Manufacturers are confident of sparkling soft drinks sales for the year ahead and are backing their brands to the hilt, explains Robin Mannering
The downturn has done nothing to diminish the sparkle of the carbonates market, with cola still bubbling away as the biggest selling sub-category in impulse, with a 26.4% share of the impulse take-home market, up 4% on 2009, according to the Britvic Soft Drinks Report.
Fruit carbonates were also fizzing, growing a healthy 8.9% in market share and 6.2% in volume. The sub-category was dominated by the four top brands Fanta, Dr Pepper, Sprite and 7UP which contributed 47% of the value growth. But Shloer and Vimto also did well, growing at 17% and 23% respectively (Britvic Soft Drinks Report).
Retailer’s view
“People are buying a lot more water products and their derivatives, but not to the detriment of carbonates. I see it almost as a new business! I’m not sure of the reasons behind this trend, maybe it’s a health kick. There is a real demand for more expensive ones, too. It is bizarre given the hard times we’re experiencing.
“We’re making sure we’re reacting to sales trends. We have five times the number of lines we had 18 months ago as the market has expanded so much.
“Energy drinks are still popular and we’re expecting a big push on these over the summer.” Chris Mitchener, Swan Street Stores, Kingsclere, Hampshire
Vimto Soft Drinks head of marketing Neil Gibson is upbeat about the year ahead. “The recession has helped the carbonates market because carbonates are seen as a treat for people who are eating out less, so the take-home sector is doing particularly well.”
He also attributes the success of carbonates to teenagers who, in spite of the recession, “still have pocket money and they’re not changing their spending habits”. Gibson advises retailers to engage in the teenage market. “Look at how you merchandise your store keep kids’ stuff close together as a high proportion of youngsters will spend on soft drinks and confectionery,” he says.
Pack innovation is also driving sales. The 600ml PET bottle introduced across Britvic’s no- and low-sugar portfolio for Pepsi, 7UP and Tango helped fuel growth, particularly for Pepsi Max. Within five months of launch, the innovation had added £9.8m to the on-the-go carbonates sub-category and helped reverse an -8.7% annual decline to increase growth levels to 3.8% (Nielsen Scantrack Total Impulse August 28,2010).
The portfolio of brands saw sales increases ranging from 25-45%. Pepsi Max also benefited from the Reward Your Thirst promotion on all 440ml, 500ml and 600ml PET formats.
Vimto’s Gibson says the new-look 500ml Vimto Still, launched in January, is anecdotally selling about twice as much as the previous product. With curved contours for easy grip and a sports cap, the product is aimed at teens on the go. “This year we’re continuing with promotions and we’ve re-done the packaging which is stronger than before,” he says.
Cherry Vimto will be advertised on TV for the first time this year, while Vimto will also relaunch its Seriously Mixed Up Fruit marketing campaign, which targets the teen market. Gibson explains that brands will gain added recognition from investment during a recession. “More companies are cutting back on advertising expenditure so it’s not only cheaper to advertise, but it gives us a higher share of the voice. Also, more people are seeing the ads because of the switch from people eating out to staying home in the evenings.”
Get in character
UK manufacturer Silver Spring is targeting parents of young children with its new bottled water brand. Responding to research showing that only 6% of children drink their recommended daily allowance of water, Silver Spring has teamed up with HIT Entertainment to launch a spring water especially designed for children. The small 300ml bottles are designed for small hands and feature the famous HIT characters of Angelina Ballerina, Fireman Sam and Bob the Builder.
Describing the launch of HIT British Spring Water as the first of its kind, Silver Spring says the product will stand out among all the sugary children’s drinks currently on the market. “There are other small bottled waters out there, but never before has the packaging been so directly marketed at appealing to children,” a spokeswoman says.
The 300ml bottles will make it easy for parents to work out if their child has consumed their recommended daily intake of 1.2 litres of water.
In terms of the content, the product is “nothing but pure spring water from the North Downs of Kent” but with the added excitement of a fun and familiar character.
HIT children’s spring water is available to buy through Musgrave and Booker from May 2011. Rrp is 49p per individual bottle, or £2.49 for a pack of six.
Vimto has increased advertising expenditure by 20% over the past three years, he adds.
Aiming at a grown-up audience, Shloer will this year be supporting convenience stores by providing range and merchandising advice and free pos material. It is also running a £16m support campaign up by a third on last year’s spend including high-profile TV and press advertising. It has recently launched a Facebook application featuring the Shloer Sunday Cookbook competition, and will be reaching key audiences through targeted sponsorships. This year the brand is the official drinks sponsor of the 2011 Asian Bride Shows.
Shloer attributes much of its recent success to advertising, particularly its Best Served Shared campaign in 2009, which preceded sales growth of 14% over the past 12 months (Nielsen Scantrack February 19, 2011). It also points to the continued success of Shloer Red Grape and Shloer White Grape, and Shloer Rosé, which was launched two years ago.
Retailers looking to link soft drinks with alcohol will welcome CCE and Diageo GB’s £2.5m investment to support their long-term joint initiative to drive spirit and mixer sales. This year’s campaign, Taste a Better Summer, aims to help grow basket value spend by encouraging consumers to purchase both the spirit and the mixers needed for a long mixed spirit drink. Radio, outdoor and print ads were launched in April, and pos will be placed in stores throughout the summer.
The activity for convenience stores will span Gordon’s and Schweppes Tonic, Pimm’s and Schweppes Lemonade, Smirnoff and Schweppes Lemonade, Smirnoff and Coca-Cola and Bell’s and Coca-Cola. CCE says the campaign last year shifted spirit and mixer category consideration by 8% to 84%, bringing it in line with beer and wine (Nielsen 15 weeks to August 7, 2010). There was also a 12% increase in Diageo spirits baskets containing a CCE mixer, and a 25% increase in CCE mixer baskets containing a Diageo spirit.
On a final note, Gibson has high hopes for the ginger beer market, which grew by 14% last year, and the Caribbean market mango, passion fruit and tropical flavours which saw triple-digit growth last year (Nielsen Total Coverage Soft Drinks Context Report MAT February 19, 2011).
Sales of water and functional water products grew by about 5% in the take-home market last year, although the water category saw a 2.8% decline in the independents sector by end of last year (Nielsen).
However, indies say they have seen a resurgence in the category over the past few months. Hampshire retailer Chris Mitchener of Swan Street Stores likened a surge in sales of water products to having a new business.
In the plain still water sub-category, which makes up 68% of the total bottled water category, Nestlé’s Pure Life saw a 99% surge in value in take-home last year, while Buxton grew by 28% (Britvic Soft Drinks Report) and remains the number one British natural mineral water with a 9.5% share of the market (Symphony IRI).
Retailer’s view
“I know soft drinks always perform well for us, especially in the summer as all our soft drink section is chilled, including take-home bottles. Since the economic downturn our Heritage brand of soft drinks and energy drinks is performing well.
“All promotional soft drinks always sell well. Trends seem to be directed more towards promotional drinks recently we had Coke 1.25ltr buy 1 get 2 free through Nisa and the uplift in sales was incredible a 1,200% volume increase during the three-week promotional period. Our strategy for the year is to have good promotions to lift volume and increase margins.” Saqib Ghafoor, Nisa Gateshead, Tyne & Wear
Nestlé Water says British-sourced bottled water brands have been leading the category growth, with people’s thirst for local brands and produce unquenched. Consumers are choosing to go local for economic, environmental and freshness reasons, it adds. CCE wholesale trade manager Darren Goldney agrees that UK bottled water brands have “resonated” and the category is thriving after a couple of years languishing.
Princes Soft Drinks marketing director Graham Breed says that the increasing popularity of British bottled water brands is “perhaps due to consumer concerns over road miles, or a desire to shop locally”. He adds: “The strength of British bottled water suggests that consumers are becoming increasingly aware of the provenance of products and are making a conscious effort to purchase products from the UK.”
Princes relaunched Aqua Pura last year to focus on its Cumbrian heritage and the message seems to have struck a chord with consumers, says Breed. Year on year Aqua Pura is one of the UK’s fastest growing water brands by volume (Nielsen MAT). He attributes the overall growth of bottled water to the category’s “perceived health benefits”.
Manufacturers are focusing on sport to drive their products this summer. CCE has high hopes for its Schweppes Abbey Well natural mineral water, which is an official water of the 2012 Olympics and the fastest growing instant consumption still water brand in independents (Nielsen Total Coverage MAT February 12, 2011).
Functional water grew by 28% in value last year (Britvic Soft Drinks Report), with Glaceau Vitamin Water and This Water contributing 88% to the growth of water-plus. V Water sales also increased by 152% to £2m in value.
Britvic shopper planning manager Helen Bennie says the growth of water-plus is down to consumers’ higher expectations from water products. “Shoppers are coming out of the recession so can afford flavoured waters, but they also know they are cheaper than juices and have less sugar content so the decision is also health-driven,” she says.
Campaigns
Copella has teamed up with renowned conservationist Dr David Bellamy and The National Trust to raise awareness of the plight of English apples.
The Plant & Protect campaign is encouraging consumers to support the brand in its mission to preserve rare apple varieties that are in decline and to plant 25,000 apple trees across England in partnership with The National Trust over the next two years. Sampling and experimental activity will be included throughout the campaign.
Copella marketing manager Adrian Baty says: “We want to raise awareness of the broad variety of English apples available and get consumers to share in our passion to preserve rare varieties for future generations by signing up to Plant & Protect.”
A national on-pack promotion encourages consumers to pledge their support by signing up to Plant & Protect via Copella’s website, where they can also purchase an apple tree to plant.
Dr David Bellamy said: “More than 50% of English orchards have disappeared in the past 50 years and it is about time we did something to protect the delicious varieties of English apples, which are a vital part of our agricultural heritage.”
Giles Brook, chief executive of Vita Coco Europe, says people want to be hydrated “but are looking for a bit more than just water”, or they want something nutritious but don’t want the sugar or calories associated with traditional juice drinks. “Furthermore, they may want to feel energised and they’re looking for functional benefits but not through artificial ways, as with most energy drinks,” he adds.
CCE’s Goldney says people are prepared to spend more money if they are offered hydration and vitamins. He says distribution of Glaceau Vitamin Water across independents increased by 66% in 2010 compared with the previous year, demonstrating that retailers are grasping the value of the product since its UK launch three years ago. A new strawberry and kiwi-flavour variant, i-focus (500ml), was launched last year and is already available in 80% of Glacéau-listed independent outlets. CCE will focus on its ‘know it, try it, love it’ campaign over 2011, with heavyweight advertising throughout the summer.
Volvic launched a new limited-edition summer fruits flavour within the Touch of Fruit range earlier this month, following last year’s Touch of Fruit blackcurrant flavour, which brought new shoppers into the category. Touch of Fruit is also launching a new sports cap format for strawberry and lemon lime original variants.
Vita Coco says the natural hydration and nutritional properties of its coconut water brand has won it a loyal following among celebrities and health experts. Sales of Vita Coco coconut water grew by 1,229% and UK sales hit £4m last year, Brook says, while the coconut water category is expected to grow to £100m in the next five years, establishing it as the “next big category to drive overall soft drinks sales,” he adds.
Research shows 50% of all adults have drunk flavoured milk over the past year (Drummond Maddell Study 2010), as consumers become increasingly aware of health issues. Yazoo is targeting the adult audience through its partnership with men’s magazine Loaded and an on-pack cinema tickets deal.
The future is clear
Abbey Well’s ‘Schwim free’ promotion is continuing throughout 2011 in the build up to the Olympics.
The campaign offers consumers one free swim with every bottle cap they take into participating pools around the country. In 2010 more than 59,000 redemptions were registered for the free swim, up 25% on the previous year, and this year more pools are signed up to the scheme. The promotion is being backed by a £1m marketing campaign.
England cricket star Alastair Cook, meanwhile, will be the face of Buxton Natural Mineral Water when a two-year partnership kicks off in the summer. Nestlé Waters head of marketing Rebecca White says: “We are convinced that the partnership with Alastair will add a fresh spirit to the brand.”
The good news for independent retailers, says Princes Soft Drinks Graham Breed, is that the growth of bottle water is mainly driven by smaller, on-the-go pack sizes.
Nestlé Waters advises convenience retailers to dedicate 75% of their bottle water range to small bottles 50cl and 75cl and a choice of flat and sports caps in the chiller. The remaining 25% should be given to larger 1.5ltr or 2ltr bottles plus multipacks in the ambient aisle.
It is also worth extending space devoted to water during the summer months. According to Danone research, sales of bottled water increase nearly twice as much as other soft drinks when the temperature rises.
It has also extended its Rugby Football Union/Yazoo primary school programme for a further two years. The programme aims to improve the health of school-children through more than 25,000 tag rugby sessions over the year.
The first organic flavoured milk in the UK, Daioni, tastes best straight from the fridge, although it has a long shelf life so doesn’t have to be chilled, making it convenient for retailers to store and enabling consumers to keep it with them when they’re on the move. Parent company Trioni is looking into producing Daioni in smaller 200ml cartons it is currently in a 250ml carton and is in the process of revitalising its pos for retailers.
The chilled juice category saw 7.2% growth last year (Nielsen 52 weeks ending February 5, 2011), driven by increasing consumer demand for not from concentrate (NFC) and healthier options, with Tropicana leading the market with a 28.4% share. Tropicana is working in partnership with retailers to deliver special offers, reward schemes and on-pack promotions. Its latest ‘Daily Ray of Sunshine’ campaign includes an on-pack promotion with Virgin Experience days across its entire single-serve 330ml range.
Meanwhile, the top-performing sub-category last year was Cold Hot Drinks, which grew 93% in value to £14.9m reversing an 8% decline in 2009. The growth was partly driven by Lipton Ice Tea, which soared by 102% in value.
Britvic’s Bennie predicts a hot future for the sub-category: “Cold hot drinks are seen as a treat a luxurious alternative to water particularly in the summer. They are huge on the continent so the trend may be catching on.”
Ones to watch…
Kiss and sell
Diet Coke has launched a new look for spring/summer with a ‘kiss’ packaging design and on-pack promotion with fashion website ASOS. The 330ml, 500ml and 2ltr packs of Diet Coke feature a unique on-pack code which consumers can use to access vouchers to spend at the online store, or £5 off their next ASOS purchase of £20 or more.
tel: 0845 7227222
Pure and simple
Tropicana has launched the chilled fruit juice category’s first range of still lemonades to be made from 100% natural juice. With no added sugar or water, the drinks provide consumers with one of their five-a-day. Tropicana Pure Premium Lemonades come in traditional and pink lemonade styles.
rrp: £2.20 for 900ml; £1.17 for 300ml
tel: 0800 980 8253
Oasis comeback
Coca-Cola Enterprises has reinvigorated its Oasis range with the return of its blackcurrant apple variant and new packaging. The brand will be supported by a marketing campaign under the banner, ‘It’ll go with anything,’ including TV, outdoor advertising and digital. The new-look bottle will be available to independents with a 99p pricemark on 500ml.
tel: 08457 227222
Get with the beat
Lucozade Sport’s new ‘Yes’ advertising campaign stars award-winning rapper Tinie Tempah, drummer Travis Barker and Irish world champion boxer Katie Taylor. The activity, which sees Lucozade bring music and sport together in its advertising for the first time, features across TV, cinema and digital channels. The campaign will run throughout the year.
tel: 08702 415132
Indian influence
Made With Joy has introduced Indian lassi yogurt drink to the UK market, positioning it as the drink of choice for consumers looking for a healthier on-the-go product. Lassi is a yogurt drink based on the ancient Indian science of Ayurveda. It comes in three flavours: mango; strawberry & holy basil; and cardamom & rose.
rrp: £1.89
tel: 020 7388 4515
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