Maintaining momentum

Shelves of soft drinks

Maintaining growth in the soft drinks category is a priority for convenience retailers, and by working with suppliers to create a fixture that taps into current trends, while making the most of events, that growth can continue.

by Mia Hunt

Commanding up to 10% of total store revenue, soft drinks play a vital role in convenience stores, and with the value of soft drinks growing faster in local stores than in the overall market at +2.8%, it’s crucial to get range and display right.

According to the latest Britvic Soft Drinks Review, the overall category increased by 0.4% in value sales to £7.6bn, with convenience experiencing stronger growth than grocery multiples at +2.8% value and +2.6% volume.

For convenience stores smaller than 280 sq m, soft drinks commanded 39.1% value share at £3m, with shoppers continuing to purchase soft drinks as part of top-up shops or on-the-go consumption occasions.

“Maintaining momentum in the convenience channel requires a clear understanding of local shoppers’ requirements on pricing, promotions, range and missions,” says Ian Johnstone, Direct Sales Controller Scotland for AG Barr at AG Barr.

So, how can retailers continue to grow sales in a category already so strong? With the nature of the category changing in summer as consumers seek hydration, retailers must ensure their chillers are well stocked and working efficiently, particularly in hot spells of weather.

Wave of water

With consumers more aware of a balanced lifestyle and on the lookout for healthy alternatives, bottled water has seen particularly strong growth – expected to exceed £2.1bn by 2018. And with the British Medical Association announcing last month that it was backing moves for a 20% tax on soft drinks as a ‘useful first step’ towards tackling the UK’s obesity crisis, there could be challenges on the horizon for the sugar-sweetened sector that could impact water sales.

Hotter weather often results in consumers moving away from carbonated drinks in favour of still drinks and water, and CBL highlights that the flavoured water sector is one of the fastest growing in the category, and one that can command a price premium, delivering greater value for retailers.

“Within a healthy, balanced lifestyle and diet, many consumers are choosing water and flavoured water options as a zero calorie ways of keeping refreshed,” says Ian Johnstone, Direct Sales Controller Scotland for AG Barr. “Provenance and product benefits are also important in relation to water. Consumers are not only looking for water brands they know and trust, they are also increasingly conscious about the source of the water which reinforces the provenance message.”

Chilled drinks

Nigel Paine, GB Commercial Director for Out of Home at Britvic points to Nielsen research that shows 86% of consumers want their soft drinks chilled, with 53% going as far as to say they’d pay more for a soft drink if it was cold. With the majority of single-serve soft drinks consumed immediately after purchase in impulse, it makes sense to keep them chilled.

He also highlights that 49% of people don’t see soft drinks when they are in a convenience store, but of those that do 56% will buy, so it helps to have the main chiller in a high traffic area.

“With many people looking for a drink they can have right away, retailers should keep their chillers well stocked with a wide range of soft drinks,” says Simon Harrison, Wholesale Director at Coca-Cola Enterprises (CCE). “A choice of formats and variants, as well as a selection of lower or zero sugar options, will give consumers the variety they want.”

Impulse sales

According to Georgina Thomas, Category Director at Lucozade Ribena Suntory, interrupting the shopper journey is a fundamental way to encourage additional sales. “With 17% of shoppers buying a product on impulse, there is an opportunity to drive sales by ensuring the soft drinks fixture is as appealing as possible, through the use of POS and well signposted segments such as low-sugar, for example,” she says. “Sixty-five per cent of shoppers claimed to have bought something from a secondary location on their last visit, demonstrating the opportunity available to retailers from stocking soft drinks in alternative locations to the main fixture.”

Displaying soft drinks next to complimentary snacks is another factor. Research shows 67% of snacks and soft drinks are consumed together, but only 13% are sold together. A Britvic trial using retailer EPoS data showed that by linking soft drinks to bagged snacks, sales increased by up to 16% for on-the-go soft drinks and 34% for take-home two-litre bottles of Pepsi.

As Lucozade Ribena Suntory makes clear, offering a wide range of chilled best-selling soft drinks can help retailers to unlock vital summer sales. Indeed, Nielsen research shows for every degree the temperature rises above 14 degrees, there is a 2-5% increase in sales, depending on segment.

Incremental sales can be expected across the top five sectors – water (+34%), carbonates (+22%), juices (+20%), sports & energy (+18%), and cola (+15%).

“Scotland’s £225m impulse soft drinks category continues to be a key profit driver for retailers,” explains AG Barr’s Johnstone. “Last summer, the total soft drinks category indexed at +13% in Scotland with water, juice drinks and other flavoured carbonates seeing the biggest summer uplifts.”

“Retailers may wish to feature soft-drinks in special displays for summer – for instance, in a barbecues section where products are displayed alongside other essentials such as meat, sauces and charcoal,” he adds. “These related products could also allow retailers to create their own ‘Meal Deal’ offers, where soft drinks can be bought alongside selected barbecue or party items at a discounted price.”

AG Barr capitalises on summer sales with NPD and promotion
Rockstar energy drinks

AG Barr has launched Rockstar Freeze and Tropicoola to satisfy summer season demand and is continuing to invest in Scotland with £6m spend.

AG Barr has capitalised on the success of the energy category – now worth over £1bn and growing faster than the overall drinks market – with Rockstar Freeze. Delivering an innovative cooling sensation, it is available in Frozen Lime and Frozen Watermelon flavours, and a full range of eye-catching POS will be available to support the launch, including standees, posters, shelf barkers and display units.

It has also launched Barr Tropicoola, a new, special edition, variant developed especially for summer, to enable retailers to make the most of the growth in its Barr range.
Meanwhile, IRN-BRU will benefit from its biggest ever on-pack promotion, BRU-PLANET, offering consumers the chance to win a £20,000 personalised holiday, anywhere in the world.

At CCE, Harrison points out that at this time of year, people also enjoy spur-of-the-moment social gatherings like barbecues or picnics, as well as watching high profile sporting events, including cricket and tennis, plus the Rugby World Cup. “Retailers can make the most of this opportunity by making space in the chiller for multipacks of cans, or large bottles, encouraging people to make last-minute purchases, ” he says.

Exotic flavours

When it comes to flavours likely to emerge as new favourites, exotic flavours have seen rapid growth and are likely to be an on-going trend.

AG Barr’s range of Rubicon flavours includes Mango, Passionfruit, Guava, Lychee, Pomegranate, Watermelon, Guanabana and Papaya and has seen strong growth of +17% in Scottish impulse sales.

It’s a trend that feeds in to the adult soft drinks market, which grew by 9.1% in the last year.

Amanda Grabham, Marketing Director – Soft Drinks at SHS Drinks whose portfolio includes Shloer, says grape, mango, elderflower, mango and coconut are flavours to watch, as well as ginger – although it is a polarising flavour, not for everyone – and mint.

“Consumers are turning to adult soft drinks because they want flavours which are alternatives to wine and are more suited to the adult palate,” she says. And there is undoubtedly a thirst for more interesting and exotic flavour combinations, with 46% of consumers saying they would like to see more adventurous flavours.”

In line with this trend, CCE has introduced a new line of Schweppes Sparkling Juice Drinks in Grapefruit & Blood Orange, Orange & Cranberry and Lemon & Elderflower variants to cater for sophisticated palettes. Available in 750ml bottles and 330ml cans, the range has an rrp of £2 and 79p respectively and at just 20kcal per 100ml, they offer the lowest calorie count within the adult special sector.