What a year of ups and downs 2018 was for the soft drinks category. On the downside we had the introduction of the soft drinks tax as well as the shortage of carbon dioxide, but on the upside there was the England team’s bettter-than-expected performance in the World Cup and a spectacular summer with record temperatures. In fact, 2018 was the second-sunniest year on record. And when the sun shines and the temperatures rise, consumers reach for refreshing soft drinks. Indeed according to IRI data, for every one degree increase in the temperature, soft drinks sales increase by 1.6%. And Nielsen data has revealed that soft drinks sales grew by between 6% and 8% during the warm weather last summer.
According to Britvic’s Soft Drinks Review 2018, sales of soft drinks through the convenience and impulse channel last year rose by 8% to £2.2bn. The channel outperformed the overall market, which was up 6.1% to £16.3bn. And according to IRI data (GB petrol multiples versus GB convenience), soft drinks within forecourts are growing at 10%, faster than the convenience channel. Drink-now products are much more important within a forecourt than the wider convenience market, with 87% of soft drinks value and 80% of soft drinks volume coming from the chiller. In wider convenience this is just 71% of value and 53% of volume. Drink-now growth in forecourts is being driven by three categories: energy, flavoured carbonates and colas.
With regards to the soft drinks tax, Nielsen found that only 8.4% of the total soft drinks market was liable for the tax when it came in, in April last year. And although there has been a big switch in consumer habits with many choosing low or no sugar rather than full sugar drinks, 25% of value growth in the soft drinks market came from the levy.
Rachel Phillips, out-of-home commercial director at Britvic, says: "The levy has left an indelible imprint on the soft drinks category. The cola category has seen a significant volume shift from regular to low- and no-sugar options and products such as Pepsi Max have now gained significant share from full-sugar products.
"Post-levy we’ve also seen the tide turn for the dilutes category as the trend towards low/no sugar products continues to grow. This has primarily been driven by Robinsons’ exceptional performance and the launch of its premium Robinsons Creations."
Despite the solid growth figures across the market, Britvic believes there is room for even more growth. "Based on Britvic forecasts, extrapolated from IRI data over the past two years, we’ve identified a £100m sales opportunity for convenience and impulse retailers this year," explains Phillips. "This translates into a chance for each and every single retailer to put almost £2,200 in their tills by maximising the sales potential of the soft drinks category."
Britvic has created a simple action plan that it will be sharing on its Twitter feed and through trade press to help retailers realise the potential to generate additional profit. "Our simple statement is that, if you have an hour a week spare in your store, spend it on soft drinks. The time investment will translate into a revenue generating opportunity," continued Phillips. "We’ll be using Twitter and retail press to talk about the balance between core, top sellers and new products, how retailers can make the most of events and a handy guide to stocking the right range for the type of shoppers who visit your store regularly."
The flavoured cola segment is currently worth almost £190m and is growing by 25% (Nielsen). Simon Harrison, vice president, commercial development at Coca-Cola European Partners GB, says: "A staggering 7.4 million households in GB buy flavoured colas. This equates to an increase of 1.7million buyers over the last year, adding 30% growth to flavoured colas in 2018 (Kantar), demonstrating the clear opportunity for more flavour variety within this well-established soft drink sector."
The latest additions to Coke’s flavoured line up are Coca-Cola Zero Sugar Raspberry and Diet Coke Twisted Strawberry. Their launch is backed by a £7m marketing campaign including sampling activity. The introduction of the new flavours follows the success of Coca-Cola Zero Sugar Peach, Diet Coke Exotic Mango and Diet Coke Feisty Cherry, which are now worth more than £20m since launch in March last year, with almost 60% of sales incremental to the cola segment (Kantar).
Raspberry is obviously the flavour of the moment as over at Britvic they have introduced Pepsi Max Raspberry, which is available alongside the already popular Cherry and Ginger variants. According to Nielsen data, the Cherry and Ginger Max flavours have amassed sales of £80.5m since their launch.
Trystan Farnworth, commercial director, convenience and impulse at Britvic, says: "The latest addition of Raspberry to the Pepsi Max range is incredibly exciting for the brand. Our Ginger and Cherry variants have already proved incredibly popular since their launch, with Pepsi Max Cherry being the number one flavoured cola."
Health is a key driver in consumer choice but ’healthier’ means different things to different people. For some people less sugar is deemed as healthy while for others, artificial sweeteners are a definite ’no no’.
Amy Burgess, senior trade communications manager at Coca-Cola European Partners (CCEP), says: "The health and wellness trend has exploded in recent years, with consumers becoming increasingly more in tune with their wellbeing. This is affecting the way they shop, with 40% of shoppers rating a range of health products as important."
She says sugar content has become a major factor in shoppers’ choices and, as a result, CCEP has seen brands such as Coca-Cola Zero Sugar growing significantly. Currently up 46.8% in value, Coca-Cola Zero Sugar is the fastest-growing major cola brand in GB in both volume and value (Nielsen)."
According to Britvic’s Soft Drinks Review, sales of the healthiest drink of all water are rising. Its report reveals that plain water sales are up 11.4% in the convenience channel, reaching £261m and water-plus sales are up 4.2% to reach £97m.
Mintel data reveals that 53% of consumers view sparkling flavoured water as a good alternative to traditional carbonated soft drinks. Aqua Libra is well placed to cash in on this trend as it is described as the "perfect choice for people who prioritise health but don’t want to compromise on a great taste".
Aqua Libra, with no sugar, no sweeteners and no calories comes in three flavours: Raspberry & Apple; Grapefruit & Pineapple; and Cucumber, Mint & Lime.
"Aqua Libra appeals to consumers’ changing tastes and habits and will help retailers to drive growth in the water plus segment," says Britvic’s Phillips.
One area of the soft drinks market that has exploded over the past year or so is adult soft drinks as a result of adults either cutting down on their alcohol intake or cutting it out altogether.
According to Nielsen data, Shloer is currently the number-one adult soft drink in the take-home sector and its sales look set to grow thanks to the launch of two new ranges: Shloer Spritzed light, dry, aperitif alternatives; and Shloer Pressed a flavoured cider alternative. The new drinks have been created to build on the brand’s credibility as a respected wine and prosecco substitute and replicate its ’alternative’ role for other key alcohol occasions.
Brand owner SHS Drinks says this direct mirroring of alcohol moments and providing soft drink alternatives for a variety of occasions is a unique approach that no other brand is offering.
Shloer Spritzed is a light, dry, sparkling soft drink developed specifically as an alternative to the likes of gin and tonic and flavoured aperitifs. The three flavours Bitter Orange, Grapefruit & Mint and Bitter Lemon & Lime have a bitter mouth-feel and are ideal for consumers who like longer, more grown-up drinks.
They come in 700ml glass bottles, with an rrp of £2.49.
Shloer Pressed draws its inspiration from flavoured ciders. The soft drink is a sparkling fruit blend that’s been pressed "to perfection". There are three variants, each of which takes its cues from the best-performing fruit-flavoured ciders: Strawberry & Lime; Rhubarb & Apple; and Mixed Berries. All three come in 330ml cans (rrp £1) and four x 330ml multipacks (rrp £3.50).
The launches also represent a ’first’ for Shloer as the drinks don’t have grape juice as their primary base.
Shloer currently accounts for all three top-selling adult soft drink sharing bottles in the impulse sector and four of the top five single-bottle SKUs in the total take-home adult soft drinks category (Nielsen).
Nick White, head of soft drinks at SHS Drinks, says: "Our strategic review of Shloer and the expanded role that the brand can play going forwards resulted in insight-led NPD that is all about new audiences, exploring trends, leveraging the brand, and leading the adult soft drinks category from the front. Our intention is to make Shloer the drink of choice for those who want to have fun and join in, even when they are not drinking alcohol."
Ready for summer
When it comes to getting ready for this summer’s sales, Matt Gouldsmith, channel director, wholesale at Lucozade Ribena Suntory, says: "Forecourt retailers must ensure their chillers are ready for the busy summer season. The opportunity for additional sales during the summer is clear, with shoppers out more during warmer weather and looking for their favourite soft drinks for on the go and for barbecues. In fact, in 2018 soft drink sales in independent convenience stores were up to 84% higher in July than in January (IRI). This translates into a substantial sales opportunity for independent retailers throughout the warmer months."
Gouldsmith continues: "Retailers should focus on layout, review the range regularly and stock up frequently.
"Empty chillers in the summer could cause shoppers to go elsewhere, so keep the stockroom full to allow quick re-stocking during busy periods.
"The layout in the chiller is more important than ever in the summer, when shoppers want to find what they’re looking for quickly and easily.
"SKUs should be brand-blocked with a minimum of two facings per flavour, and more for a best seller like Lucozade Energy, Lucozade Sport or Ribena."
Gouldsmith adds that LRS will be investing heavily in consumer marketing campaigns for its drinks this summer to ensure shoppers will be looking for Lucozade Energy, Lucozade Sport and Ribena while they’re out and about. There is a £5m summer campaign behind Lucozade Sport as well as a £6.2m campaign to support Ribena.
Amy Burgess, senior trade communications manager at CCEP, agrees that it’s worth keeping stocks high to meet increasing demand for soft drinks, with as wide a choice of products as possible, considering a range of variants and pack formats to provide options that appeal to every consumer taste and occasion.
"Creating eye-catching displays can help increase sales, especially impulse buys. Additionally, cross- merchandising soft drinks with barbecue items and food, and offering ’meal deal’ type offers is a great sales opportunity for retailers, providing consumers with value for money.
"Displays could see best-selling soft drink brands like Coca-Cola, Schweppes and glacéau smartwater stocked alongside products like burgers and buns, condiments and even disposable barbecues, enabling consumers to stock up on everything they need in one place.
"Highlighting the display prominently in the shop can play a role in encouraging consumers to plan a barbecue, leading to incremental growth.
"Retailers should also look ahead and see which notable sport, TV moments or events are coming up, and it may be worth putting together displays themed around these events to leverage the interest that can be generated ahead of these occasions."
Whatever the weather this summer, it seems soft drinks represent a good sales opportunity for retailers who are on the ball.
Unrooted, described as the first premium, healthy energy drink made with Baobabis, is now available from Marigold Wholesalers. Already stocked in Selfridges, it comes in Baobab & Mango, Baobab & Pomegranate and Baobab & Ginger flavours, in 250ml bottles, rrp £3.50. Baobob is full of prebiotic fibre and vitamin C.
San Benedetto is a premium Italian soft drink that’s made using the first squeeze of the fruit, and contains less than 70 calories per can. Sales are currently growing by 84% in forecourts according to IRI data.
A new £6.2m marketing campaign supports Ribena, highlighting the brand’s ’wellness’ credentials and its heritage as the ’master crafter’ of blackcurrants. As part of the campaign, 600,000 bottles of new Ribena Frusion will be given away.
Red Bull is extending its multipack offering with the launch of a new 355ml four pack. According to IRI data, multipacks are worth £167m, which equates to 12.5% of the overall sports and energy category.
Rubicon Spring, the UK’s number one sparkling flavoured water (IRI data), is currently growing by 93% in forecourts, and therefore represents a massive opportunity for retailers.
Try Us 4 Slush for big profits
If you’ve not got a slush machine perhaps now is the time to consider it as according to Us 4 Slush, there’s 85% profit in every cup.
Us 4 Slush is a family business and the owner, David Fish, has been involved in the industry since 1988. "When buying from Us 4 Slush the retailer is buying direct from the factory, cutting out any middle men," he says.
The company is currently offering readers of Forecourt Trader a special deal of a two-bowl machine for just £995 plus VAT, a price which includes retail stock worth £2,000. The machine usually costs £1,395 so it’s a great deal, and retailers just need to use promotional code ’Forecourt Trader’ when making their purchase.
"The two bowl is our best-selling machine, however obviously the three bowl has a bigger visual impact that helps to increase impulse sales," says Fish.
The machine is a counter-top model with a footprint of only 50 x 50cm. It plugs into a standard UK socket and no plumbing is needed.
He says some retailers allow self-serve, which works well, but there is obviously more control over mess and waste when the retailer serves.
The machines should be cleaned once a week and there’s a video on the Us 4 Slush website showing exactly how to do this.
The syrup is ambient and has a two-year shelf life. Top flavours are Blue Raspberry and Strawberry, and four sizes of cup are available.
"Slush is enjoyed by people of all ages and not just during the summer," says Fish. "The retailers that keep their machines running during the winter still sell a surprising amount of drinks."
Rio revels in growth
Anna Corbett, marketing manager for Rio at Hall & Woodhouse, says the brand had a fantastic summer last year. "Volume growth was 10 times ahead of fruit carbonates and six times ahead of total soft drinks. In value terms, Rio grew by 53% year-on-year (IRI data)."
She says Rio PET 500ml bottle is the ideal solution for forecourts, for easy consumption on the go, but that cans are still essential to stock too. "We recommend maximising facings and stock-holding of fruit carbonates when the hot weather comes as many consumers switch out of colas to more refreshing fruit-based alternatives. Where possible locate secondary displays away from the chiller in key impulse locations, to maximise opportunities to engage consumers with fruit carbonates over the summer."
Corbett says the key is to offer choice: "Many brands reformulated as a result of the sugar tax, are leaving consumers disappointed and/or confused by reformulations of old favourites. Rio Tropical has stayed true to its original recipe, remaining all natural with no added artificial sweeteners."
Woodman Service Station
Woodman Service Station, Leeds in West Yorkshire, was the Best Soft Drinks Outlet winner at the Forecourt Trader of the Year Awards 2018.
Soft drinks account for a major percentage of the site’s sales, with between 400-500 units sold every day. They occupy a full wall of glass-door chillers, a chill island and are also merchandised in ambient stacks around the store to maximise sales opportunities. Multipacks and products on promotion are also sited near the door to provide further up-selling opportunities and there’s a Red Bull chiller in a prominent position. A separate chiller houses premium lines and American drinks which are very competitively priced against other local stockists including nine different variants of Fanta and Dr. Pepper, of which 30 cases per week are sold.
Manager Ziheed Mohammed says: "The soft drinks category is merchandised using planograms and regular merchandising support from Coca-Cola, who ensure that soft drinks are easy and convenient to shop within the store.
"Stock is rotated regularly and always checked for best before dates, and products are regularly restocked as empty shelves could result in lost sales."
F’real is shaking up the market
When it came to milkshakes, global frozen beverage manufacturer Rich Products started with one simple question: "Surely there’s got to be an easier way to make them?" Its answer was its blend-in-cup technology, which provides retail and foodservice operators with a quick, easy and affordable solution to deliver milkshakes with no fuss, no mess and no waste. It’s a concept that’s worked, as the F’real products are now available in over 21,000 retail locations across the globe.
The machines have an easy-to-use touchscreen where consumers choose their flavour, peel off the foil seal, then blend their milkshake to their exact preference. They can select from three thicknesses. The blender blends one shake at a time and the whole process takes just 60 seconds.
The pre-measured thick ice cream milkshakes are all made using authentic, high- quality ingredients such as real ice-cream and fresh fruit and can be either self-blended by the consumer or one-touch blended by staff.
The machines are available free on loan and Rich Products can supply a range of freezers to suit all customer needs.
The company says the pre-measured concept reduces time, waste and mess the blender self-sanitises after every blend, so a simple wipe down each day while re-stocking is all that’s needed. The blenders also have their own self-diagnostic reporting system, which will alert Rich Products’ support team on the rare occasions any issues are reported.
There is one size of drink 12oz and no rrp; retailers set their own.
Research company Nielsen predicts that the ready-to-drink (RTD) coffee sector is set to more than double over the next 10 years. In response to this sales opportunity Monster Energy recently unveiled its first range of RTD coffee drinks.
Available in a premium ’touch ink’ black 250ml can, Espresso Monster is a blend of real brewed coffee and Monster energy that is designed to appeal to coffee lovers and energy drink fans alike.
There are two varieties Espresso & Milk and Vanilla Espresso. Amy Burgess, senior trade communications manager at brand owner Coca-Cola European Partners (CCEP), says the product is unique as it is the only cold coffee drink on the market with caffeine content that can rival that of a hot coffee.
"This will enable us to attract new drinkers to both the energy and RTD coffee sectors, while delighting Monster’s core fan base with our continued investment into exciting and great-tasting innovation," she says.
The Monster Energy range is now worth £200m in GB.