Soft drinks is the biggest grocery category in the UK. Last year, according to Britvic's soft drinks report, take-home sales were worth £5.9bn, a figure up 8% on 2005. Interestingly, soft drinks outperformed all other grocery categories in 2006 except for toilet tissue. In all, soft drinks sales have grown 44% since 2001, representing £1.8bn in added value to the category.
In the convenience and impulse channel, soft drink sales were up 7% to reach £1.9bn in 2006, with 1.5 billion litres sold.
As to the performance of the different soft drinks categories, still drinks continue to outperform carbonates with pure juice, water, functionals and smoothies driving value growth. Sales of fruit-flavoured carbonates continue to decline while sales of other carbonates including cola, lemonade, non-fruit and mixers remain stable. Cola, pure juice and water lead the category in value and volume.

Good hydration
GSK category planning controller Helen Tomlinson comments: "The impact of consumer trends - taste, convenience and chiefly health - is reflected in the performance of the water and energy segments, and ultimately the soft drinks category. Consumers are looking for products with functional benefits and, as a result, brands with added vitamins, low-calorie variants and those that provide additional health benefits will be in highest demand."
Britvic media manager Julian Mears puts the soft drinks category's continued growth down to two things: constant innovation and heavyweight marketing support. However, for c-store retailers to capitalise on the growth he recommends they pay particular attention to purchasing occasions: "People consume soft drinks primarily for hydration and enjoyment, and they want different drinks at different times of the day - with their lunch they might want a full-sugar indulgent line, but after the gym they'll want a rehydrating product."
There are already many better-for-you concoctions available, but Mears reckons we could soon be getting drinks with more 'nutraceutical' benefits, such as those that give you clearer skin.
Obviously, there has been a legislative impact on the market with the changes in rules on advertising to children, new food labelling and the bans on certain drinks in schools, however the industry has quickly adapted to this. Says Mears: "Five or six years ago we were saying that the trend would be more towards health, such as lower-sugar drinks, so we've been working towards that."
He reckons the outlook's good
for soft drinks: "We might not see growth to the extent that we have recently, but we expect it to be
3-4% year on year over the next few years. If you look at the soft drinks consumption levels in Europe you can see we still have a huge opportunity for growth here in the UK.

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Retailer view


John Inglis, Spar, Southampton
"The weather makes a big difference to our soft drink sales. In normal temperatures we'd sell 100-120 500ml bottles of Evian a week, but when it gets really hot - say 30°C - we sell 500 a week. We can keep up with demand because we have three deliveries a week. Sales of other drinks increase, too, but not as much as water.
"Red Bull sells steadily; at up to 200 cans a week. We don't do very well with smoothies and Coke Zero hasn't been a huge hit for us. Over the past couple of years there have been loads of Coke launches and they did add interest and excitement at first, but now people are used to them."

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