Last year, for the first time in what seemed like years, we actually had a hot summer, which helped boost soft drinks sales no end.
Indeed, according to Nielsen, at the height of the heatwave (week-ending July 13) the grocery mults sold an extra seven Olympic-size swimming pools’ worth of bottled water, worth an extra £15m. And despite specific data, you can assume the convenience sector saw a similar Olympic-size leap in sales.
According to the Britvic Soft Drinks Review 2014, soft drinks sales reached £10.3bn last year, with £7.5bn of those sales through retail outlets. The grocery mults had the lion’s share at £5.6bn, but that still left convenience outlets with a respectable £1.9bn-worth plus it was the convenience sector that experienced strongest value growth up 5% compared to the grocery mults’ 3%.
As for individual sub-categories, energy drinks maintained their lead over cola in impulse outlets worth £491m versus cola’s £453m. Next came fruit carbs at £180m, followed by juice drinks at £166m, then plain water at £157m.
As ever in the run-up to the big soft drinks’ sales season, there’s plenty of activity with launches and promotions, as well as suppliers proffering advice.
Energy buzz
Lucozade Sport is currently running an on-pack offer as part of the brand’s new Fuel to Rule campaign. Featuring top-flight footballer Steven Gerrard (pictured above), it gives consumers the chance to win one of 60 pairs of football boots designed by the player.
With all eyes on football as the World Cup approaches, the promotion is bound to be popular. It is currently running across the complete Lucozade Sport range, but is being advertised specifically on the orange & raspberry singles and four-packs.
Meanwhile, both Lucozade Energy and Sport are available in 79p price-marked packs (PMPs).
Following the success of PMPs last year which delivered a strong double-digit uplift in sales the new 79p price point will run across even more SKUs. Nielsen data shows that PMPs have helped to drive value within the total soft drinks category compared to straight pack formats. Within the sports and energy category in particular, PMPs have driven 36.4% value growth compared to a standard straight pack, as shoppers are on the lookout for good-value products.
The 79p PMP initiative will be supported by point -of-sale through to June. The price flash is on Lucozade Energy 380ml original, orange, pink lemonade, Caribbean crush, melonade, tropical, strawberry and the Brazilian; as well as on Lucozade Sport 500mls (orange, raspberry, Caribbean burst and Brazilian guava).
Water works
Scott Dickson, senior brand manager at the Highland Spring Group, says many retailers stock too many water brands and products. "We find that keeping your shelves clutter-free and stocking key performers and recognised brands is a far better option, and that by reducing your range, sales will react in a positive manner. As summer approaches, bottled water sales increase so it’s important to allocate sufficient space to optimise sales at this key period for the category.
"It is vital to stock leading formats such as our Highland Spring 750ml sportscap, the fastest-growing ’drink now’ plain water format (IRI, data).
"Retailers need to understand how consumers shop. Still and sparkling water should be separated and shelves should be stacked vertically instead of in long horizontal rows. And try to avoid grouping products by brand or format. We suggest merchandising still and sparkling water separately thereby taking advantage of drinking occasions such as on-the-go, for barbecues or to drink later at home. For additional help we have created an online site called mysoftdrinksguide.com offering impartial advice on ranging your soft drinks feature."
Meanwhile, Ammad Durrani, category development manager at Nestlé Waters, says sparkling water is proving popular in convenience stores, so recommends retailers stock Perrier cans.
To drive availability, visibility and impulse purchases of water in general, he advises positioning secondary display stands or dumpbins containing Buxton natural mineral water by the newspapers and at the front of the store.
And he says more consumers are buying multipacks at their local store more regularly; Buxton four x 50cl sports caps have been produced in response to this.
"These formats fit well with the way that consumers are now shopping in c-stores more regularly, doing more smaller top-up shops rather than shopping once a week. These multipacks offer good value for money and also the opportunity for the retailer to trade shoppers up from single bottles.
Flavoursome
New flavours drive sales across the entire soft drinks market and no more so than in fruit carbonates.
Indeed AG Barr’s KA karnival krush was such a success as a limited edition last summer, that it’s now been added as a permanent line. According to the firm’s sales data, consumers bought 1.2 million packs of the citrus-flavoured carbonate in just 10 weeks. The new permanent flavour is available in price-marked 330ml cans (49p), 500ml PETs (89p) and 2ltr bottles (£1.69).
AG Barr’s head of marketing, Adrian Troy, says: "KA consumers react really positively to product and flavour innovation and 45% of KA sales over the past two years have come from NPD, new flavours and special packs."
According to Nielsen, KA is the UK’s number one Caribbean brand, worth over £30m.
Meanwhile, Cawston Press believes its new range of sparkling drinks could add £10m to the carbonates market. It has launched rhubarb and cloudy apple flavoured sparkling drinks in 330ml cans, with a recommended retail price of 99p. WH Smith is one of the companies already stocking them.
The drinks are made from juice that’s come from fruit that’s picked at prime ripeness, then pressed within 48 hours. They contain no concentrates, artificial sweeteners, preservatives or colourings.
Compact format
Squash has undergone a radical makeover which has seen it venture out from the kitchen into on-the-move scenarios.
First to market was brand leader Robinsons with the aptly named Squash’d.
Manufacturer Britvic found that despite over half of all UK households having a bottle of squash in the cupboard and water being the biggest out-of-home soft drink category, squash rarely leaves the kitchen. It then conducted extensive research into the different needs of squash drinkers, to identify the barriers preventing the category from tapping into on-the-go consumption occasions. Those barriers were size and portability of current formats, together with the fact that squash is largely seen as a kids’ product.
Robinsons Squash’d overcomes such obstacles. The super-concentrated squash is packaged in 66ml bottles, measuring just 7cm tall and containing 20 servings. Consumers simply squirt Squash’d into a bottle or glass of water to get a fruity drink. There are three flavours: apple & blackcurrant, orange & peach and summer fruits; all with a recommended retail price of £2.49.
Britvic has high hopes for the product; it expects Squash’d to drive the development of a new incremental pocket squash segment, which could be worth £200m over the next five years. The firm recommends that the product is positioned in the squash fixture and also dual-sited at the till point to capitalise on the impulse, on-the-go purchasing occasion
Jonathan Gatward, GB marketing director at Britvic, comments: "As the signpost for the squash category, Robinsons is best placed to spearhead this emerging sub-category and with a strong track record of delivering growth in other markets, we’re confident that on-the-go squash will bring excitement and recruit shoppers into the UK squash category."
Squash’d is currently supported by TV advertising targeting 25-35 year-olds. The ad is part of a £4.8m integrated marketing campaign which includes, digital, PR and point of sale designed to raise awareness and educate consumers on the variety of usage occasions.
Meanwhile, Vimto has what it calls a ’water enhancer’, available in no added sugar original, cherry and strawberry flavours. It has been available in Tesco since January with a full retail roll out planned this year.
And there’s also Oasis Mighty Drops, which is being made available to selected retailers from this month, with a wider roll out in 2015. The 56ml packs of super concentrated squash come in mixed berry, mango and raspberry lemonade flavours.
Something different
If you’re looking for new lines to liven up your soft drinks offer there are plenty to choose from.
For a refreshing, functional beverage, there’s Grace Aloe aloe vera drink in original, strawberry and mango varieties.
"Grace Aloe is full of the natural benefits of the aloe vera plant," explains Enco Products brand manager, Giuseppe Vullo. "The aloe vera plant is known for its health properties, which are thought to encourage healthy digestion and support the immune system."
He adds that the drink contains vitamin C and is rich in antioxidants and he says attention in the mainstream media has created awareness of aloe vera drinks, boosting demand.
It’s also boosted launches as Poizon Drinks has just introduced what it says is the world’s first 100% natural ’mocktail’ energy drink which includes aloe vera as well as guarana, ginseng, milk thistle, gingko, goji berry and white tea.
Called Poizon, it is described as a "tantalising blend of real fruit juices reinforced with energy-producing natural extracts".
Then there’s the ZEO low-calorie drink which is available in 430 WH Smith outlets after a successful trial in the chain’s 190 travel stores.
Developed over several years, ZEO comes in three fruity variants: peach & grapefruit burst, citrus crush and lime zest. Each is said to offer ’complex, subtle flavours’ as well as a ’tingle’ effect, which was devised to re-create the sensation and feel of vodka but without the alcohol.
Brand owner Freedrinks’ managing director, Martin Hall, says: "We are delighted that WH Smith has recognised the potential behind our brand. There is a huge opportunity in the soft drinks category which has been devoid of innovation in recent years, and ZEO is tapping into that potential with a drink that is low calorie and does not contain artificial ingredients, without compromising on flavour."
Meanwhile, Future Drinks says it has launched Koji in response to growing demand for healthier adult-style refreshments. Made with carbonated spring water infused with a complex extract of natural fruits, it is completely natural, with no artificial sweeteners and only contains 49 calories a bottle.
Tim Chater, co-founder of Future Drinks, comments: "We wanted to create a great tasting, clean and healthy drink. We have developed this production method ourselves, taking inspiration from a unique Japanese infusion process. It produces a soft drink, flawless in our view, as it is all natural, very low in sugar and doesn’t compromise on taste. The result is a sophisticated drink that is a more interesting alternative to cordials and water, with less sugar than most juices and it doesn’t contain stevia,"
It comes in three variants: mandarin & cranberry, lemon & ginger and elderflower & lime; in 330ml glass bottles with a recommended retail price of £1.50-£2.
Merchandising success
It’s all well and good having the right lines but are you displaying them in the best way to maximise sales?
Coca-Cola Enterprises (CCE) now offers retailers BevTrac a spring-loaded shelf management system that is designed to drive on-the-go soft drink sales.
The system is said to offer a number of benefits to retailers including:
Improving ease of shop and availability for shoppers by helping product lanes always ’look full’ thanks to its spring-loaded ’pusher’ action.
Signposting brands to the shopper, making products easier for them to see, select and purchase.
Increasing product standout by using sector and brand-specific point of sale and labelling to improve merchandising and visibility.
Making it easier to face up and re-stock by using spring-loaded lanes to keep products in order.
Reducing out-of-stocks by featuring ’call to action’ point of sale that prompts retailers to fill up when a lane is empty.
CCE’s sales director for the cold channel, Wes McKenna, says: "The equipment has been designed with the retailer’s needs in mind not only by helping them to maintain stock levels and visibility of their soft drinks range, but it will also help to drive extra soft drinks sales. When installed in other markets, BevTrac has demonstrated an 8.5% volume uplift in store."
Steve Vaughn, from Handbridge Services in Chester had BevTrac installed a year ago. He says: "BevTrac has made a big difference to our soft drinks fixture, which is a popular area of our store.
"The system makes shelves look full at all times which encourages customers to make a purchase with us and has led to a rise in soft drink sales.
"It also helps staff to manage stock levels more efficiently, which has reduced out-of-stocks as the spring-loaded lanes are easy to re-stock.
"Since having BevTrac installed, shelves look tidier and shoppers have found it easier to navigate the fixture and select the products they want.
"We saw an instant uplift in sales from when it was installed, so we would definitely recommend it to other retailers."
Any retailers interested in getting BevTrac in their store can call 01733 284988. They will be visited by a CCE representative to assess the viability of installing the system in their shop.
Top tips for water growth
50cl, 75cl and 1ltr bottles are all must-stocks but where space allows, 1.5ltr bottles should be stocked too
A branded sparkling option should be available in the chiller
Display ambient multipacks such as Buxton four x 50cl in addition to the core chiller range
Make the layout easy for the shopper to navigate quickly
Water should be clearly segmented: plain, sparkling and flavoured
Dumpbins and secondary displays can drive visibility and ensure availability
Position secondary display units and stands next to newspapers and confectionery to drive impulse sales
Display stands will ensure availability during the summer
Water should be given 20% of total space in front-of-store soft drinks chillers
Source: Nestlé Waters
The soft drink shopper
25% of forecourt shoppers purchase a soft drink
10% of forecourt shoppers are on a drink to-go mission
Shoppers use forecourts for 14% of their total soft drink purchases
The soft drinks shopper spends on average £5.69 per trip at a forecourt
Source: him! convenience research 2013
In Brief
Coca-Cola Enterprises says its 1.75ltr Coca-Cola range is important for convenience retailers as this format is ideal for consumers who are picking up their soft drink products from their local store for a summer evening ahead, particularly with sporting events such as the World Cup coming up.
You can cater for stylish petrol heads by stocking the new Tonino Lamborghini energy drink. It comes in black cans sporting the world-famous Lamborghini name and bull. Described as the "energy drink for style-conscious individuals", it is produced in Italy. A number of high-end bars and clubs in London are already stocking the product alongside Tonino Lamborghini vodka. Distributor, the Bance Group, says the drinks provide sufficient gross profit margin to be sold at £1.35 or even £1 a can.
Sunmagic has won a number of new listings recently: in Palmer & Harvey, Hancocks, WH Smith and Tesco forecourt stores. This month sees the launch of Sunmagic lightly sparkling juice drinks in apple & cranberry and peach & melon flavours. The drinks contain 63% natural mineral water and 30% juice.
Fanta is now available in a mid-calorie special-edition raspberry & passionfruit flavour, which gets its ’mid-calorie’ positioning thanks to the use of stevia.
Sunmark says its Bulldog energy drink has a similar taste, quality and ingredients as the market leaders but at a fraction of the price. It is available in cans price-marked at just 35p.
Nestlé Pure Life is now available to c-stores in 50cl and 1ltr sports cap bottles. According to Zenith International data, it is the biggest global water brand.
Vimto has unveiled the next phase of its Seriously Mixed Up fruit campaign which aims to appeal more to the mothers of its teen audience. As such, Vimto gets redesigned packaging and a new character Vimtoad is the figurehead for the nationwide campaign.
Keep an eye out for Laimon Fresh, which features in Jennifer Lopez’s recent video ’I luh ya papi’ and is currently the subject of a sampling campaign. It is already stocked by Sainsbury, Tesco and Waitrose.
Refresco Gerber is launching a special-edition 500ml Just Juice orange, mango & lime Brazil blend to capitalise on the interest in all things Brazilian in the lead up to next month’s World Cup.
The Saka natural mineral water team is hitting the road this summer in branded vans attending festivals and street fairs as well as visiting retailers and wholesalers to give category management advice.
Oasis has a new pineapple rush variant, launched to cash in on the popularity of tropical flavours.
Levi Roots’ first still drink is coconut water & lime, available in a 500ml bottle.
Boost has three new flavours: sugar-free pink lemonade, citrus zing and exotic fruits.
Looking head
The soft drinks market is expected to grow by 3.7% by 2020 but Britvic believes that by working more in partnership with retailers it can increase that growth to 6.4%.
Its Soft Drinks Vision report highlights £2.4bn-worth of untapped soft drinks sales. It reckons these sales can be realised by 2020 through making soft drinks more relevant for every daily occasion, by meeting consumer needs, and by engaging shoppers at the point of purchase.
Britvic undertook research that looked at 33,000 people during 125,000 consumption and 40,000 purchase occasions. Then it came up with its key drivers for future soft drinks sales growth. These include making soft drinks more appealing to ’disengaged’ adults; increasing the relevance of soft drinks throughout the year, not just when it’s hot; and disrupting shoppers who are shopping on ’autopilot’.
Retailer view
Lee Whiteman, Cotgrave Service Station, Nottingham:
"Soft drinks are very important in our store as they contribute roughly 10% of our sales, as such they have 9m of space. All our soft drinks are in chillers. That’s very important, as customers don’t like warm drinks.
"Red Bull and Coca-Cola come top sales wise, closely followed by other energy drinks. And Lucozade Sport Brazilian is selling quite well at the moment.
"When looking at new lines to stock, I go by the advertising push behind them as well as by customer requests."
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