Britvic has published its annual Soft Drinks Review, presenting facts and figures, insights, trends and issues facing the industry.
The report shows that 2018 was an unprecedented year for the soft drinks category, with a number of impactful events to navigate.
It delivered strong total value sales in the foodservice and licensed category of £7.1bn – an increase of +3.8% year on year. Total licensed soft drinks value sales accounted for £4.4bn (+4.8%) while foodservice delivered £2.7bn (+2.5%).
Rachel Phillips, Britvic’s out of home commercial director, said: “2018 was nothing short of extraordinary, with a number of factors impacting the soft drinks category.
“We had to contend with extremely cold weather conditions at the beginning of the year, followed by the hottest summer on record for 30 years which also included the CO2 shortage early June.
“Against this backdrop, the category delivered a sterling performance and it clearly demonstrates the opportunity that licensed operators and foodservice retailers can unlock.”
What’s more, only 8.4% of the total soft drinks market became levy liable in April last year, signifying the concerted effort by manufacturers to create sustainable solutions through a variety of reformulation and product packaging strategies.
“The levy has left an indelible imprint on the soft drinks category,” continued Rachel. “Additionally, we’ve seen consumers increasingly looking for low and no sugar drinks, which gives us a clear indicator of the future.
“Low and no-alcohol drinks continued to gain traction in 2018, again pointing to the important role that soft drinks – especially adult soft drinks – can play in the licensed category.”
Britvic’s report also showed that soft drinks are the drink of choice for those looking to moderate their alcohol consumption, yet two in three consumers want to see more adult soft drinks that are less sweet and favour flavours such as herbs and botanicals.
In the licensed market, growth was driven by managed wet-led, food-led freehold and leased and tenanted pubs. The foodservice sector experienced a high rate of soft drinks sales in quick service restaurants, while soft drink sales in contract catering outperformed the total foodservice market (+4.2%), driven by health, welfare and education.
Overall, strongest soft drinks growth continued to come from the delivery market, food to go, the steady growth of coffee outlets and travel hub venues.
Product categories that drove soft drinks performance growth in both foodservice and licensed included cola, which delivered the largest actual value (+8.7% YoY), with mixers at +30.2% delivering the highest value performance. Water Plus also delivered a strong performance with double digit growth (+13.2%) as consumers opt for more considered health choices.
Rachel added: “The channel segment and product category performances shine a light on the opportunity that soft drinks sales present.
“Britvic has created a simple action plan that we will be sharing in the coming weeks through the trade press to help operators and retailers realise the potential to generate additional profit.
“The key to unlocking soft drinks sales potential is by understanding the trends that impact consumers today and in the future and our action plan is designed to offer bite size advice to understanding and making the most of these opportunities.
“We’ll be discussing how a focus on health and wellness options can drive growth, while premiumisation of mainstream brands can maximise value from the high volume core.
“Personalisation has a definite role to play this year and we cannot forget about the increasing number of people looking for experiences to make their out of home experiences truly one-of-a-kind.”
The 2018 Foodservice & Licensed Britvic Soft Drinks Review is available for download here.