourt sector were fruit fizz and dairy, which both showed three per cent value losses, while adult drinks – brands such as Appletiser, Amé and Schloer – suffered a 36 per cent value loss.

While fruit fizz showed decline, there were some individual success stories within the market. Fanta, for example, was responsible for 59 per cent of category growth within the flavoured carbonates sector (Source: AC Nielsen). And this year, CCE is supporting the brand with a TV advertising campaign running until the end of July, and an on-pack promotion due to be launched

later in the year. The campaign will support all Fanta flavours including the just-launched Apple Splash with low sugar.

Later this year, CCE will also introduce a new TV campaign for Sprite, as well as a major promotion for Dr Pepper, Sprite and Lilt kicking off in July.


AC Nielsen data reveals that kids soft drinks account for 10 per cent of total soft drink sales. And, according to Hall & Woodhouse, manufacturer of the Popzone range of children’s drinks, 16 million consumers buy kid’s soft drinks an average of 8.9 times per year. And while children under 10 years old make up 16 per cent of the population, they consume 23 per cent of all soft drinks, equalling £2.2bn at rrp (Source: National Drinks Survey).

But, Graham Jacobs, marketing manager at Hall & Woodhouse, says that forecourts could be missing out on valuable sales. “Forecourts don’t pay much attention to kids drinks but they should because cars are full of them,” says Jacobs. “For some reason retailers don’t seem to think of kids in that environment.”

The company has developed a blueprint for smaller retailers in collaboration with Spar wholesaler Blakemore’s. “Those retailers that have the space and the disciplines, particularly if affiliated with a fascia group, could have the Popzone concept as seen in the multiples,” says Jacobs.”

Ribena is the number one kid’s soft drink brand, with Capri Sun second, Fruit Shoot third, and the Popzone range fourth. But while sales are growing, manufacturers are under pressure to reduce the sugar content of their products.

As such, Popzone has brought out products that are low in sugar such as Panda Fruiti Pops with 10 per cent fruit juice in two flavours – grape & apple, and fruit salad – and the Panda Still range of fruit flavoured drinks made from natural still spring water.


Overall consumption of juice and juice drinks is on the rise, with consumers trading up to chilled juice and juice drinks in the search of a healthier soft drink.

Colin Davis, marketing manager for Gerber Foods Soft Drinks, the UK agents for Ocean Spray, says: “The general trend towards healthier eating has influenced consumers’ shopping behaviour within soft drinks. The overall increase in consumption of juices, juice drinks, and more recently smoothies, demonstrates that consumers are leaning towards healthier beverages.”

Recent developments within the juice sector include Ocean Spray’s White Cranberry variant, which is sweeter and smoother than its red counterpart. The company has also just brought White Cranberry & Grape juice to the impulse sector with a 200ml one-shot carton. The 200ml has a rrp of £1.19 for a pack of three cartons, and will benefit from a £4m marketing spend, which includes TV advertising, a sampling campaign and trade and consumer promotions.

Meanwhile, according to Princes Soft Drinks, the juice brands it expects to do well on the forecourt this year include Jucee, which grew by seven per cent in the independent retail sector last year; Jucee Fruit Explosion, the no-added sugar juice drink available in 250ml sports cap; and Princes Real fruit juice.