Thirsty work

Satisfying consumers with product differentiation and value for money is helping to boost soft drinks sales. John Porter reports.

Soft drinks tend to get a bad press, often cited along with bagged snacks and confectionery in the media as examples of things that are bad for us, especially when considering children's food. The reality is that in a category that spans everything from carbonates, fruit juice and smoothies to energy drinks and mixers, the stocking choices for operators range from healthy brands to indulgent drinks.

This diversity has helped drive sales of soft drinks over the past year in the cost sector despite the very challenging consumer environment. Figures compiled by Nielsen for Britvic's 2011 category report shows that the foodservice channel reversed its 2009 decline, and rose 9.4% in value to £284m.

Workplace catering in particular recorded a 9.4% increase in soft drinks sales last year, to £66.6m, suggesting that more people were buying lunches in canteens rather than bringing food from home.

Sales in the education sector also saw good growth, up 6.3% to £40.8m, although the health and welfare market fared less well, up just 0.8% to £29.2m.
 
Britvic business unit director – foodservice & leisure, Andrew Boyd, says: "Soft drinks remain a relatively inexpensive treat, with cola again one of the big winners. Fruit juice was the most popular soft drinks choice, up 8% in value to £78m, followed by cola, up 27% to £49m.

Lemonade, other carbonates and fruit drinks all achieved value growth but still and flavoured water as well as drinking yogurt declined."

For operators in all sectors, offering a wide choice is more important than ever. Jayne Enskat, bars brand manager at SSP UK, which operates bars at airports and railway stations across the country, says: "It is clear the soft drinks market has moved on from just lemonades or Cokes served in tall glasses.

"With tighter measures on drink driving and a higher awareness of responsible drinking, the soft drinks category is more important than ever. "As an operator we demand product innovation from all our suppliers and we've certainly noticed a dramatic improvement in soft drink options over the last 12 months – not just in flavours and formats but in packaging and presence too."

New brands such as Iron Press and Crabbies from Halewood International have made a big impact, says Enskat. "In a very competitive category there is no doubt we are seeing far more interesting and flavoursome soft drink options."

Another supplier that has focused on new product development in response to a challenging market is Calypso Soft Drinks. It's school compliant range includes Calypso Exotix in guava, mango and tropical juice varieties, Calypso Rapidz sparkling drinks in fruit cola, lemonade and iron brew varieties, as well as Aqua Juice juicy water.

Sales and marketing director Richard Cooke says: "NPD and product differentiation will be a core factor in our strategy for 2011.

"Our price points are in line with value for money soft drinks and they weather any economic storm quite well.

"There is a trend for broader taste profiles, as consumers expand their range and demand a greater range of more diverse flavours, variations and tastes. We've seen a similar trend in food and this will also be reflected across the soft drinks marketplace."

Calypso is building on the success of its 'Surf Anywhere' schools campaign, which has seen more 75,000 children take part in surf coaching, with 'Sports Anywhere', offering mountain bike coaching to children in urban schools.

Specialist private and public education catering contractors, Alliance in Partnership (AiP), offers large bottles as well as a range of smaller bottle, carton and pack drinks, and reports that the Calypso Aqua Juice range and orange juice are the most popular with pupils.

Managing director David Weller says: "Popular brand names are quite important and help to drive sales because pupils are aware of external brand advertising."

Drinks are promoted in the dining hall by attractive point of sale, meal deals, special offer pricing, sports promotions throughout the year and regular parent, teacher and pupil taster sessions for new menu products alongside food dishes.

The cost sector is price conscious at the best of times and, as Neal Haworth, category marketing manager for vending specialist Aimia Foods, says: "With the recent round of cost cutting initiatives from the Government, combined with the ongoing effects of the recession, both public and private sector organisations are under even more pressure than usual to keep costs to a minimum.

"Companies still need to deliver, without comprising on quality or paying over the odds for products and services.

"Even though many budgets have been cut, customer expectation is still high and they are demanding better quality packaging, more flavour variants and even more value for money from soft drinks suppliers."

Aimia recently revamped its Freshers dilutables range with a new bottle making the drink easy to pour and an apple and blackcurrant variant added to the original orange, lemon and blackcurrant flavours.

Another key Aimia product is Milkbreak, a school compliant milkshake. Haworth says: "Milkbreak brings much needed innovation to a sector, which considering it is continuing to grow, has seen very little NPD recently. It's the first and only 'add water' milkshake in the UK. Stored in composite containers in a powder format, to make the drink, you simply mix the powder with water."

Innocent Drinks has been proactive in the juices and smoothies category with new product launches and promotional activity. In February it launched a range of not from concentrate juices, which includes an orange juice – with bits and smooth, and an apple juice. The juice is available in the company's new recyclable 330ml PET carafe into which it says it squeezes the equivalent of 11 juicy oranges and eight large apples.

Developed and designed by a specialist team at Innocent, the carafe contains 25% recycled material, is easier for consumers to use and convenient to recycle. Now part of Coca-Cola, which increased its stake in the business to 58% a year ago, a raft of NPD is in the pipeline.

Sales of sports drinks continue to grow strongly, prompting continued product development by the major brand owners. GlaxoSmithKline has added blackcurrant flavour to its Lucozade Energy range, as well as cherry flavour to the Lucozade Sports range.

With an eye to the growing focus on health concerns, the Lucozade Sport Lite low calorie range has been expanded with the launch of an orange variant.

Shona Hughes, Lucozade Sport Lite senior brand manager, says: "Lucozade Sport Lite has been a fantastic success story. It particularly appeals to everyday exercisers and social sports participants who do not purchase or consume a sports drink because of calorie content. Each 500ml bottle has only 50 calories. "It was developed alongside top athletes and sports scientists to overcome this barrier and ensure quality."

Those sports scientists are clearly keeping busy, because Coca-Cola Enterprises (CCE) involved them in the development of a zero sugar, calorie free version of its Powerade sports drink, which it launched in the UK last October.

CCE quotes research that shows that 52% of people taking part in sport reject sports drinks because of the high sugar and calorie content. Selena Taylor, trade communications manager at CCE, says: "Powerade Zero solves this issue, offering an alternative choice, appealing to a wider audience of men and women as well as a combination of fitness seekers and sportsmen."

CCE is also stressing its links with the London Olympics with Powerade ION4. The still isotonic sports drink, which will be used by Team GB and ParalympicsGB to help them prepare for London 2012, contains fluid and four of the minerals – sodium,  otassium, magnesium, calcium – lost in sweat. ParalympicsGB athlete marathon world record holder and World 200m champion, Richard Whitehead, features in the marketing campaign for Powerade ION4, with the brand aiming to raise awareness of the Paralympic Games and help to change attitudes to disabled sport.

CCE is also backing its Capri-Sun juice drink brand in Great Britain with marketing support. An on pack promotion entitled: 'Imagine Your Perfect Day and Win It', offers one winner the chance to create their perfect day, worth up to £5,000.

Taylor says: "Capri-Sun's ever increasing success is evident with a strong appeal across teens and young adults. This exciting promotion will run from April 1 for 12 weeks while teens are still at school and we're confident it will help boost soft drinks sales ahead of the summer."