Soft drinks: Thirst aid

The sudden emergence of Covid-19 and subsequent lockdowns saw a reduction in the number of shoppers visiting their local convenience store to pick up soft drinks on-the-go. Added to this, many consumers have been financially affected by the pandemic.

Phil Sanders, out-of-home commercial director at Britvic, says: “The economic hardship that has occurred as a ripple effect from the pandemic has caused considerable changes in the way consumers are behaving and valuing products. This has changed traditional shopping missions, purchases and overall basket spend, with many people now more mindful about their spending.”

But the biggest shift has been the increase in sales of sharing and take-home bottles and multi-packs, which rose by 38% in the convenience sector, says Severine Hemms, shopper marketing manager at Nestlé Waters, as consumers made more planned trips to stores, leading to a higher basket spend.

“Almost 50% of UK shoppers used convenience stores more during the first lockdown last year, so with 2020 emphasising the importance of the convenience channel, 2021 presents retailers with a golden opportunity to retain these new shoppers,” she says.

Impulse growth
Retailers are now able to grow sales of impulse soft drinks while retaining their take-home customers. Adrian Hipkiss, marketing director at Boost Drinks, says: “As the world returns to a little normality, we would expect consumer habits and trends to continue, with the on-the-go market a key sector for the summer.

With people looking forward to socialising again, especially outside in thesummer weather, we can expect to see a rise in on-the-go sales. With staycations on the increase this year, people will be turning to public transport to get them to their destination. This will lead to on-the-go products seeing a surge as people look to replenish themselves on their journeys.”

Top category
This is especially true for the energy drinks segment which, according to John Luck, chief marketing officer at Carabao, has seen its share of multi-pack formats begin to decrease again within the independent sector. He says: “As lockdown restrictions ease, shoppers will opt for more regular visits to make impulse purchases of single formats.

As a result, this summer we are likely to see more normalised, pre-pandemic buying patterns.” Energy drinks remain the number one category within the impulse sector with a 30% share of the overall soft drinks category and have seen a 39% increase in value sales over the last four weeks. Luck says the summer represents a near £65m opportunity for the energy drinks category as consumers attend summer events such as sports matches and music festivals.

“An opportunity not to be missed, independents should ensure they are stocking a range of healthier and great-tasting energy drinks in the chiller to capitalise on the opportunity for on-the-go purchases,” he says.

Instant refreshment
The bottled water segment is also expected to see a rise in impulse sales, despite the “notable growth” in larger formats. Warren Plaskett, head of marketing for Nestlé Waters, says: “As the nation travelled less and stayed home more during the pandemic, on-the-go consumption largely shifted to take-home occasions, resulting in a notable growth in larger 1.5-litre and multi-pack formats.

Multi-packs outperformed the bottled water category by 2% in 2020 and now account for almost half of the total plain water category. With this new era of flexi-working and increased working from home, it is forecast that a good proportion of this growth is set to be retained even after lockdown restrictions ease.”

However, Hemms from Nestlé Waters says the increasingly warm weather and easing of lockdown restrictions should result in shopper demand for on-the-go bottled water formats for “instant refreshment”. About 69% of total plain water sales come from on-the-go formats, so it is “essential” that retailers stock the right brands to “meet the needs of on-the-go consumption, whether that is for instant refreshment or consumption on the move”. Buxton’s 500ml, 750ml and one-litre sports-cap bottles are “winning formats” for retailers, she says, with 500ml the biggest-selling pack format in convenience.

Healthy hydration
Bottled water also taps into the “healthy hydration” trend, says Angela Reay, brand and innovation controller at Nichols, owner of the Vimto brand, as balanced choices become more of a priority for consumers, especially during the summer. Within carbonates, Hipkiss at Boost says there has been a 17% rise in sugar-free soft drink sales since the introduction of the sugar tax in 2018.

The trend for no and low sugar soft drinks is also likely to continue “irrespective of the radical changes brought on by coronavirus”, says Matt Gouldsmith, channel director for wholesale at Suntory Beverage & Food, owner of the Lucozade brand. “We have seen a long-term trend towards drinks with lower sugar as consumers are becoming more aware of their health and wellbeing.

“With 46% of soft drinks shoppers agreeing they ‘try to lead a healthy lifestyle’, retailers should ensure their chillers are stocked up on lower-sugar soft drinks such as Ribena Light and Lucozade Zero – now worth a combined £43.7m – to capitalise on the ongoing trend towards lower-sugar choices. In fact, this segment of the market is extremely important in contributing to the growth of take-home soft drinks, with diet and zero drinks growing at 19% and outperforming the total drink-later market.”

Functional benefits
‘Wellness’ is one of the latest soft drink segments to gain popularity, says Sanders from Britvic, boosted by a growing desire to look and feel good. He says 31% of shoppers are interested in soft drinks that contain additional functional benefits.

“More people are looking for benefits above and beyond their standard diets, such as boosting energy levels, maintaining a healthy heart and encouraging strong brain function. As a result, wellness drinks are now more prevalent than ever. The offering of ‘added-benefit’ products that contain naturally sourced ingredients, fruit juice and provide added health benefits is also on the rise.

“Purdey’s, the sparkling vitality drinks brand, delivers the important benefits customers look for in functional soft drinks – taste, wellness and energy. Containing energising B-vitamins, botanicals and real fruit juice, as well as only naturally occurring sugars, Purdey’s gives consumers a refreshingly energising lift.

“Purdey’s has grown by 68% in the past four years, adding £3.5m of incremental value to the soft drinks category. Purdey’s is expecting to continue this growth in 2021, refreshing its range and adding exciting new products that will appeal to customers who want additional wellness benefits from their soft drink choices.”

Great tastes
Adrian Troy, marketing director at Barr Soft Drinks, says: “As the trend of health continues to grow, so does the range of products that are available to shoppers. However, taste remains the number one reason for shoppers to choose a soft drink and it is essential that retailers offer a wide choice of flavours to satisfy their many different needs.”

Many shoppers look to flavoured sparkling water, he says, as they are “not prepared to compromise on taste when looking for healthier options”. Flavoured sparkling water delivers 50% more value, so retailers need to make sure they have the right balance of products in their stores to meet shopper needs and maximise their sales.

To cater for health-conscious shoppers looking for drinks that “still deliver on great taste”, Sanders says Britvic’s Aqua Libra brand plays perfectly into this. The brand offers a “truly healthier alternative” to full-sugar, low or no sugar soft drinks and a more flavoursome option than plain water.

Social summer
While health and hydration are key trends during the summer, this year the season is set to see a huge increase in social gatherings among friends and family following more than a year of restrictions. The number of summer occasions such as barbecues and picnics is predicted to soar – Sanders says they have already grown by 15% – so retailers should prepare themselves for an influx of shoppers popping in to stock up on relevant soft drinks.

Reay from Nichols says: “Ensuring your soft drinks range taps in to summer-specific occasions is another great way to drive sales such as barbecue and other outdoor dining moments.” Amy Burgess, senior trade communications manager at Coca-Cola Europacific Partners (CCEP), says sparkling soft drinks in particular help bring social summer occasions to life and colas, flavoured carbonates and mixers from trusted brands “represent guaranteed quality at a time when many consumers remain focused on affordable treats”.

Mixed drinks
Over the past year, many shoppers have been recreating the on-trade experience at home with drinks that “capture the excitement of going out, like mixed drinks, cocktails and mocktails”. Despite many on-trade outlets opening up, Burgess says this trend is expected to continue, so retailers should stock a range of mixers to tap into this opportunity.

“Schweppes remains a popular choice thanks to its rich heritage, distinctive taste and unmatched effervescence, worth more than £124m in retail and has increased value by almost a third over the last year, with a portfolio including Schweppes Classic Tonic, Schweppes Slimline Tonic and Schweppes Lemonade.

“Adult soft drinks like Appletiser can also offer a sophisticated option to enjoy while others may be drinking beer, wine and cocktails. Made with pure fruit juice and with no added sugar, Appletiser is particularly appealing to health-conscious consumers. It can be enjoyed on its own, as a base for mocktails or as an accompaniment to spirits.”

By Éilis Cronin