Food-led outlets help push up soft drinks sales in on-trade


Britvic Soft Drinks Review

Sales of soft drinks in the on-trade are edging up, especially in outlets serving food, according to the latest market review from Britvic.

The group, which owns brands such as Pepsi and J2O, reports that volumes of all soft drinks in Britain’s bars, pubs and restaurants grew by 0.5% last year, achieving value sales of more than £4.2billion.

Managed pubs were particularly successful at holding steady in the face of changing consumer spending, largely thanks to all-day dining and value-for-money offers. The biggest increases in sales were in food-led outlets.

The overall frequency of eating and drinking out declined but spend per meal occasion rose, especially with more consumers becoming “weekend millionaires” indulging themselves at the weekend after living frugally during the week.

The Britvic Soft Drinks Report, based on the independent brand index from on-trade research specialist CGA, also showed that cola retained the largest share of the soft drinks market, while higher-sugar energy drinks suffered a sharp decline because of concern about health.

Paul Graham, GB managing director at Britvic, said: “2014 was the year when the on-premise ‘held steady’ and showed its true resilience in the face of shifting consumer purchasing patterns and wider environmental challenges,

“Shaped by multiple consumer trends such as pleasure seeking, the increasing focus on the wider health agenda, marketing and legislation, and the demand for added value out of every experience, the soft drinks manufacturers who have been the most successful have been the ones who have invested in innovation, as well as reformatting to provide low- or no-calorie variants.

“Although these are challenging and changing times, there are significant growth opportunities for soft drinks in the on-premise in 2015 and beyond.”

Packaged sales continued to lead the way with value sales of £2.2billion, up 4.3% year on year, while draught sales increased 2.9%, with value sales at £2.1billion. Britvic’s draught formats achieved value sales of £962million compared to Coca-Cola Enterprises at £885million.

Cola had 40% market share, with a value of £1.7billion, across pubs, bars, clubs, hotels and restaurants. Draught cola grew by 2.5% in terms of value to £1.2billion.

Pepsi retained its number-one position in pubs, bars and clubs with a value of £607million, while the Coca-Cola range continued to perform strongly in restaurants and hotels, with value sales of £111million and £256million respectively.

There was strong growth from non-sugar colas, with Pepsi Max proving particularly popular in pubs, bars and clubs, with a 38.1% increase in sales value to £15million. Diet Coke grew in the restaurant sector by 12.8% to £49.7million.

Lemonade sales dropped 0.1% in value sales to £532million but remained the second-largest segment in the on-trade in terms of value sales. The best-selling brand, R Whites, saw sales fall by 1.7% in value to £224million while number-two brand, Schweppes, experienced a slight uplift at 1.6% to £215million in value sales.

The trend for premiumisation continued, with Fever-Tree lemonade being the only brand to show dramatic growth in on-premise. Value sales for the brand increased 44.6% to £600,000 in pubs, bars and clubs and by 175% to £200,000 in restaurants.

Overall, mixers saw value sales increases by 12.6% to £332million. Schweppes maintained its top position with a sales value increase of 12.9% to £171million.

The largest growth for mixers was seen in restaurants, where the market grew by 23% to reach value sales of £41million. Growth across pubs, bars and clubs was at 11% to £225million, and for hotels it was up 12.8% with value sales of £ £66million.

Low- or no-calorie variants continued to gather ground, reflected in the increased popularity of water in the on-trade, jumping in value by 26.8% to become the fifth most purchased soft drink, with sales of £296million.

Higher-sugar energy declined by 10.2% in value sales over the year, with the market valued at £225million across pubs, bars and clubs, restaurants and hotels.

Pure juices declined in hotels by 16% but grew by 1% in restaurants and by 6.7% in pubs, bars and clubs. Pure juice mixers declined in value and volume by 0.9% although they still accounted for £192million in value sales. Non-mixer pure juices still accounted for values sales of £143million.

Picture from the Britvic Soft Drinks Review 2015 report.

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