The message from the big soft drinks suppliers is always the same at this time of year: shoppers trade up to more premium lines.
But that ‘trading up’ means different things to different retailers. For Kay Patel, who has four Best-One stores in East London, it’s shoppers trading up from Best-in mixers to Schweppes while for Yogi Tatla of Londis Bracknell and Phil Bushnell, manager of Budgens Mortimer, near Reading, it’s trading up in size - to bigger bottles and multipacks.
Britvic commercial director (impulse) Nigel Paine, says that in the lead up to and throughout the festive season, people are often willing to spend on affordable luxuries and many are looking for that extra special treat to add a bit of sparkle to their in-home socialising - and that sparkle can come from soft drinks.
Soft drinks sales in c-stores shine
Last Christmas convenience stores were the star performers when it came to soft drink sales. According to Nielsen data, they outperformed the total take-home market with value sales up by 6% - double the total take-home market growth of 3% - in the 12 weeks leading up to Christmas and New Year.
As a result, convenience stores accounted for a third of soft drinks sold over the 2012 festive period and this generated £536m-worth of retail sales for convenience retailers.
According to Kantar WorldPanel data, in the eight weeks ending 23 December, 2012, the total spend on soft drinks stood at £653m.
Core sparkling soft drinks in particular increase in importance during the Christmas period. Last year they grew by 14% in the lead up to the big day, ahead of all other soft drinks sectors, which grew by 11.3% comparatively (Nielsen).
Coca-Cola, of course, continues to be a key brand for independent retailers. Kantar Worldpanel data reveals that 43% more households buy Coca-Cola, Diet Coke or Coke Zero over other cola brands at Christmas.
Paine homes in on the big sales opportunity. “One-quarter of beer, wine and spirits shoppers are already buying premium soft drinks encouraging a further 10% of these shoppers to pick up an adult soft drink could mean £2m more for the soft drinks market,” he points out.
“The festive season is a really important time of year for the convenience channel for top-up shopping, so activity should focus on top-up packs, and those purchased to fulfil distress purchases or deferred sharing opportunities.
“Shoppers are looking for larger packs for events and expect soft drinks for sharing. According to Nielsen data, December is the biggest month for multipacks sales in impulse,” he adds.
He also points to Britvic research which found that 56% of consumers are perfectly happy to drink soft drinks when socialising, regardless of what others are doing.
There is a trading-up pattern for Kay in his four stores. He says that while at other times of year his customers are happy to mix their alcoholic drinks with Jucee or Best-in lines, at Christmas/New Year they want Schweppes. “They’d rather put Schweppes out for their guests than Best-One brands. We stock lots of cordials: mint, blackcurrant and orange. We carry Roses lime cordial throughout the year, but at Christmas time sell loads more.”
His customers also trade up to bigger bottles. “They’re not interested in the 1.5ltr bottles of Coke at Christmas time they want the 2ltrs, especially if they are on a ‘two for’ deal,” he says.
Kay adds that Shloer is a good seller all year round, but surprisingly J20 glitter berry did not do well last Christmas it didn’t sell until summertime.
In a canny move, he is running a special offer for the first time this year giving consumers a free bottle of mixer with every 70cl bottle of spirits they buy.
“I’d noticed that nobody does link deals with spirits so I thought I’d give it a try. I’ll be giving away a 2ltr bottle of fizz. It’ll be either Coke and Sprite or Pepsi and 7Up - whichever comes in cheaper - but I am expecting deep-cut offers from Bestway. I’ll monitor the epos and if it pays off, I’ll do it again.”
But Neil McRobbie, who has three stores in Newtownards, Northern Ireland, is sceptical about the whole ‘trading up’ theory: “There are always promotions on the major brands at Christmas, which makes me laugh really as these are the brands that would sell anyway. It’s one of those self-fulfilling prophecies that forces the market - the price cuts on the big brands mean they are as cheap as the own label or cheaper brands so no one touches those. It’s the shopper who’s the winner - not us.”
Don’t forget the energy drinks
With most people running around trying to get a million things done in the lead up to Christmas, it’s a good time for energy drink sales. Gavin Lissimore, Red Bull head of category, agrees: “Christmas is always a sales peak for the sub-category,” he says.
He believes a key trend is trading up and advises retailers to back premium brands. “It’s important you’re pointing shoppers towards branded products as many are willing to spend more over the festive period, providing the perfect opportunity to upsell. And make sure you are fully stocked with multipacks over the Christmas period to drive trade up and increase basket spend.”
Simon Gray, managing director at Boost Drinks, reckons people who do not usually buy energy drinks will be more likely to at this time of year - particularly as mixers. “Our most popular products for mixers are the Boost Energy 1ltr bottle and the 250ml cans, which are now available in five flavours. Our flagship Boost 500ml bottle is also popular for keeping people alert and awake, which is always welcome at this time - especially for those long days following a great night out.”
As such, he’s expecting deep cuts on Coke and Pepsi and also Club Orange, which is popular in Northern Ireland.
Says Neil: “Shloer is a big Christmas dinner drink over here and it’s always on promotion. We’ll also have Red Bull on promotion - a four-pack for £3.49.”
For Yogi in Bracknell, it’s bigger bottles rather than multipacks of cans that he expects to sell well. “Coke is a big seller all year round, but the Christmas packaging definitely helps sales,” he says.
His Christmas display will include a bay of promotional drinks. “It’ll be full of 2ltr soft drinks because although shoppers may not have not come in specifically for them, when they see them they’ll buy them.”
As for mixers, he says both Schweppes and Londis Supervalu lines sell well. “Sales of soda water and slimline tonic go right up, as does lime cordial. And Schweppes blackcurrant cordial is trendy for cocktails, as is the giant 2ltr Rubicon mango which is popular as a mixer with vodka.”
Phil in Mortimer says his customers will be after bigger bottles and multpacks. “We sell six-packs of Coke all year round, but if we can get the 12s, they’ll fly out. Customers also leave the 1.5ltrs and go for 2ltr instead over Christmas.”
The sophisticated option
You can picture the folks at Shloer rubbing their hands with glee as the countdown to Christmas begins. That’s because, according to Nielsen data, 42% of Shloer’s annual sales last year were in the eight-week run-up to Christmas and New Year.
Amanda Grabham, head of brand marketing for Shloer, says: “During December 2012 Shloer sales volume and value were more than 4% up on December 2011, so the two out of three impulse retailers who don’t stock Shloer are missing a real opportunity.”
She points to the fact that almost a fifth (18%) of the adult population doesn’t drink alcohol (TGI data) as another reason for stocking the brand.
“As well as the significant proportion of adults who don’t drink alcohol at all, there are always going to be people at Christmas social occasions who aren’t drinking alcohol because they are driving, or because they are mums-to-be. There is undoubtedly a much greater demand from adults looking for more sophisticated soft drinks, either as an alternative to wine or the standard fruit juice, cola or water options. And as Shloer is grape-based this reinforces the wine-alternative connection in consumers’ minds and gives the brand an adult acceptability which makes it perfect for social gatherings.”
She recommends that c-store retailers stock Shloer white grape 75cl bottle, red grape 75cl, as well as new Shloer Celebration pink fizz or white bubbly 75cl. And she advises retailers to create a special section within their soft drinks fixture for adult soft drinks brands: “Shloer should preferably be sited next to larger bottles of mixers such as Schweppes, which are bought for similar types of occasions.”
His store stocks J20, Shloer and Roses lime juice cordial all year round. “The Roses ticks along nicely throughout the year, then at Christmas we sell two or three cases a week. I think it’s one of those things where people check their drinks’ cabinet, see the lime has gone a funny colour, so put it on their shopping list.”
He says there’s a spike in sales of tomato juice, too. “Three or four years ago people were happy buying ambient pineapple and orange juice as mixers, but now most shoppers want fresh.”
Phil expects consumers to use his store much more between Christmas and New Year for their top-up shopping - particularly for alcohol and soft drinks such as dry ginger ale and tonic.
Finally, Amanda Grabham, head of brand marketing for Shloer, says retailers should consider the day of the week that Christmas Day falls on, as this can have a big impact on sales patterns.
“This year, Christmas Day falls on a Wednesday, so the sales surge is likely to swell between the Friday and Christmas Eve on the Tuesday,” she explains. “With there being a weekend between Christmas and New Year’s Eve, consumers are likely to extend their socialising to over the mid-festivities weekend as well as at Christmas and New Year, so it should be a bit of a triple whammy, and c-store retailers will need to carefully manage their stock levels to cover this expected uplift in sales.”
Coca-Cola in Christmas push
This year, Coca-Cola will be running its biggest ever Christmas marketing campaign to help drive sales for retailers over the festive period. Activity includes new TV advertising, festive-themed Coke packs and a Christmas truck tour visiting high-footfall areas across Great Britain.
Irn-Bru goes seasonal
Irn-Bru’s seasonal packs feature the popular Snowman character. A £1m Christmas support package will back the brand and will include heavyweight digital and social media activity throughout December. There will also be a wide range of POS available.
Bestway set to energise sales
Bestway has extended its energy drinks line-up with Sours in apple and cherry flavours. The lightly carbonated tangy drinks replace lost energy via a taurine and caffeine burst, and contain B vitamins. The 250ml cans are pricemarked at 35p.
AG Barr raises marketing support
AG Barr is acknowledging the importance of the eight-week period leading up to Christmas by spending three times more on marketing support than last year. The company says this means consumer awareness of its brands will be at an all-time high.