Organised by Zenith International, held in London’s Congress Centre and sponsored by Sidel, the session opened with market intelligence director, Gary Roethenbaugh, presenting findings from the BSDA 2009 UK Soft Drinks Market Report.
Soft drinks volume sales increased from 10.7 billion litres in 1998 to 13.9 billion litres in 2008, adding 50 litres per person in consumption terms.
“Cola recovery is stabilising market momentum,” said Roethenbaugh, “with dilutables adding flavour to tap in an ever wider sector, ranging from value to indulgence. The consumer confidence index has seen a rise, with the summer predicted to be warmer and drier than in recent years. Temperatures between 18-21 degrees result in a 4% increase in sales, with temperatures from 21-24 degrees giving a 7% volume uplift for each degree. Consumers today are time-poor, love food and hate waste. This is an age of austerity, but price cutting can only go so far. Quoting from our last water conference: ‘Now is the time for brand owners to legitimise their existence. Trusted innovation is what counts’.”
Marketing director of Coca-Cola Great Britain and Ireland, Cathryn Sleight, commented on how consumers are tired of the daily diet of gloom in the media. Frugality may be the new frivolity, and today’s consumers are looking to friendships and personal contact for pleasure.
“Social networking is seeing massive growth, with strong influence of cyber-friends on purchasing choice. There will be 22 million people networking in this way by 2012. History shows that those who do best use a downturn to plan and invest for the future. We plan to deepen our dialogue with consumers through the connection platform ‘Let’s Get Together.
“One of our key brand strengths is optimism, hence the ‘Open Happiness’ advertising campaign. TV is still a great mass medium. We’re committed to sustainability through our partnership with the carbon trust and constantly look for smarter ways of working externally and internally. We operate in a fantastic market and we need to be ready for the upturn.”
Jonathan Kemp, commercial director of AG Barr, dispelled a few myths, including the fact that the business isn’t family run, nor is it solely Scottish. The company incorporates Irn-Bru, Vitsmart, Rockstar and Taut (among other brands) and is one of the most modern soft drinks companies in Europe. It also has the largest number of complaints for its advertising!
“Multi-buys pose the biggest threat to this business,” said Kemp. “2008 even saw the first offer of ‘Buy one, get two free’. Madness. Now’s the moment of truth, when your sales and marketing have to work together. And let’s not forget that we’d all be drinking water if it wasn’t for the taste of soft drinks. The new media revolution can get a bit out of control, but Stephen Fry recently brought a massive response on Twitter when he woke with a ‘beast of a hangover’. Irn-Bru and a greasy fry up was the frequently suggested cure.”
Jonathan Banks of Nielsen Business Insights warned against trading with discounters: “Two to three years down the line, this isn’t an automatic win,” he said. “Nor is private label. As brand owners, you can be masters of your own destiny. Look at other categories in-store – steal ideas. For most categories, it’s business as usual. A drink is a cheap, affordable treat compared to a car or holiday.”
Three companies then spoke on innovation that works. Patrick O’Flaherty spoke on organic as premium bearing up well in comparison to other ‘finest’ and ‘taste the difference’ ranges.
“People will pay a premium for functionality, such as higher levels of vitamin C,” he said. “We’ve signed an agreement with Evesse apples, highlighted in the news as ‘The apple that helps you live longer’ and ‘The apple that takes years off your arteries’. RDA Organics are the indulgence that is health, ethical, sustainable and fits the bill in terms of the innovation market. We work with farmers and growers to move to organic. It takes time, but we can attain more margin and it brings a global balance.”
See the antioxidant phenomenon feature in the June issue of Beverage Innovation magazine.
Energy Beverages Worldwide was represented by Zenith International COO, Charles Philips. “US males are choosing small, 60ml shots such as Enerbev over larger energy drinks in substantial numbers,” he said. “Having the same caffeine hit as two cans of Red Bull, they’re not bulky and fridge-dependent, and don’t give you too much liquid or fizz. The number of shots sold grew from 186 million units in 2008 to 323 million units in 2009 in the US, indicating massive potential in Europe.”
Neville Portelli, co-founder of The Juice Brewery, presented Hopper – the ‘soft drink born in a brewery’. “Most soft drinks taste like they were made for children, so we set out to make something that has all the enjoyment of beer without the alcohol.”
The afternoon session looked at health and nutrition labelling. Dr Josephine Wills, director general of the European Food Information Council, spoke on how European consumers are using nutrition labels. Dr Jane Holsworth, campaign director for the Food and Drink Federation, explained ‘Guideline Daily Amounts for informed choice’. And Rosemary Hignett, head of nutrition for the Food Standards Agency, spoke on ‘Sign-posting the way to healthier diets’.
The day concluded with a recycling plant tour following an explanation by Chris Dow of Closed Loop Recycling. He had a few things to say on PLA: “Financial forces are behind PLA, but it’s best kept out of bottles. Caps, too, can be recycled. The best thing is to crush the bottle and put the lid back on before putting it into a recycling unit. That’s perfect.”
At the Dagenham Closed Loop plant, 35,000 tonnes a year is processed. Operational 24 hours a day, it grades and super-cleans PET and HDPE to US FDA standards for food contact material.
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