Britvic’s annual Soft Drinks Review 2022 has revealed opportunities for the convenience channel to grow soft drinks sales by appealing to shoppers at both ends of the value spectrum, as the nation adapts to life after the pandemic.
The report found consumers on average are £1,200 worse off this year compared to 2021, with one-in-five being financially squeezed due to factors like rising inflation and energy costs. However, the easing of Covid-19 restrictions and growing shopper confidence means overall consumer spend is expected to be noticeably higher in 2022 compared to the previous two years, with one-in-five consumers claiming they are better off financially following the pandemic.
Britvic said this polarisation in personal finances presents new opportunities for convenience retailers to maximise customer spend from soft drinks that cater to ‘premium’ and ‘value’ shopping occasions.
Premiumisation
With consumers increasingly looking for new ways to treat themselves during lockdown, the soft drinks category saw a move towards premiumisation, with a 6% price per litre growth in 2021. This was primarily driven by the resurgence of on-the-go drinks and the accelerated growth of the energy drinks segment – two trends that are predicted to continue throughout 2022.
Chris Newman, Head of Category Management for Convenience and Impulse at Britvic, said: “It’s vital that retailers stay on top of these trends by updating their soft drinks ranges and merchandising to cater for different need states and missions, such as on-the-go or food-to-go occasions, or top-up shops. Innovation also plays a key role, driving additional sales across occasions, particularly when it comes from big name brands.”
Value hunting
At the other end of the scale, larger numbers of consumers are feeling the pinch from rising living costs and are looking to make their money go further. A total of 43.9% of sales in the convenience market now come from PMPs – up from 38.1% in 2019 – as more shoppers seek out price reassurance and value for money options. Pressured shoppers are also expected to move toward smaller transactions and smaller pack sizes in a bid to make their money stretch further.
Newman added: “Convenience retailers must be alert to the budget pressures of these customers and adapt their soft drinks ranges accordingly to offer more value-friendly options. Retailers can meet these shopper needs by stocking market-leading brands in added-value pack formats.
