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The warmer it is the more soft drinks you sell. Chris Dillon finds out how to get your range ready for summer.
As the temperature increases, thirsty and tired customers will be looking to their local convenience store for quick, cold drinks. Retailers who are on hand with a wide range of soft drinks will save the day.
Maurice Newton, sales & marketing director at CBL Drinks, says: “Hotter weather often results in consumers moving away from carbonated soft drinks in favour of still drinks and bottled water.” Retailers that stock more of those products will see the benefit in summer.
In warmer weather it is even more important to ensure that soft drinks are kept chilled and readily available. Adrian Troy, head of marketing for AG Barr, says: “Chilled availability is the key driver for soft drinks sales, particularly between April and August.”
Bottled water is a runaway success in the summer and retailers should look to capitalise on this. Donna Pisani, trade communications manager for Coca-Cola Enterprises, says: “Bottled water is performing well, with 11.9% growth. The sector should remain a key focus area for retailers during the summer, as consumers look for fast rehydration in warmer weather.”
Flavoured drinks also increase in popularity and Boost is aiming to capitalise on this with its recently-launched sugar-free Tropical Guango. Simon Gray, Boost managing director, says: “This limited-edition line is intended to capitalise on summer festivals, carnivals and sporting events.”
Sharing formats are also important. Nigel Paine, out-of-home commercial director for Britvic, says: “Sharing formats should not be neglected, as occasions such as barbecues and picnics encourage spikes in demand for larger bottles and multipacks.”
It’s just a few weeks until the summer sport season kicks off. Donna Pisani reveals how it is helping drive sales.
“It’s set to be an exciting summer for the soft drinks category, with a range of launches and brand activity to tie in with people dusting off their barbecues, having summer nights in, and enjoying UEFA Euro 2016 and the Rio 2016 Summer Olympic Games.
“Our Coca-Cola range is a firm favourite with consumers, and to further make the most of its popularity we have launched Coca-Cola Zero Cherry in 330ml and 500ml formats to tap into the demand for exciting new flavours of popular products.
“With this summer’s Euro 2016 tournament kicking off in June, Coca-Cola is helping retailers to build excitement with a ‘win tickets’ on-pack promotion. It will appear on 90million packs of Coca-Cola, Coca-Cola Zero and Diet Coke, including 500ml, 1.25l and 1.75l bottles and 330ml can multipacks.
“Another summer staple is bottled water, which continues to dominate the soft drinks category thanks to the continued rise of the health-conscious consumer, and Glacéau Smartwater has played a key role in this growth, achieving a value of £19.4m.
“This makes it an ideal choice for retailers that are looking to increase their range, and Glacéau Smartwater is available in 600ml and 850ml bottles, while the release of a six-bottle multipack is set to increase its popularity for future consumption.”
During the budget in March, George Osborne announced that a sugar tax on soft drinks would enter the market from 2018. The tax will have two levels, one for drinks with a sugar content above 5g per 100ml and a higher one for drinks with more than 8g per 100ml.
The move has been criticised across the industry, especially by manufacturers who have already invested in reformulating their products.
Britvic’s Nigel Paine says: “Since 2012 we have removed 18billion calories from the UK drinks market and by 2020, 60% of our products will be lower sugar or have added nutritional benefits.”
Similarly, CCE has invested £15m in reformulating its drinks since 2012, reducing the average calorie count in its sparkling drinks by 5.3%.
Regardless of the tax, healthier soft drinks will continue to be in demand as consumers become more knowledgeable about the products they consume.
“We’ve got our soft drinks with meal deals, so people tend to grab a coke with them or go for a healthier deal with a water. We always have promotions on, recently we had Monster on for a £1 and we’ll have Relentless for a £1 soon too. There’s always something to draw people in.
“Soft drinks is a little bit like fresh produce in that it’s a little bit of a beast. On hot days you sell so much, even the larger bottles fly off the shelves. You can’t keep a lot of stock out back just in case so you have to really stay on top of it. You can’t sell blank spaces.”
Sat Sangha Spitfire Store, Barnaby, Stockton-On-Tees
CBL Drinks’ Maurice Newton says: “Eighty per cent of consumers are now worried about sugar in their drinks and if retailers want to retain custom, they need to ensure they are stocking sugar-free options.”
Drinks that have added benefits are also showing strong growth. Michelle Frost, general manager for Mars Chocolate Drinks and Treats, says within the milk drinks category, the sub-category showing the most growth is specialised milk.
“Capitalising on this growing trend, Mars Chocolate Drinks and Treats introduced Mars High Protein and Snickers High Protein milk drinks last year,” she explains. The company has also added a Mars no added sugar flavour to its 350ml drinks range.
Keep on top of trends
The good news for convenience retailers is that the number of impulse purchases are increasing. CCE’s Donna Pisani says the volume of drinks bought to consume instantly grew steadily in 2015. “This trend looks set to continue and retailers can tap into this by stocking a variety of pack sizes in their chillers for people to consume quickly,” she adds.
In soft drinks one of the biggest trends is still value. Price-marked packs are a sure way of communicating to shoppers that you are offering a fair and competitive price. Boost’s Simon Gray, says: “Of the top 100 selling energy drinks, 67 are price-marked packs. Comparing PMPs and non-PMPs, PMPs are growing considerably faster.”
Shoppers also think that larger formats offer greater value, which is driving growth in the sector. AG Barr’s Adrian Troy says: “The carbonated energy drinks category continues to grow. Now worth £612m it’s one of the biggest categories within impulse soft drinks, within this big cans are growing 10%.”
It’s also important to stay wary of flavour trends and stock products that your customers will be looking for. James Logan, commercial director of Refresco Gerber, says: “Within juice and juice drinks, orange continues to dominate, accounting for 30% of value sales. This is followed by apple at 9%. The fastest-growing flavour is coconut.”
Adrian Troy, head of marketing at AG Barr, explains how to change your fixture to capitalise on summer sales.
“Soft drinks is one of the most important categories in your store for driving footfall so it’s important to stock the product ranges and brands your shoppers are looking for. We’re working closely with retailers to meet consumer trends with our top-performing brands: Irn-Bru, Rubicon, Rockstar, Strathmore and Barr.
“Chilled availability is the key driver for soft drinks sales, particularly during the critical summer months. Shoppers consume 21% more soft drinks during the summer, with water, juice drinks and flavoured carbonates delivering the biggest increases. Retailers who adapt their ranges to reflect this trend, particularly in the chiller, will benefit significantly.
“Empty shelves equate to lost sales, so review your range and space allocation by category often, based on your own sales data and local knowledge. If a product is selling out regularly, increase the number of facings.
“Take-home packs are also significant as they are higher value and encourage footfall. Secondary displays, merchandised with complementary products to appeal to shoppers hosting a big night in or barbecue, can drive significant incremental sales, especially when linked into an event such as a sport.”
Keeping on top of these trends and reflecting them in what you stock can help you attract more customers and give existing ones more options. Britvic’s Nigel Paine says retailers should segment the chiller into four areas, carbonates, still, energy & vitality, and water. “Take advantage of growing segments, such as iced tea, to grab the attention of consumers looking for more choice,” he explains.