Premium soft drinks grow to match spirits and beer


Fentimans

Consumers are buying more premium soft drinks when they go out but sales have the potential to be much higher, according to the latest Britvic Soft Drinks Review.

The annual report on the UK market found that premium mixers such as Fever-Tree and Fentimans grew by 14% in 2015 while premium spirits were up 19%.

However, only five per cent of soft drinks sales overall were premium products compared to 26% of spirits sales and 40% of lager sales.

Ruth Scullin, senior category manager for the licensed channel at Britvic, said there was “a real opportunity” for premium soft drinks solutions, including matching high-quality spirits with high-quality mixers.

“Consumers are looking for something that has heritage and a back story and provides taste profiles that suit them as adults, and they are prepared to pay a premium.”

Consumers’ search for more sophisticated soft drinks experiences when out of the home has led to a surge in customisation through cocktails and mixing in the on-trade. “Demand for personalisation increases,” Ruth added. “What consumers really want when they go out is something they can’t easily replicate at home.”

The rise in premium products is part of ongoing growth for soft drinks in the licensed channel. Last year, sales grew by 4.3% in value to more than £4.1bn, according to the Britvic Soft Drinks Review which uses data from sources such as CGA Strategy.

However, across the GB market as a whole, soft drinks value sales remained flat in line with total market level in 2015, but the estimated value of the UK category as a whole was still well over £14bn.

Growth in the licensed trade follows an increase in the number of UK adults who chose to eat and drink out of the home in 2015, up by one million. Restaurants, hotels, and food-led pubs benefited from consumers eating out more, with these outlets contributing to 96% of overall soft drinks growth.

Nigel Paine, GB commercial director for out of home at Britvic, commented: “2015 was the year when soft drinks made the most of changing consumer purchasing patterns in both licensed and leisure.

“Shaped by multiple consumer trends, such as on-the-go, experiential and eating-out purchasing, the soft drinks category performed well across both channels, despite poor summer weather reducing footfall to licensed premises.

“In 2016 and beyond, there is a huge opportunity in licensed and leisure to showcase soft drinks as relevant and exciting offerings suitable for consumption across a wide variety of on-the-go and social occasions.

“With macro trends showing consumer desire for experience, health credentials and alcohol moderation, soft drinks have the opportunity to invite consumers to step into a more inspired drinking experience even more often and on more occasions.”

With consumer concerns about health, low-calorie purchases accounted for 27% of soft drinks sales in both the licensed and leisure channels. Low-calorie colas such as Pepsi Max performed particularly well, growing by 24% across both channels.

However, Britvic’s GB managing director, Paul Graham, said the company was disappointed and surprised by Chancellor George Osborne’s announcement of a sugar drinks levy in the Budget.

Stressing that the soft drink industry was making progress in reducing sugar and calories in its products, he said: “A single-ingredient focus on the soft drink category is not going to solve the obesity problem. Only a holistic wide-ranging strategy will tackle obesity.”

Britvic also sees an opportunity for “vitality” products such as its own brand Purdey’s, a blend of grape and apple juices with spring water, botanical extracts and B vitamins. Traditionally a grocery and convenience sale, there is interest in the brand in the on-trade, including Purdey’s use as a mixer with spirits such as gin.

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