Christmas gives shoppers the perfect reason to party so expect soft drinks sales to bubble over as all thoughts of economic gloom are put on hold
The season of good cheer for soft drinks is returning, and not a moment too soon for independents across the UK. Last Christmas - which was also mired in economic gloom - soft drinks were worth £626m, up 5.75% in value on 2009 as total grocery sales grew 5.09% (KWP RST eight weeks to December 26, 2010).
“Sales of soft drinks soar at Christmas,” confirms Amanda Grabham, head of brand marketing for Shloer. “Some 17% - or £20.5m- worth - of all adult soft drinks sold last year were purchased in December.”
That’s how much soft drinks grew in value last Christmas, despite a flagging economy
The growth was driven by carbonates last season, with cola, lemonade, mixers and adult special sectors leading the way, says Selena Taylor of Coca-Cola Enterprises (CCE). Lemonade and cola saw sales growth of 59% and 29% respectively (Nielsen), with sales of top performer Coca-Cola up 9% over Christmas (Kantar Worldpanel).
Britvic points out that consumers haven’t traded down from premium to value lines in spite of the flagging economy, and it urges retailers to continue to stock the most popular and recognisable lines. “Consumers don’t want to disappoint their guests and are more likely to buy the brands that they know and trust, such as Robinsons and Pepsi Max, to ensure they enjoy themselves over the festive period and are a good host.”
AG Barr agrees that well-known brands are “absolutely key” over Christmas as shoppers want to share the best quality at home for family gatherings and parties. It adds that family favourites such as Irn-Bru have a Christmas uplift of about 44%, while adult soft drink staple Shloer saw a 54% rise in sales to seven million bottles in the four weeks to December 25 (Nielsen).
Independents have another reason to look forward to Christmas - the weather. “Roll on the snow when locals can’t get to the supermarket,” says Hampshire retailer Chris Mitchener of Swan Street Stores, Kingsclere. “Sales of energy drinks and large bottles of still water increase, as well as cordials such as Ribena which can be drunk hot for comfort.”
“Soft drinks is my biggest single category, amounting to about 13% of my total turnover. It’s therefore extremely important that the sector performs well over Christmas. My expectations will be focused on a strong promotional package of branded 2ltr carbonates - in particular Coca-Cola, Irn Bru and Schweppes Lemonade.
“I’d like to see extra-free packs of six-pack canned carbonates similar to Irn Bru’s last year when it featured a nine for six pack on 330ml cans.
“Although impulse is important, the emphasis must be on take-home. However, I’ve been amazed by the recent growth of energy drinks and expect them to feature strongly. My range includes Red Bull, Relentless, Monster, Mountain Dew, Rock Star and my best-seller, Euroshopper 250ml, which has recently been joined by a 500ml size. A lot of my Euroshopper Energy Drink 1ltr size is now bought as a mixer for spirits, like a tonic with gin.
“All impulse energy drinks will sell well over Christmas when added energy is required!”
John Cuthbertson, Premier @ The Union, Dundee
Christmas is typically a communal experience, and that means sharing formats typically perform strongly. As such, 2ltr bottles of the best-selling carbonates are must-stocks for independent retailers, says Britvic. With the exception of sports drinks, sales for all major sub-categories in impulse become more dependent on bigger pack sizes at Christmas-time, it adds.
Scottish retailer John Cuthbertson of Premier @ The Union in Dundee says he will focus on take-home over Christmas, and he is hoping for a strong promotional package of branded 2ltrs carbonates, in particular Coca-Cola, Irn-Bru and Schweppes Lemonade. “I would also like to see extra-free packs of six-pack canned carbonates similar to last year when Irn-Bru featured a nine for six pack on 330ml,” he adds.
He’s in luck as Irn-Bru is featuring several new promotional packs this Christmas, including a 99p 1ltr pack and 330ml six-pack for £1.99, while the 2ltr pack will be priced at £1.29. Elsewhere in AG Barr’s stock, Rubicon has a two for £2 promotion on leading flavours of 1ltr packs such as mango and guava, and Barr Cola and Lemonade are new to the market with 2ltr pricemarked festive packs for 79p.
Vimto Soft Drinks says its 2ltr SKUs of Vimto, Sunkist and Levi Roots are ideal to cater for family gatherings and parties, and can be used as mixers. Vimto cordial, meanwhile, is a versatile product to stock as it can go further than pre-mixed RTDs and offers a more cost-effective solution than alternatives, according to brand manager Emma Hunt. “As more adults are socialising at home, the cordial can also be a great tasting addition to a punch or cocktails for parties,” she adds.
The Mintel Oxygen Report indicates that adults are increasingly keen to look after their health and are happier to pay more for quality, Shloer points out. This has led to an increase in demand for a more sophisticated alternative to alcohol and a more natural alternative to carbonated soft drinks, the report says. This is evident at Christmas, which is the biggest sales period of the year for adult special soft drinks, generating more than 28% of annual category sales, says Bruce Scott, cross-franchise controller at CCE.
Shloer has a new limited-edition variant, Shloer Berry Punch, for the Christmas festivities. It’s being marketed as an alternative to alcohol and an appealing drink in its own right. Packaged in 75cl bottles, Shloer Berry Punch will have the same £2.29 rrp as other Shloer variants, and is available in cases of six x 75cl bottles.
Soft drinks producers are warming up for the Christmas rush with products that are designed to be served hot.
Bottlegreen Drinks Co is re-introducing its Enjoy Hot concept to help maximise soft drinks sales over winter, while PepsiCo apple juice brand Copella has launched Winter Warmer, which contains spices such as clove, cinnamon and nutmeg.
Bottlegreen points out that the cordial category is worth some £500m, but only about 22% of sales are generated in the winter months, suggesting that cordial is not fully capitalised on all the year round. The Enjoy Hot concept aims to change this by driving sales during the traditionally quieter winter period. Under the initiative, the Bottlegreen cordial range will once again feature Enjoy Hot messaging, encouraging consumers to mix the drink with hot water to create an alternative to caffeine- or alcohol-based hot drinks.
Bottlegreen Drinks Co managing director Simon Speers says: “While the cordial sector remains strong, we feel that during the winter months there is an opportunity to provide consumers with an alternative drinking solution and attract a different type of consumer to the category.”
The brand is offering a selection of autumn and winter flavours that can be enjoyed hot, including ginger & lemongrass, Cox’s apple & plum, lime, spiced berry and the brand’s signature flavour, elderflower.
The company has also invested in a print advertising campaign and PR activity in addition to a programme of sampling at a selection of major events to support the line.
The launch follows the introduction of Shloer Rosé in the lead up to Christmas 2009. “Over the past year sales of Shloer Rosé have increased by 62% and during November/December last year we sold 1.45 million bottles of Rosé - almost double the number of bottles sold in the same period in 2009,” Grabham says.
Britvic is introducing a ‘glitzy’ limited-edition J2O variant, J2O Glitter Berry, which mixes fruity flavours with a hint of spice and glittery finish to add some glamour to the adult soft drinks market. It is available in packs of four with an rrp of £3.67. The launch is being supported by a £2.5m TV and cinema marketing campaign.
Appletiser is offering consumers the chance to win dinner at Tiffany’s in New York with a new on-pack promotion. CCE’s Scott says: “In 2010, Appletiser attracted 600,000 new shoppers into the category in the eight weeks of Christmas (Kantar Worldpanel), meaning it is a must-stock for retailers looking to make the most of the Christmas occasion.”
CCE is urging retailers to prepare for opportunities throughout the season, from the lead-up in November to the celebrations in December. It says shoppers engage in two different phases: anticipation, which includes ‘planning, shopping and excitement’ and celebration, which includes ‘togetherness, indulgence and happiness’. “Families like to use the occasion to show off their favourite premium brands and treat themselves with life’s little indulgences - they look towards brands with heritage that they know and trust and perceive as special at this time of year,” says CCE’s Taylor.
In order to help retailers capitalise on the two phases of Christmas, CCE is offering advice through its Open More Business best practice guide. Open More Business recommends retailers stock products now to boost and maintain sales throughout the Christmas period, while encouraging occasional consumers with visibility of product displays early in the season to drive purchase. It also advises retailers to consider secondary siting when merchandising their stores in the lead up to Christmas, such as stocking Schweppes mixers alongside core spirit brands to encourage link purchase, or stocking Coca-Cola next to other products such as confectionery sharing tins and premium snacks.
“Winter sales of soft drinks fall by about 75% of summer warm weather sales. The only plus is sales of large lemonade, Coke and mixers, which increase over the Christmas period. Hurray for parties and unexpected visitors and relatives dropping in! Roll on the snow when locals can’t get to the supermarket, either. Sales of energy drinks and large bottles of still water increase, as well as cordials such as Ribena which can be drunk hot for comfort.”
Swan Street Stores, Kingsclere, Hampshire
Britvic also advises use of cross-category displays to educate consumers about different drinking occasions and encourage impulsive purchases. “This could be alongside food or alcoholic products to emphasise the Christmas social and mealtime relevance.”
CCE is focusing on its three biggest festive brands, with seasonal campaigns for Coca-Cola and Schweppes, in addition to Appletiser. CCE says Schweppes Mixers and Lemonade outperform the market in both sectors over Christmas (Nielsen), with 1.5 million shoppers preferring to buy only Schweppes over the festive period. This Christmas there will be special limited-edition packaging across a range of Schweppes SKUs, featuring a festive holly label and an eye-catching ribbon design with a ‘Mix in the Festive Spirit’ strapline.
Britvic is also urging retailers to keep stock chilled over Christmas, including 2ltr formats as they are often consumed soon after purchase. To maximise sales, chillers should be located in a high-traffic flow area, in sight of the till and the door, it adds. “Customers shopping at impulse retailers for Christmas products might be doing a last-minute convenience shop for the same night, so it’s important that you don’t miss this sales opportunity by not adequately chilling products,” says Kate Fletcher, Britvic business unit director, impulse.
Britvic research found that 53% of shoppers are willing to pay more for chilled soft drinks, while 92% of children look in the chiller when choosing a soft drink.
Sports and energy drinks are less seasonal than other soft drinks, says GSK, but they are becoming increasingly important over the Christmas period. Retailer John Cuthbertson says: “I have been amazed by the recent growth of energy drinks and again will expect them to feature strongly over the period. My range includes Red Bull, Relentless, Monster, Mountain Dew, Rock Star and my best-seller, Euroshopper Energy Drink 250ml.”
AG Barr attributes the demand to shoppers burning the candle at both ends as the party and shopping season exacerbates their already busy lifestyles. Red Bull says energy drinks are perfectly suited to Christmas, with busy consumers embarking on long family car journeys, partying hard, and rushing to finish their Christmas shopping.
● Stock up early in the season to avoid lost sales and encourage repeat purchases
● Focus on promotional activity throughout December to drive forward purchases
● Increase the shelf space available for bigger pack sizes
● Stock or increase the space for the key soft drinks sectors: cola, lemonade, mixers and squashes
● Capitalise on the demand for adult soft drinks over the party season
● Use cross-category displays to educate consumers about different drinking occasions and encourage impulse purchases.
Red Bull says it sold 34 million cans last December, as consumers turned to brands they recognised. This year it has the 330ml bottle, described as “perfect” for those on a long drive due to its resealable energy, while the four-pack is a popular take-home option.
Kick Energy advises retailers to place energy drinks with spirit brands to cater for the spirits and energy drinks mixing culture. “Bomb-style serves, such as Jungfrau herbal liqueur served with Kick Energy, are still growing in popularity in the on trade, and people are looking to recreate this at home with friends, so this has impacted favourably on off-trade energy drinks sales,” says Global Brands marketing director Simon Green. A gaming on-pack promotion is currently running to tie in with the new Batman Arkham City game, offering prizes of Ultimate Hero Gadget Packs.
Global Brands is also promoting special celebration drinks, such as the ‘glitterball’ - 25ml Goldschläger topped with Kick Energy. No Fear Extreme Energy can also be used in cocktails and as a mixer, asserts brand manager Neil Haworth. “Energy drinks are no longer simply functional, but are being used more and more as mixers in many different drinks to bring a new dimension to cocktails and punches, so they’re an ideal drink for independent retailers to stock at Christmas,” he adds. “No Fear Extreme Energy will stay fizzy for up to 24 hours, which means the drink can be sealed and placed back in the fridge ready for the next drinks round.”
For this year’s celebrations No Fear Extreme Energy Drinks has a new marketing initiative, the ‘Fearless Fred’ campaign, which rewards the winner of the national promotion with a once-in-a-lifetime trip to face their ultimate fear and win a £1,000 prize. It is being rolled out online and offline and backed by print and digital advertising.
AG Barr’s Rockstar, meanwhile, has added a number of new products. The raft of extras lines includes Rockstar Pink, which it says is the first energy drink to be targeted specifically at women.
Containing just 10 calories and served in a 335ml can, it is already proving popular with women who are seeking an energy boost but without the associated high sugar content of other drinks.
“We’re looking at improving the category management of all our chilled sections, including soft drinks, and are working with all the main manufacturers to do this.
“We’re focusing on big brands to drive soft drinks sales this Christmas, but we also have some local brands which always increase customer loyalty.
“Our secondary merchandising and hot spot units will focus on the main lines and any promotions to attract impulse sales and make it easy for consumers to shop.
“Features such as Big Night In and special seasonal areas also help to enhance impulse sales of the whole category.”
Kash Khera, SImply Fresh, Birmingham
GSK points out that sales of sports drinks peak at the beginning of the new year, as people make their New Year’s resolutions to get fit and spend more time in the gym. Retailers should therefore ensure they are well stocked up with the likes of Lucozade Sport and Lucozade Sport Lite as the new year begins, it says.
Finally, PepsiCo and Britvic have forged a unique partnership to encourage cross-purchases this Christmas. The Fire and Ice campaign combines spicy Jalapeno Fire-flavoured Doritos with lime-flavoured Pepsi Max Citrus Freeze. The initiative aims to address a trend that sees crisps and snacks consumed with soft drinks 57% of the time, yet bought together in only 13% of cases.
Adriana Ribeiro, marketing director, sharing, PepsiCo UK and Ireland, says: “By leveraging the high sales frequency of Pepsi Max with Doritos’ substantial household penetration, retailers can unleash the benefits of cross-merchandising these popular products.”
The Fire and Ice campaign, which is the first large-scale cross-promotion of its kind, includes an on-pack promotion across both products, offering consumers the chance to win a trip to hot Las Vegas or cool Ireland. Pos material and merchandising units, including a fiery three-case stacker, are also available.
Ones to watch…
Lucozade has introduced its first cola-flavoured variant to its Energy range. Lucozade Cola Energy will be available for a limited period, but will be rolled out permanently if successful. The distinctive black bottle is designed to create maximum standout and generate incremental sales for retailers.
tel: 08702 415132
Jewel of a prize
Appletiser is offering shoppers the chance to win dinner at Tiffany’s in New York with its latest on-pack promotion. The promotion runs until March 2012 across 275ml and 750ml bottles, as well as 330ml cans and 6x330ml can multipacks. The prize includes flights and accommodation for two and £1,000 to spend.
tel: 08457 227222
Packs a punch
Shloer has unveiled a limited-edition variant for the Christmas festivities.Shloer Berry Punch is recommended to be served over ice with autumnal fruits such as slices of pear and blackberries. It will have the same £2.29 rrp as the other six variants in the Shloer range and is available in cases of 6x75cl bottles.
tel: 0800 9173540
Limited-edition Christmas packaging featuring the iconic Santa imagery will be available this season across Coke, diet Coke and Coke Zero 2ltr bottles, 330ml cans and multipacks. Coca-Cola’s iconic fairy light-lit trucks will also be visiting towns and cities throughout November and December.
tel: 08457 227222