Report
New report reveals ‘credit crunch’ shopping trends
UK sales of soft drinks in 2008 defied the recession and another poor summer, according to the 2009 Britvic Soft Drinks Report published today.
UK sales totalled £8.4bn across all channels during the year, down just 1% in value and 2% in volume terms compared with the previous year’s strong performance. This robust performance comes as consumers turn towards brands they know and trust as economic conditions deteriorate.
Despite consumers planning their shopping more carefully, soft drinks are still considered a staple of the mid-sized shopping basket.
The consumer trends identified in last year’s report, such as the importance of health and well-being, indulgence, ethical and environmental concerns and convenience, are all still important to the consumer, but to a certain extent have been overshadowed by the challenging economic conditions.
In 2008, energy and sports drinks continued to drive the market as consumers sought specific functional benefits such as added vitamins, electrolytes, glucose or stimulants (including caffeine and guarana), while traditional favourites such as cola, squash and juice drinks proved to be resilient. Additionally, the big soft drinks brands held up well, as consumers opted for well-known and trusted names rather than switching to own-label products.
Commenting on the 2009 Soft Drinks Report, Paul Moody, Britvic chief executive and president of the British Soft Drinks Association, said: “Soft drinks continue to be a staple purchase on which consumers are reluctant to compromise. And as a soft drink is a small-ticket, cash item offering affordable everyday enjoyment, they have little reason to.
“In the downturn so far, it’s the big brands and traditionally popular subcategories like cola, squash and juice drinks that consumers seem particularly unwilling to do without. The soft drinks industry’s close understanding of consumer and shopper behaviour has enabled it to continue satisfying the huge diversity of consumer needs, whether for hydration, health, enjoyment, convenience, value or – particularly nowadays – all of those at once. With another tough year in prospect, the challenge for the industry is to keep delivering the combination of value and quality that consumers expect, and to stay alert to every shift in their daily purchasing decisions.”
Other key findings in the report …
- Consumers are reacting to the economic climate by increasingly looking out for promotional deals on the groceries they buy. However, with 61% of branded soft drinks sold on promotion, the price incentive for shoppers to trade down to own-label is small. Consumers are instead favouring brands they know and trust and that offer the quality they expect.
- Consumers are also attempting to rein in spend by cutting down on the large-size ‘monster’ shop, as well as the small basket ‘top-up’ shop, opting instead for better planned, mid-sized shopping trips.
- In the take-home market (supermarkets and convenience stores), sales were up 1% by value in 2008 to £6.1bn, despite a 2% volume decline.
- Successful brands included Tropicana and Pepsi, which both outperformed other top brands with double-digit growth. Robinsons also had a successful year, with sales up 6%, and increased its leadership of the squash subcategory.
- While energy and sports drinks saw the fastest growth, traditionally popular drinks such as cola, squash and juice drinks also performed well.
- The success of smoothies faltered after several years of strong growth, with sales down 20% by value and 15% by volume, as consumers were unwilling to pay a price premium for their ‘5 a day’. Sales of plain water were also hit by another poor summer combined with the economic climate, and suffered a 9% decline in value and an 8% drop in volume.
- Britvic outperformed the market with 8% growth in value during the year, compared to the market’s 1% rise. This was driven by strong performances from Pepsi, Robinsons and the newly launched sports drink Gatorade.
- Conditions were more challenging in the on-premise market (pubs, bars and restaurants), but soft drinks outperformed total alcoholic drinks with sales at £2.3bn, down 4% by value and 6% by volume.
- The soft drinks industry is expected to benefit from the continued shift towards pub visits becoming destination establishments with a greater family and food focus.
- Coca-Cola remained the top-selling brand in on-premise, followed closely by Pepsi-Cola, Britvic J2O, R Whites Lemonade and Schweppes Lemonade.
- J2O was a big success story in 2008 and overtook Magners to become the channel’s biggest-selling packaged drink.
- Fruit drinks and juice drinks performed relatively well, while cola and lemonade remained pub staples.
The full report is available online (with charts and data extracts).
Source: Britvic
See also
Latest news
| |