More people will be keeping festive celebrations close to home this year, says Aidan Fortune, so that means thinking big when it comes to stock
H2 ho, ho, ho
So you’ve stocked up on soft options ready for the rush, but don’t forget about water, which also sees a rise in demand over the festive period.
“Christmas is a key opportunity for retailers to tap into the increased demand in the category and boost sales,” says Highland Spring head of brand marketing Paul Condron. “Following a strong performance this summer we are expecting to see continued uplift over the festive season as consumers purchase sparkling water to serve when entertaining as an alternative to alcohol and a healthier option than carbonated soft drinks.”
Condron also advises retailers to stock larger formats of water. “Bigger pack sizes tend to be more popular with consumers who are catering for larger groups of family and friends during the party season, and stocking a strong range of larger SKUs will maximise sales,” he adds.
“Bottled water provides an additional sales opportunity. Retailers should encourage ‘spacing’ the consumption of water in between alcoholic drinks by merchandising water alongside alcohol and briefing staff to up-sell to customers purchasing alcoholic drinks.”
He also says that stocking plenty of soft drinks and bottled water encourages responsibility. “The UK is known for its drinking culture and Christmas in particular is a time of overindulgence,” says Condon. “While alcohol sales are a key source of revenue for retailers over the festive season, they can still be active in promoting responsible drinking.”
Christmas is a time for festivities and family gatherings, and if your customers are having guests over especially at short notice they’ll need some refreshments of the non-alcoholic kind. Last Christmas purse-strings were tightened and this year looks like being no different, so how did this affect sales of soft drinks?
“Despite the challenging economic climate, Christmas 2009 was a great season with total retail till growth up 5.1% in the month leading up to Christmas (Nielsen),” says Coca-Cola Enterprises trade communications manager Selena Taylor. “Soft drinks grew by more than 4% in volume, driven by shoppers buying more per trip, and cola was the fastest growing soft drinks sector at Christmas in value, driven by existing shoppers up-weighting their purchase.”
The figures are strong, but how can retailers ensure it’s their tills feeling the fizz and not those of the supermarket up the road? Halewood International head of innovation Richard Clark believes that starting early is what counts when it comes to reaping rewards from the festive season. “The Christmas party season now tends to start in November, particularly with work and corporate evenings, therefore retailers need to be prepared,” he says. “Consumers are also now starting to plan ahead and buy products in stages rather than all in one go due to the current economic climate. Retailers need to have the right brands in the run up to Christmas and beyond, to cater for impulse buys and consequently ongoing soft drink purchases.”
Britvic marketing controller Murray Harris says that retailers should be ready for a demand in take-home products, and not just in the carbonate sub-category. “As Christmas typically means getting together with your nearest and dearest, sharing formats are big sellers,” says Harris. “Two-litre bottles of the best-selling carbonates are must-stocks for any independent retailer, and the main key soft drink sectors at Christmas are cola, lemonade, mixers, stimulant and squash. With the exception of sports drinks, sales for all major sub-categories in impulse become more dependent on bigger pack sizes at Christmastime, so retailers should be well stocked to ensure their customers don’t go elsewhere.”
AG Barr’s Mark Jephcott agrees and advises retailers not to neglect larger sizes. “Some 30% of all soft drink sales within impulse-led outlets are driven by take-home packs,” says Jephcott. “At Christmas, this increases to 34%. Impulse or ‘drink-now’ products also experience a slight increase, but soft drinks sales at Christmas are predominantly driven by shoppers stocking up on their favourite brands and for party occasions. Key carbonate and ‘alcohol replacement’ brands are the ones to benefit.”
Halewood head of innovation Richard Clark points out that the take-home market has recently benefited from more men not wanting to drink alcohol. “There are a growing number of men who want to enjoy ‘at home’ sociable events such as Christmas parties with friends, but do not always want to drink alcohol, or can’t due to having to drive.
“This combined with extra enforcement at Christmas and the possibility of further reductions in the drink drive limit in the future, means that there is greater demand for soft drinks.”
Clark believes that soft drinks for men, especially in the take-home market, is an area of big opportunity for manufacturers and for c-store retailers. “We’ve undertaken a considerable amount of research and have identified that men in particular are demanding a greater choice of soft drinks in the take-home channel. A growing number of men no longer drink alcohol, either for health reasons or changes in their lifestyle, yet the choice they are offered is very limited. We are looking to change this and provide a product to retailers that will offer real choice to consumers.”
While Halewood products are mostly targeted at men, women have needs, too. Shloer marketing communications controller Amanda Grabham says that the final two weeks before Christmas prove a key selling period for the brand. “While we always see big uplifts in sales at Christmas, last December the weekly rates of sale went through the roof,” she says. “In the two weeks before Christmas, Shloer was selling eight times the average weekly volume sales it achieved during the rest of the year double the uplift of its nearest competitor.
“To put this in context, the average rate of sale over the course of the year is just over seven bottles a week per store, but in the two weeks before Christmas this increased to 36-plus bottles per week, and we even had some stores in the convenience sector, generating sales of up to 150 bottles a week during last December.”
Shloer extended its range last winter with a rosé variant. “Last year the launch of Shloer Rosé made a significant contribution to the uplift in Christmas sales,” she says. “In the eight weeks leading up to Christmas the new line sold more than 750,000 bottles. By the end of December, Shloer Rosé had been catapulted into the fifth best-selling line in the table-top adult soft drink category, and the real plus point is that seven out of every 10 bottles of Shloer Rosé sold were incremental sales for Shloer and the category, indicating that Shloer Rosé attracted new consumers rather than cannibalised existing sales.”
So the future looks rosy for party-time soft drinks, but what about energy drinks? Red Bull trade communications manager Tom Smith says that retailers shouldn’t overlook sports and energy drinks in the build-up to Christmas. “In December last year more than 35 million cans of Red Bull were sold, making it the biggest Christmas yet for the brand in the UK,” he says.
“We sell a lot more 1.5ltr and 2ltr sizes of soft drinks in the run-up to Christmas. “We haven’t started preparing our soft drinks display just yet, but in the coming weeks we’ll start ordering more larger sizes and more mixers for the store.
“We’ll also sell more multipacks of drinks, especially colas. It’s often the case that people will come in at the last minute, having forgotten to buy their soft drinks when they do their big shop for Christmas, and only remember when they have people coming round.” Mohammed Saddiq, Eurofoods, Armley, Leeds
Smith explains the popularity of energy drinks around the festive season: “Christmas is a very busy and stressful time for many people. With parties to attend, presents to buy and long family car journeys to survive, consumers are looking for convenient and functional products to help them get through the day, which Red Bull perfectly suits.
“There is also a big take-home opportunity as consumers look for products which will get them through the festive season. The Red Bull four-pack, for example, is always a popular choice at Christmas and provides a good opportunity to trade consumers up, which will drive value sales.”
Smith encourages retailers to consider secondary sitings of sports and energy drinks during the party season. “Think about vodka sales at Christmas, too,” he adds. “It’s the biggest selling spirit during the festive season and Red Bull is a popular choice as a mixer as consumers look to brands which sit well with a fun night in or a warm up to going out. Consider dual siting near spirits to maximise the opportunity,” he advises.
When looking to impress friends and family, it appears that consumers are opting for big-name brands, despite talk of financial doom and gloom. “Best-sellers are very important at this time of the year,” says Harris. “Pepsi regular 2ltr continues to be a must-stock, and Robinsons squash also proves popular at Christmas as consumers switch to the leading brand to impress friends and family over the busy festive period.
“Soft drinks are an essential part of almost every social occasion, and because they are seen as a relatively inexpensive choice when compared with going out for the night, consumers are more likely to trade up,” adds Harris. “Retailers should look to take advantage of this opportunity and make sure they are stocked up on more premium options such as J20 to generate incremental sales.”
He adds: “In a recession, you might think that consumers would trade down from premium to value lines, but in the soft drinks market this hasn’t really happened. Staple soft drinks categories that offer enjoyment with value and quality, such as cola, juice drinks and squash, have held up well, with consumers looking to ranges they recognise and trust.
“Retailers should therefore continue to stock the most popular and recognisable lines, along with new products to offer customers something different.”
While the soft drinks market is holding its own in terms of sales, npd has been somewhat thin on the ground and there hasn’t been a game-changer with the same impact as the launch of the energy shot in the UK in 2009. However, Halewood head of innovation Richard Clark believes that this is set to change.
“There’s been very little innovation in the market, but I can see that changing as consumers start demanding new flavours and blends,” he says. Halewood made headlines with several launches that blurred the lines between alcohol and soft drinks, especially with its Iron Press range of barley and malt-based drinks targeted at males.
Clark encourages retailers to support innovation. “Retailers should do their best to support new products on the market,” he adds. “Obviously, the core brands should be retained and focused on, but there are incremental sales opportunities with new products and they should be displayed alongside the primary range, even on a trial basis.”
Rubicon head of marketing Adrian Troy attributed the lack of innovation to financial worries. “Businesses were being cautious because they felt that the middle of a recession wasn’t a great time to try something different,” he says. But he expects this to change quite soon. “Crossovers and innovation are important as they help drive the market forward by creating interest and offering the public more options.”
Taylor also believes that big-name brands fare well in the run-up to Christmas. “Last year Coca-Cola and Schweppes created a £118m opportunity for retailers over the Christmas season,” she says. “This year’s marketing campaign with increased investment and exciting new promotions offers a real opportunity for retailers to increase shoppers’ basket spend with premium trusted brands such as Coca-Cola, Schweppes and the Appletiser family.”
Even if more people at Christmas parties won’t be drinking alcohol this year, your customers will still need mixers. Taylor says that the two months before Christmas are a key period for the sub-category. “In 2009 mixers gained a 38% uplift over the eight weeks up to Christmas, representing a £23.1m opportunity, with Schweppes accounting for 54% of this,” she says. “Lemonade also showed a significant 17% uplift over the same period, representing a £24.1m opportunity, and Schweppes accounted for 49% of this.”
While manufacturers have faith that consumers will gravitate towards big-name brands during the festive season, they are still rolling out promotions in the hope of generating more sales. Coca-Cola Enterprises is leading the way with several offers on its various major soft drinks brands.
Coca-Cola is giving away an X-Box 360 with Kinect sensor and adventure game every hour throughout November and December. Available on 500ml and 2ltr packs of Coke, diet Coke and Coke Zero, consumers can win by either texting or entering the on-pack unique code online at www.cokezone.co.uk. Two-litre bottles of Coke, diet Coke and Coke Zero will also receive a festive makeover to give them greater standout on shelf, with Father Christmas making an appearance on packs of Coke.
To support the campaign, two x 2ltr bottles of Coke for £2.50 pricemarked packs will be available.
Appletiser will be driving growth in the adult soft drinks sub-category this winter with a ‘claim a free bottle of Appletiser with every two bottles purchased’ on-pack promotion. The giveaway runs from now until January 2011 on 2.2 million 750ml bottles. Consumers simply enter two unique codes online to claim their free bottle of Appletiser, which will also give them an opportunity to claim additional items such as fruit trees and cookware.
Elsewhere in the adult soft drinks market, Shloer is being supported with a wide range of tailormade activity ranging from pricemarked packs to ‘2 for’ multi-buy deals for symbol group retail clubs. A seasonal e-newsletter is also being sent out to 31,000 consumers directing them to the Shloer website for the chance to win festive-themed prizes.
AG Barr will feature a number of festive promotions including twin 2ltr Barr Cola or 2ltr Barr Lemonade in pricemarked packs. Its Rockstar range will feature a text-to-win on-pack offer with the first prize of a VIP trip for four people to the O2 Arena in Prague to see a top gig. The brand will also partner the UK Rock Tour ‘The Taste of Chaos’, which will reach two million of its target audience.
Ones to watch…
Halewood International has launched a new premium ginger beer as a non-alcoholic alternative to its successful alcoholic Crabbies product. John Crabbie’s Cloudy Ginger Beer is available in single 700ml bottles as well as a 330ml four-pack size. rrp: 700ml £2.49; 330ml four-pack £4.49 tel: 0845 6000 666
Irn-Bru’s 50% extra deal is making a return. Featuring nine x 330ml cans for the price of six, the offer will be heavily promoted in the independent retail channel. The Irn-Bru ‘Snowman’ advert will also return to TV screens for the fifth year in a row, with the Snowman also appearing on special promotional packs. tel: 01236 852 400
Touch of sparkle Schweppes has invested £1m in its ‘Make it a sparkling Christmas’ promotion for the festive season this year. The campaign includes themed in-store displays and pos material for retailers, and highly visible outdoor posters. It is hoped the campaign will recruit new customers during this key mixer sales period. tel: 0845 7227 111
Fit for a prince
Princes Soft Drinks has released a selection of traditional-style carbonate drinks. The Barracloughs range is available in four flavours: dandelion & burdock; ginger beer; cloudy lemonade; and cream soda. The range comes in 2ltr take-home size PET bottles and have retro label designs to appeal to traditionalists. tel: 0151 236 9282
Evoid has added to its range of schools-compliant still soft drinks. New flavour Evoid Cherry contains no additives or sugar, and is made from cherry, grape and lemon juices along with natural flavourings and natural colours. It joins Evoid’s other flavoured fruit drinks incuding cola, mixed berry and lemon. tel: 01625 872 304 1