Britvic identifies £2.6bn soft drinks sales opportunity by 2023
Britvic has unveiled its new category vision, which reveals a £2.6 billion soft drinks sales opportunity over the next five years.
Its Drink Differently vision – identified in its latest annual Soft Drinks Review - shows that although the soft drinks category is already worth £14 billion, and soft drinks are consumed twice a day on average, “there is still considerable headroom for growth”, because soft drinks only feature in one of three beverage occasions.
John Campbell, commercial operations director at Britvic, said: “The consumer landscape and the way people live their lives is fundamentally changing and now is the time for the category to evolve. Soft drinks must adapt in order to maintain, but also grow their relevancy amongst consumers. At Britvic, we want to share our insights with customers and work together to identify new opportunities to grow the category, all by getting the nation to Drink Differently.”
Britvic’s latest report highlighted that soft drinks was one of the top performing categories within convenience in 2017, and it continues to be a key driver of footfall to convenience stores.
Soft drinks featured in 20% of all convenience shopping baskets, making it the number one category purchased, ahead of newspapers and milk for the fourth year running. As a result, the category grew in value by 2.3% to be worth £2.1 billion.
Health continued to be one of the defining trends for soft drinks in 2017, with manufacturers showing their commitment to providing healthy alternatives in advance of the sugar tax, introduced this month.
In 2017, sales of diet soft drinks, including low calorie and low sugar drinks, drove value sales growth across all sub channels, increasing by 12.3% and adding £49 million in value sales (IRI) to the category.
The Cola segment, which is the largest sub category in soft drinks, grew by £21 million last year, equating to 4.2% value growth in convenience. Of this growth, 76% came from the diet segment, with sales for no sugar cola brands – such as Pepsi Max and Coke Zero – up by £11 million and £8 million respectively, year on year.
Trystan Farnworth, commercial director, convenience and impulse at Britvic, said: “There’s a really positive story to tell for soft drinks in convenience at the moment. The results showcased in this year’s review show that the category is in good health. Britvic is well placed to navigate through the Soft Drinks Industry Levy and we would encourage all convenience retailers to look upon the levy with a view of maximising the opportunity to provide healthier choices, rather than minimising the impact.
Britvic’s research has identified five drivers of category growth, which it said are key to unlocking the £2.6 billion soft drinks sales opportunity. These are: ‘Created for Kids’, creating healthy and exciting soft drinks, which are loved by kids and trusted by parents; ‘Especially for Adults’, focusing on products that motivate more adults to choose soft drinks; ‘Inspired Lifestyle Choices’, described as ‘nudging the nation towards positive drink choices, every day’; ‘Elevated Food Moments’, whereby every food moment is enhanced with “the perfect soft drink partnerships”; and finally ‘Sensational Social Experiences’, creating “sensational social experiences”, and redefining the possibilities for soft drinks, according to Britvic.
On Friday 6 April the sugar tax on soft drinks came into effect, hitting any drinks that contain more than 5 grams of sugar per 10cl. Manufacturers of these drinks now have to pay a levy of 18 pence per litre to the Treasury, or 24 pence a litre if the sugar content is more than eight grams per 10cl.
Commenting on the sugar tax, Mark Jones, partner and food and drink industry expert at Gordons law firm, said: “Introducing the sugar tax on fizzy drinks is the Government’s latest attempt to tackle the obesity crisis but while it has had some effect on the drinks market by encouraging manufacturers to develop lower sugar products, this levy in isolation is unlikely to have any significant effect on our health.
“Although the sugar tax is clearly a step in the right direction, there is little evidence to demonstrate it actually tackles the problem of calorie intake/ calorie balance.”