Getting customers to think differently about soft drinks is the key to tapping into the potential of the category, according to new research analysing the last decade of sales.

Speaking to Convenience Store, category controller at Suntory Beverage & Food GB&I (SBF) Claire Woolridge outlined the £1.2bn sales growth opportunity for soft drinks and how convenience stores can take advantage. This comes following research by the business into the category and how it has evolved over the past 10 years.

Suntory Beverage & Food GB&I category controller Claire Woolridge

Suntory Beverage & Food GB&I category controller Claire Woolridge

While one of the core categories in convenience, SBF’s research found that it has been maintaining a steady growth. “What we saw from the data is soft drinks becoming more and more important to retailers, and penetration over the last 10 years has increased by five percentage points,” explains Woolridge. “For a mature category that increase is quite significant.”

But just how big can soft drinks get? “We’ve seen as an opportunity to unlock £1.2bn of growth the next five years. Our category vision really focused the five key drivers of how we can unlock that growth with retailers and accelerate that even further.”

What are the five pillars?

Choose wellness: With 54% of the population saying they are focusing on their mental health, there is a £289m opportunity for retailers.

Recharge the moment: 75% of society say they are concerned about tiredness, creating £238m sales potential.

Elevate the experience: £186m can be made by getting the 30% of people who claim to be teetotal to buy into soft drinks for special moments and occasions.

Enjoy hydration: 66% of adults identify as physically active, creating a £203m opportunity if retailers can get shoppers to understand the functionality of sports drinks.

Enhance food moments: This could open up £263m over the next five years if retailers can get consumers to buy soft drinks for their evening meal.

Woolridge explains that the research has shown that there is a lot of room for growth within functional. “We see functional as a big opportunity to grow. 64% of non-users don’t actually see a need for them [functional drinks] and three-quarters of people say that while they’re concerned about tiredness, they’re also concerned about functional drinks not having the ‘right taste’. There’s a huge opportunity for us to tap into this sub-category but what is needed is a true category approach to build that trust with the right range.”

The functional category is also bigger with younger shoppers. “Seven out of ten are interested in functional drinks but that rises to eight in ten among 18-34 year-olds. Just over half of 18-34 year-olds are more likely to choose premium drinks when shopping so retailers need to capitalise on those trends.”

With all this focus on functional, it could be easy to overlook enjoyment within soft drinks however Woolridge says that is something being examined. “Practicality and health have gone up in terms of importance. Where we haven’t done as well is on the enjoyment side, we see it as a really big opportunity. Taste is number one as a decision factor so as a category we’ve got to redrive that as well as health.”

The research also found that men are buying soft drinks more often, and for the first time, are purchasing more than women. Woolridge says that this provides two opportunities. “Men are driving a lot of the growth and that comes back to the growth in the stimulation category. There’s not only an opportunity to drive the category further amongst men but also reengage with women. This is where the ‘choose wellness’ driver really plays into that female offering so retailers should make sure they have functional drinks catered for.”

The cost of living crisis is rarely far from the national headlines but that doesn’t mean that soft drinks category sales will falter. “There’s a continuation of a trend seen in Covid-19 and the cost of living crisis has entrenched this even more,” says Woolridge. “Take home drinks are growing and driving basket spend while the volume of drinks have gone up. When times are hard, value becomes very important and retailers need to make sure they have that large format and multipack offering to provide value to shoppers.”

One trend that usually occurs when there is an economic downturn is the smaller treat which Woolridge should help retailers. “People aren’t spending on those big ticket items anymore so smaller treats on a regular basis provide an opportunity for retailers which plays into elevating the experience advice.”

SBF is also looking at meal deal offerings beyond the traditional lunchtime and suggests that retailers need to think about what their customers need and cater to that. “We know that smaller independent stores don’t have the space to generate huge displays but they do know their customers very well so it’s understanding how what opportunities they have in their stores and what occasions they can tap into. They can walk the store like a shopper and try to buy an evening meal deal asking if can they find all of the elements easily? That’s something we can help retailers with.

“Our advice is about inspiring customers in store to consider an evening meal because it is an incremental purchase and drives basket spend.”

To help store owners implement this advice, SBF is to launch a series of trials with independent retailers. “We’re working with three independent retailers to really drive growth and help them and understand what it means to them and how we can help them unlock the growth based on these drivers. In January, we’ll start doing a six-week trial and then we should get data back by the end of Q1. It’s a really great opportunity to demonstrate actually what we’re doing and how it can drive growth with retailers.

While those trials get finalised, there is plenty that store owners can be doing now. “What retailers have got to get it right is making sure they have got the right range,” says Woolridge. “You can capture people who are a little bit tired and they might want to choose a wellness drink or someone who’s looking for a sporting activity and that falls under recharge the moment. It’s how retailers can unlock different occasions and therefore drive growth within them.

”If you haven’t got the right range, you can’t sell it so it’s about understanding your shopper, what they want and stocking that.”

Signposting the category is also vital. “Make it really easy for customers to buy. Think about what missions your shoppers are on, what occasions you can tap into. Look at take-home larger formats because that trend is here to stay. Review what is in that space and how you can drive awareness. Retailers need to ask themselves how can they really drive occasion and get customers to think differently when they’re in your stores. How can you interrupt their thinking and get them putting more items in their basket?”