Sales of cold drinks set to soar this summer

After what seemed like the longest winter in recent history, the sun has finally emerged victorious and consumers are thirstier than ever. Vending International takes a look back at 2010 to find out why the cold drinks market looks set for even hotter sales in 2011.

Soft drinks have once again demonstrated their resilience in spite of tough economic conditions, growing to £9.4bn – that’s according to the 2011 Britvic Soft Drinks Report. Murray Harris, Customer Management Director, explains: “2010 was another a tough year for UK consumers, but soft drinks remained resilient. Although people were watching their pounds, they were still willing to spend a comparatively small amount on a soft drink, whether it’s at the train station on the way to work or at their local retailer on the way home from school.”

Also commenting on the report, The Guardian said the most notable trend was a ‘huge rise’ in the popularity of glucose and stimulant drinks such as Red Bull and Gatorade in the take-home market, with a 19% increase in both volume and value. With many people facing longer working hours, such drinks proved a handy way to boost flagging energy levels, it said. The added convenience of vending machines as a point of purchase will no doubt have contributed greatly to these figures.

Highlighting another interesting aspect of the report, the article in The Guardian adds: “The curious American concept of cold hot drinks were another surprising favourite in 2010, reversing the previous year’s 8% decline into an impressive 93% value growth. The big winners here were Lipton Ice Tea and newcomers Starbucks Discoveries and Starbucks Double Shot.” With tea being the most popular drink in the UK, it makes sense for it to extend into different formats, offering a thirst quenching alternative throughout the year.

The report was based on independent Nielsen and CGA market data and revealed that the Impulse channel had overtaken the Grocery Multiples. As more consumers took advantage of ‘top up shops’ and single serve formats became more popular, the market grew by 1% in value to £2.8 billion it said, in what is good news for the vending industry.

Finally, though perhaps unsurprisingly, Cola, the largest sub-category in the total market, grew substantially across all channels. According to the soft drink giant’s annual report, in 2010 Coca Cola maintained its leadership as the world’s largest juice and juice drink company, selling nearly 2 billion unit cases of juice and juice drinks across more than 70 brands. It celebrates its 125th anniversary this year and looking forward, says: “It is predicted that by the year 2020, the world will have nearly 1 billion more people whose disposable incomes will afford them choices and opportunities unthinkable a generation ago. We must discover innovative ways to connect with our traditional consumer base and this emerging global middle class by creating new products and packaging formats for all lifestyles and occasions.”

In its 2011 Responsibility Report The British Soft Drinks Association explains the market’s activity further: “Consumers can choose from a wide range of drinks, including 100 per cent natural drinks, functional drinks, and also diet and low calorie options for those who prefer them. Consumers respond to this choice: for example, drinks without added sugar now make up around 60 per cent of the market, up from 30 per cent 20 years ago.”

Key trends in recent years have been health and added value, which in many ways go hand in hand. With consumer finances facing continued strain, the perceived health benefits of a drink add value to it, making spending a necessity, not a barrier.

The UK Soft Drinks Responsibility Report goes onto describe some of the ways in which the soft drinks industry meets its obligations towards its consumers and the wider public. “Soft drinks companies observe all applicable codes relating to their advertising and on their websites. This includes the obligation to be consistent with public health policy in emphasising good dietary behaviour and an active lifestyle as a means of promoting health,” it says.

Brands acting responsibly

Lucozade Sport is launching a major integrated consumer campaign, Sport FREE60, which is designed to encourage consumers to get active this summer by taking part in free sports sessions. Backed by a £4million marketing investment, the promotion offers consumers the chance to claim thousands of free sports sessions, from football to wakeboarding. It will run across all Lucozade Sport flavours in 500ml, 750ml and multi-packs from the beginning of this month to 30th July.

Alex Saunders, senior brand manager, Lucozade Sport explains: “We have created partnerships with more than 1,500 leading sporting venues across the UK and we hope that by removing the cost of the sports session and helping consumers to take part in sport locally, we can help break through two of the main barriers for people getting active.”

The makers of Lucozade will also be investing in bespoke retailer support with posters and graphics to help direct consumers to the promotions in store, together with point of sale materials and merchandising units.

The Ribena Berry characters are also back in a new series of adverts. The latest instalment from the Berry characters highlights the nutritional value of blackcurrants as a source of Vitamin C and emphasises the importance of domestically sourced food and drink. It invites viewers to delve deep into the world of the Ribena Berries as they enjoy the beautiful British summer.

“Our new advertising campaign responds to increased consumer interest in nutritional value and provenance, and we are confident that it will generate a significant uplift in sales for Ribena,” comments Verity Clifton, marketing director, Ribena. “The Berry characters were a real hit with families last year and provide an engaging and visual means of communicating the role of positive nutrition in leading a healthy lifestyle.”

The flavoured milk market, meanwhile, is worth a staggering £187m, up 6% year on year. The three key players in the milkshake market are said to be YAZOO, Frijj and private label, holding 72% of the whole market. Within impulse, YAZOO is said to be the clear market leader holding a 56% share.

One clear way in which YAZOO focuses on the brand’s healthy credentials is through its on-going commitment to grassroots sports. Mark Cueto (England & Sale Sharks) joined forces with the brand and the Rugby Football Union four years ago, to bring Tag Rugby to well over one million primary school children, as well as donating balls, tag-belts and other equipment to thousands of schools across the country. The successful partnership between YAZOO and RFU is set to continue with YAZOO extending the agreement until 2012. The new contract will see the introduction of a one-stop resource for rugby union in primary schools, Tag 4 Teachers training programme and a continuation of the TAG Rugby coaching programme.

The flavoured milk category is currently in growth in the UK and adults are a big contributor. Research shows that over the last 12 months half of all adults have drunk flavoured milk. Due to the increase in consumption, the flavoured milk category has grown by 7%.

Sales of bottled drinks overtake cans

The 500ml flavoured carbonate market is said to be more than double the value of the carbonated can market at £94m. The success of Sunkist since it re-launched last year has led to the launch of bigger formats on its two most popular fruit flavours. The international soft drinks brand has created fully sleeved 500ml bottles in Orange and Summer Fruits following the success of its existing range of flavours in 330ml cans. The new bottles will be available exclusively for the Impulse market th
rough the Wholesale channel from the beginning of May.

It is recommended that we drink around eight glasses of water a day to keep hydrated, whether that be through the wide choice of mineral, spring and flavoured waters available or other varieties of cold drink. The market has seen a number of innovations over the years and as the summer months approach, there are a wide range of product options available to ensure the nation’s health and well being, during a crucial time for businesses and consumers alike.

0