The soft drinks category is being driven by shopper diversity and a focus on convenience, putting local retailers in the perfect position to take advantage, providing they ensure their range reflects trends.
Astore’s success can be measured by the success of its soft drinks. In Scotland, the category is worth £800m and growth is being driven by shopper diversity, continued shopper focus on value and growth in convenience. AG Barr is tapping into these trends with its ever-growing portfolio of top-performing brands offering choice, quality and value combined with pack and flavour innovation to meet the needs of the convenience sector.
The company has built long-lasting excitement around the soft drinks fixture by investing a record £12m in brand support in The Glasgow 2014 Commonwealth Games, reinforcing its role as an ‘Official Supporter’. With the momentum from the event set to continue and Scottish products in higher demand than ever, stocking up on AG Barr’s top-performing brand portfolio is key. “Our sustained investment in Irn-Bru has created a unique brand which Scottish consumers love and trust,” says Adrian Troy, Head of Marketing for AG Barr. In addition to this the Barr brand is Scotland’s most popular range of flavours and AG Barr is enabling retailers to make the most of the fast-growing low calorie cola market with the launch earlier this year of Barr Xtra Cola, a great-tasting new variant. “The cola market in Scotland is worth an impressive £182m, with low calorie cola sales accounting for 57%,” says Troy. “This fast-growing category represents a clear opportunity for retailers to maximise their profits. Of course, when it comes to cola, the undisputed king is Coca-Cola, and the company will be launching Coke Life, a lower calorie variant, next month.
In the meantime, the success of Coke Zero should not be missed by retailers. “Coke Zero has experienced strong growth, with sales increasing by 16.2% in the year to date as people look to refresh and hydrate on-the-go,” says to Dave Turner, Trade Communications Manager at Coca-Cola Enterprises (CCE). “Additionally, Coca-Cola and Coke Zero immediate consumption formats have enjoyed growth of 11.4% and 14.6% respectively.” Turner recommends retailers ensure they have a selection of light drinks. He adds: “This encouraging performance also stretched to CCE’s other brands, with 11.5% gains for Fanta, 6.3% for Dr. Pepper, and a huge growth of 15.1% for Oasis, providing potential sales opportunities for retailers in the coming months.” CCE’s water options will be extended shortly with the launch for glacéau smartwater this month. Available in 600ml and 850ml PET bottles at an rrp of 57p and 89p respectively, glacéau smartwater is made from British spring water, which is vapour distilled before electrolytes are added to give its crisp, clean taste. Lucoazde may have changed hands recently, but the brand itself is continuing to innovate with new flavours periodically appearing, and with strong marketing to back them, retailers must keep on top of the portfolio. While there has been a wealth of health-focused innovation within the sports & energy category over the last 12-18 months, flavour launches have helped drive category growth. Lucozade Energy Pink Lemonade was originally launched at the end of 2012 as a limited edition but was brought permanently into the Lucozade Energy core range in 2013 on the back of consumer demand – Lucozade received hundreds of requests through social media platforms to make it a permanent feature.
After just 28 weeks in market, Lucozade Energy Pink Lemonade was the third best-selling SKU within the Lucozade Energy portfolio and is worth an impressive £11.2m. It has brought a younger and more affluent shopper into the category, with 28% repeat buying, and contributing +6% to total energy growth without impacting the other core flavours. When it comes to merchandising, Georgina Thomas, Category Director, Lucozade Ribena Suntory, recommends that the fixture is merchandised vertically, with the following adjacencies – flavoured carbonates, cola, sports & energy, water and juice. “If retailers have limited display space, it is advised that they focus their range on the key brands,” she says, pointing out that the top 10 brands alone make up over 60% of total category sales. right range in the right place According to Thomas, the right range and layout of your soft drinks fixture can grow your sales by up to 12%. The makers of Lucozade and Ribena, who are investing heavily in consumer research, have found that shoppers find it challenging to locate the products they are looking for on shelf due to the category’s complex nature.
At any one time, a shopper can come face-to-face with circa 120 products on fixture, which can result in frustration. It is therefore essential that products are merchandised in line with segment performance; for example sports & energy drinks, with 38% market share, deserves the biggest allocation of fridge space. The health debate is something that is cited by Vimto Soft Drinks Marketing Manager, Emma Hunt, as having a major influence on the company’s strategy. “As a business, we have been developing our brand portfolio to meet the demand for healthier soft drinks. In particular, we have increased our No Added Sugar variants across Vimto by over 30%, launched NAS Vimto Squeezy to the new water enhancer category, developed Zero offerings in our Levi Roots range and offer the Panda range of still juice drinks and flavoured waters for kids, which are free from artificial colours and flavours and contain No Added Sugar.”
This summer the company is hoping to encourage people into the brand with its ongoing Seriously Mixed Up Fruit multi-media campaign. And among a number of new products, Vimto has also extended its still range with a Limited Edition 500ml No Added Sugar Strawberry Still flavour. Another popular new product from the company is Levi Roots Coconut Water ‘n’ Lime Still drink which has tapped into the trend for coconut water. The company has also relaunched its kids brand Panda with a fresh new look following extensive research. Value for money While there is a constant push from brands to launch new products, one of the overarching themes in the soft drinks category this year is the perception of value for money. Over half the people surveyed for Britvic’s recent Soft Drinks Report said they had switched to cheaper brands over the last year, meaning brands are working to ensure sales aren’t hit by consumers believing the category is too expensive.
Sales have continued to grow in recent years though, right through the recession, making the category one of the most reliable and consistent performers throughout c-stores. Last year saw sales growth of +2%, helped by a decent summer. So, if this year is anything to go by, things will improve again. Another trend which helped reach this mighty figure included price marked packs – which is basically a highly visible extension of value for money. Focus on Health was also marked out with more soft drinks manufacturers signing up to the Government’s Responsibility Deal. Home entertaining, top up shops and on-the-go consumption were the key drivers of growth Further detail can be gained when the reports begins to break down the entire category into sector. The report also says that water was one of the star performers last year, growing +13%, to £573m. Within this, Water Plus, which includes water with nutritional benefits was +8%.
Squash has also benefited from the launch of double concentrate products and, saw sales growth of +4%. Pure juice didn’t fair so well, -8% though it remains the second most popular sub-category. One note is that coconut water grow by +125%, so one to keep an eye on there. Juice Drinks was +12 as a sub-category, with convenience ahead of this at +15%. The growth, again, coming as a result of the value for money trend. Last of the fruit-based sectors and smoothies declined by 4% – with the likes of Innocent seeing falls in both volume and value. Paul Graham, General Manager at Britvic Soft Drinks, comments: “Shaped by trends such as value, premiumisation, heath and convenience, we have seen a wealth of innovation hit the market, all of which has helped to keep the sector relevant and exciting amongst a diverse audience. This combined with an unpredicted summer of sunshine; it’s unsurprising for the first time the category topped the £10bn mark. We are confident that this successful performance and the continued evolution of the category is paving the way for a positive and exciting future.”
Four pack push from AG Barr
AG Barr has launched a range of 4-pack cans to meet the needs of the growing convenience sector. The new packs are available in Irn-Bru regular and sugar free, Rubicon Mango and Passion and Barr Cream Soda, Cola, Cherryade and Lemonade.
Making a meal of it
A highly recommended method for increasing sales is to develop a meal deal offering. While many symbol groups provide the component parts for this, for unaffiliated stores it can perhaps seem a lot of work to cut your margins. Meals deals are found everywhere for a reason though, and with a bit of graft at the front end you can enjoy added sales that easily compensate for the lower margin. At Woodlands Local we have included a number of our filled rolls and sandwiches, made fresh on the premises every day. Any retailer can include sandwiches from a local supplier however. Along with this we offer a snack and a range of drinks from Coca-Cola Enterprises.
This relatively new addition to the store has proved successful, with customers who are buying a sandwich more inclined to take advantage of the savings of the meal deal. “Given the success we have with our food to go, it made perfect sense to launch a meal deal for our hungry customers,” says store manager Gerry. “Since launching, we’ve seen steady sales, with plenty of customers telling us what a good deal it is.” So, to boost those soft drinks sales with a meal deal, here are our top five tips:
- Use a range of locally made rolls and sandwiches, if possible.
- Choose a selection of soft drinks to be included in the deal – and remember some brands provide special bottle formats for such promotions
- Add in a snack – ensuring to include a healthy option like fruit
- Update your EPoS to include an automatic discount when these three products are bought, or print a specific meal deal barcode
- Ensure you promote the meal deal both inside and outside the store.
GETTING SOFT DRINKS RIGHT…
Soft drinks is one of the most profitable categories in your store so it’s important you get it right. Follow these three top tips from AG Barr, supplier of market-leading soft drinks including IRN-BRU, Barr Flavours, Rubicon and Strathmore, and you can see profits grow.
Merchandise the category…
Ensure your fixture is highly visible, well presented and located in a high football area between the door and the till. Effective ranging, space allocation and stock availability are the most important elements to get right. Make it easy for customers to find what they want by grouping categories and brands within them together. Then identify your best performing brands in each category and stock these at eye level with adequate facings to ‘signpost’ segments.
Chill your products…
Don’t underestimate the importance of offering chilled soft drinks. ‘Drink now’ sales account for more than three quarters of all soft drinks sales in impulse – and consumers prefer these drinks to be chilled. Chilled availability is the key driver for soft drinks sales, particularly between April and August – the really critical summer months. Open deck chillers will encourage people to buy more soft drinks as they are easier to shop and they enable you to display a large choice of chilled products.
Stock price-marked packs…
Price marked packs are growing in importance as they clearly indicate value for shoppers, and therefore represent an important profit opportunity for retailers. Over 50% of soft drinks growth is being driven by price marked packs*1 with the biggest growth in price marked packs coming from carbonates at +60%*1. 98% of consumers would buy a soft drink in a price marked pack from a convenience store.*2 With price-marked packs being used more frequently as manufacturers across all categories realise their importance, there is a need to continually innovate to maintain impact and continue to deliver great value to shoppers. For more information on how AG Barr can maximise your soft drinks sales contact 01236 852580.
Berry launch for Skittles drink
Mars Chocolate Drinks and Treats has extended its 350ml milk drinks range, with the introduction of Skittles Wild Berry. The bright purple packaging has been designed to stand-out on shelf and to mirror the popular confectionery brand. While Mars recommends stocking the line in the chiller along with other flavoured milks, all products are ambient if space is an issue. “This new flavour offers the category something fresh and exciting for summer,” says Michelle Frost, General Manager for Mars Chocolate Drinks & Treats, “We believe that the introduction of this innovative new flavour will further add to the sector’s 21% growth.”
Aiming for adults
SHS Drinks, the distributor for Shloer, says that local retailers don’t realise the potential of the adult soft drinks sector. Shloer is an £11.5m brand in Scotland and according to SHS Drinks volume sales of adult soft drinks are up by 16% in the take home sector in Scotland, and with value increasing by 19% over the past 12 months. This summer SHS Drinks has been urging convenience retailers to take a leaf out of the supermarkets’ books and include Shloer in their barbecue offering. Amanda Grabham, Marketing Director – Soft Drinks at SHS Drinks says: “When one multiple retailer featured Shloer as part of their barbecue display last summer, the results were pretty impressive. Over the two week barbecue promotional period Shloer sales increased by 78%, while sales in the adult soft drinks category as a whole grew by 39%.”
Bursting with sales potential
With consumers continuing to seek out healthier products, holding a strong brand of juice drinks can be useful for driving sales. One such brand is Juiceburst, which has a range of 14 flavours. In May this year, Juiceburst launched a range of lower calorie Juice Drinks called Juiceburst Skinny, which directly responds to the Government’s drive to reduce sugar content in consumer diets. With over a year in development, new Juiceburst Skinny was specifically formulated to ensure it delivers the same great Juiceburst flavour, but with only 99 calories in a 400ml bottle. Available in three new flavours – Peach & Passionfruit, Cherry & Apple and Mango & Lime – each variant is sweetened using natural Stevia extract as an alternative to sugar. As a result, Juiceburst Skinny has 45% less sugar and still counts as one of your five a day. To differentiate Juiceburst Skinny from the core Juiceburst range, a new, slimmer 400ml bottle has also been designed, illustrating the fruits on a light silver label in contrast to the normal black labels. In addition, each bottle adopts the brand’s successful Blippable label to give consumers the chance to play games and win prizes. The brand has also reformulated a number of flavours in its range, and recently added a Pomegranate & Blueberry flavour.
Pear Gold makes comeback Britvic
Soft Drinks has relaunched its summer limited edition flavour, J2O Pear Gold. The return of the pear and guava flavoured drink is expected to attract new consumers to the J2O brand as last year 72% of consumers purchasing Pear Gold were completely new to the brand. The return of J2O Pear Gold will be supported by a heavy-weight marketing campaign featuring nationwide print advertising at large-scale outdoor sites to drive mass awareness. In addition, 6-sheet posters will build awareness and will be placed in retailer car-parks and sampling bars, in close proximity to the point-of-purchase, with the aim of getting J2O Pear Gold on shopping lists ahead of consumers entering the store.