With no major event this summer, a reliance on smaller events and good old fashioned retailing excellence in ranging and merchandising – along with a little creativity – is the way to boost sales of a category being driven by shopper diversity and value.
Worth £233m, the soft drinks category in impulse has consistently produced profits for local retailers, and it will continue to do so, but in the face of stiff competition, retailers must work hard to ensure that their shop is front of mind for customers. With a growing convenience sector, part of the hard work is already done – an open door if you like. Ensuring customers step through it is the tricky part.
This summer, without a major sporting event like last year’s World Cup or Commonwealth Games, we’re having to be creative, and focus on smaller events, while ensuring trends are being adequately addressed in store.
The main three trends boosting sales are growth in shopper diversity, continued shopper focus on value and growth in convenience.
AG Barr is tapping into these trends with its growing portfolio. Head of Marketing, Adrian Troy, says that summer is key to the entire soft drinks market and retailers need to ensure that their fixture reflects seasonal category uplifts in order to generate maximum profits. “Over the 2014 summer period, the total soft drinks category indexed at +22% in Scotland with water, juice drinks and other flavoured carbonates seeing the biggest summer uplifts,” he says.
AG Barr is currently investing across its portfolio, including Irn-Bru, the Barr Family, Rubicon, Strathmore and Rockstar.
Keep energy flowing
“Energy and Water continue to be important categories and we’ve tapped into these trends with the launch of the Rockstar Energy Waters range,” says Troy.
The range includes two variants of Rockstar Energy Water, Blueberry, Pomegranate & Acai and Peach, in a 355ml size can. “Rockstar Energy Waters will bring new consumers into the energy category and the refreshing, lighter nature of the products will also open up new consumption occasions such as lunchtimes and after exercise,” says Troy.
The range has 50% less sugar and calories per 100ml than the 500ml standard Rockstar Energy cans – and fits into the trend for both energy and lower calorie and zero sugar options.
Dave Turner, Trade Communications Manager at Coca-Cola Enterprises (CCE), points out that low and zero options make up 40% of the sector, something retailers should be on top of.
“Coca-Cola Life has been launched in line with this recent demand, and by stocking lower calorie or zero sugar options, retailers can make sure a range of consumer tastes and preferences are catered for, in turn driving growth.”
Turner also highlights the current popularity of bottled water, which grew by 12.6% in the last year.
“The sector will remain a key focus area for retailers throughout the summer months to come, as consumers look for fast rehydration in hot weather, while new products, such as our glaceau smartwater brand, are also likely to encourage incremental growth,” he says.
Turner also adds that mixers, such as Schweppes, should also see an increase in sales, whether served with or without alcohol, and retailers should consider focusing on this sector too.
CCE’s top soft tips
- Get your range right. Look to best-selling brands that are backed by marketing
- Stay up-to-date with innovation. NPD and new packaging formats are ideal for incremental growth
- Focus on big events. Be aware of big occasions, such as popular TV shows or sports events, which provide a key opportunity to drive sales
- Ensure your soft drinks fixture is easy to shop. Group different sectors together, such as colas, flavours, energy drinks, waters, juice and juice drinks, and store your best-sellers in the most prominent display locations
- Keep your soft drinks cold. Last summer’s growth proved that people are looking for instant refreshment during hot spells
- Stock price-marked packs. Shoppers are always looking for value, and convenience stores are in the ideal position to use price marked packs as a tool for growing sales.
Soft Drinks has long been one of the most profitable categories in local stores and to make that count everywhere, all retailers must ensure that the soft drinks fixture is highly visible, well presented and located in a high footfall area between the door and the till.
Effective ranging, space allocation and stock availability are the most important elements to get right. AG Barr’s Troy says: “Make it easy for customers to find what they want by grouping categories and brands within them together. Then identify your best performing brands in each category and stock these at eye level with adequate facings to ‘signpost’ segments.”
He advises regularly restocking, especially during the summer months to take advantage of the increase in ‘drink now’ impulse purchases. “If a product is selling out regularly increase the number of facings. Empty shelves equate to lost sales, so we’d advise reviewing your range and space allocation often based on your own sales data and local knowledge.”
The importance of chilling should never be underestimated either. ‘Drink now’ sales account for more than three quarters of all soft drinks sales in impulse – and in this age, it is unthinkable to not have these chilled. “Chilled availability is the key driver for soft drinks sales, particularly between April and August – the really critical summer months,” comments Troy, who points out that shoppers consume 22% more soft drinks during the summer with water, fruit drinks and other flavoured carbonates benefitting most. “Retailers who adapt their ranges to reflect this range, particularly in the chiller, will benefit significantly.”
Certain sales opportunities only arise in the summer – from annual occurrences like barbecue season to one-offs like this year’s Rugby World Cup. “Providing a range of soft drinks in 4x330ml multipacks and a choice of larger, sharing formats of colas and flavoured carbonates ensures there is something for everyone to enjoy as people increasingly watch televised sport at home, and often incorporate food or a barbeque into the occasion,” says Troy.
Adult brands on the up
A reduction in the consumption of alcohol is leading to growth in the adult soft drinks sector. That’s the view of Amanda Grabham, Marketing Director – Soft Drinks at SHS Drinks whose portfolio includes Shloer. “More than one in five adults (21%) don’t drink alcohol at all, and in addition to this there are those who aren’t drinking alcohol for religious or health reasons or on specific occasions such as when they are driving or they are mums-to-be,” she says. “Consumers are also turning to adult soft drinks because they want flavours which are alternatives to wine and are more suited and attuned to the adult palate. That’s why flavours such as grape and elderflower are so popular, and why you are seeing growth coming from flavour combinations.”
If further proof was required on the growth of adult soft drinks then consider the recent expansion of the Schweppes brand with the launch of an innovative range, new brand proposition and an advertising campaign aimed at a younger adult audience.
A three-strong range of Schweppes Sparkling Juice Drinks has been launched, including Grapefruit & Blood Orange, Orange & Cranberry and Lemon & Elderflower variants. The sparkling juice drinks are one of the lowest calorie of their kind in the adult special sector at 20kcal per 100ml and aim to drive incremental category growth with consumers that are looking for greater choice.
Full of flavours
“Summer is a time when bold and vibrant flavours are popular,” says CCE’s Dave Turner. In-line with this, Fanta continues to perform well, growing by 5.6% last year . New for 2015, CCE recently launched Fanta Apple and Sour Cherry. “The new variant has been introduced as part of the ongoing rotation of Fanta flavours, which last year saw the Raspberry and Passionfruit variant add an additional £2.5m worth of sales, underlining how new variants can help retailers to achieve incremental growth,” he adds.
Fruit is in full bloom this year, with Rubicon’s exotic range growing by an impressive 40% over the past two years.
AG Barr has enabled retailers to profit from this fast-growing market with the launch of Rubicon Coconut Water which contains 34% juice.
Packing a punch
With price-marked packs being used more frequently as manufacturers across all categories realise their importance, there is a need to continually innovate to maintain impact and continue to deliver great value to shoppers.
AG Barr has recently incorporated an additional multi-buy element to its PMP offering. This benefits retailers as it encourages additional purchase while still delivering profit and consumers feel like they are getting even better value.
This mechanic was initially trialled on Rubicon one-litre cartons which were offered with a £1.29/2 for £2 flash on pack. This additional multibuy element has proved so successful that it is now used on Irn-Bru and Barr flavours and is being repeated on Rubicon and also rolled out on Sun Exotic and KA one litre cartons.
Over at Lucozade, its wide range of flavours has been boosted by the launch of Lucozade Energy Grafruitti, a combination of mixed berries and citrus flavours with an exotic twist.
Corrine Hopwood, Lucozade Marketing Director, comments: “We understand that launching new flavours is critical to continuing market growth, with taste and flavour acting as key drivers of purchase intent when shopping within the sports and energy category. Our launches are driven from consumer insight and we have seen the excitement generated when launching new variants, particularly through social channels. Acting on this, we will continue innovating and investing in NPD as the year goes on.”
Lucozade Ribena Suntory is taking this one step further with its ‘Turn up the Tropical’ campaign, which includes a national consumer competition, ‘Win a #Tropicoliday’. The activity will aim to drive mass awareness of the Ribena tropical range.
The Ribena tropical range, which compromises of three variants; Mango & Lime, Pineapple & Passion Fruit and the recently launched Orange & Guava, will be showcased within the £1.5m marketing campaign including print, digital and out-of-home advertising, as well as in-store and social media activity.
Taking it home
Take Home products account for 24% of sales and remain hugely important as they are higher value items which encourage footfall and loyalty. “Retailers should ensure they stock sharing size bottles of trusted, well-loved soft drinks brands to drive purchase and restock regularly as availability is key,” says Troy. “Sharing sized bottles can also be grouped with other products by occasion to encourage purchase. For example, soft drinks can be positioned with sharing snacks such as crisps at the weekend to encourage ‘big night in’ purchases.”
AG Barr’s brands will benefit from a wide range of activities this year including sharing packs. This will include TV campaigns, on-pack promotions and profit-boosting NPD.
