Sales of soft drinks are booming but what customers are drinking is changing. Does your offering reflect the shift?
The soft drinks category in foodservice was worth £2.7bn in 2018, an increase of 2.5% on the previous year, according to drinks giant Britvic.
The introduction of the sugar tax 12 months ago has had a dramatic effect on buying habits and with the prices of many soft drinks rising as a result, consumers have shifted to low sugar alternatives and water, so much so that market analyst IRI says an additional 7%, 11m litres, of lower sugar soft drinks are being consumed every week. Add to that the fact that it’s estimated one in every 13 soft drinks sold is now a low sugar alternative and it’s clear to see they are must-stock items.
It’s certainly been true for Captain’s Fish & Chips in Hoddesdon, Hertfordshire, which swapped cans of 7UP for the lower sugar variant 7UP Free. Owner Tony Forgione comments: “We’re selling a lot more of the 7UP Free now as well as low sugar drinks like Diet Coke, Pepsi Max and Dr Pepper.”
Tony’s built up his drink sales by offering customers the option to add a can to any lunchtime meal deal for an extra 50p. He comments: “I’m next to a Subway selling a £3 meal deal so this makes me competitive. As long as I cover my cost, that’s fine with me because I’m making my money on my sausage and chips, not the can but it’s the can that pulls the customers in.”
Toni also regularly moves the drinks around in the chiller and changes the offering, adding retro flavours such as Tizer and cream soda, to maintain customer interest.
PEPSI MAX ADDS MORE FLAVOUR
Pepsi MAX is now available in raspberry flavour.
The new no sugar raspberry variant is available alongside the already popular cherry and ginger flavours in a variety of pack formats from the two litre bottle, ideal for sharing, to the smaller 500ml price-marked pack and 330ml cans.
Higher prices have not only seen consumers switch to low sugar options, but it’s also resulted in some shops, like Catch in Ashford, Kent, changing brands in a bid to remain competitive. Manager Kevin Hill made the move from Coke to Pepsi to save him and his customers money.
He comments: “All of our cans and water are priced at £1.00. We have a OneStop convenience store and a café next door so we have to be mindful of selling price.
“In the last few months, we have made the change from Coke to Pepsi, the reason being that Coke is over £3.00 a crate more than Diet Coke, to no loss of sales really. Very few people, maybe one in 20, go for Coke, the rest take Diet Coke or something else.”
Health and well being continue to be key trends in the soft drinks market and, as consumers increasingly look for healthy hydration products, it’s creating a surge in sales of bottled water.
One shop that has responded to this trend is Chips ’n’ Things in Montrose, Angus, which now sells Strathmore water and is seeing sales increase. Owner Sarah Will comments: “I think the increase is down to people becoming more health conscious and aware of what’s going into their bodies. .
“We make around 58% profit on both water and fizzy drinks. Water is cheaper to buy in compared to fizzy drinks, but we sell it on to the customer at a lower price (£1.00 per bottle) as we believe customers shouldn’t be penalised for being health conscious. We will always try to make water the cheaper option.”
To help boost sales, Sarah positions drinks behind the EPOS system. “I think this helps as it gives customers a good visual of what’s available while paying for their food and also gives us the opportunity to upsell,” she adds.
IT TAKES THREE TO TANGO
Tango has launched three new sugar free flavours - Tropical, Strawberry & Watermelon, and Orange. Aimed at attracting younger consumers to the soft drinks category, they are supported by a pack re-design and a £2.2m marketing investment.
Despite health concerns, popular fizzy drinks brands continue to sell well. It’s why Matt Phillips aligned himself closely with Coca-Cola when he took over Shap Chippy in Cumbria 14 months ago, believing it to be the brand leader in soft drinks. Choosing to have a branded fridge in the shop, he introduced a core range, incorporated brand blocking - whereby all the brands are put together - and requested shelf edge labels to clearly denote prices.
Matt comments: “I know a lot of people don’t want a Coke fridge as they get told what to stock, but you have to look at the margins you’re going to make. Yes, I make 5% less on a can of Coke, but I sell 5% more of it.”
Matt’s adopted some clever strategies to the way he prices and sells drinks, which is bringing in extra sales and increased profits. For example, selling a 330ml can for £1, Matt’s worked out the price per ml and priced his bottles accordingly at £1.50 so as not to lose money. He also trains all staff to offer drinks as an upsell and he’s placed the items that make the most money i.e. bottles at eye level and cans on the lower shelf. “Automatically we’ve got customers picking up bottles now and bottles are more money in the till,” Matt explains.
Another trend influencing drinks purchases is the environment as consumers look to use less plastic. Pre-empting this, fish and chip chain Papa’s has eliminated all plastic drinks bottles across its takeaways in favour of cans with no negative effect on sales. Due to a lack of alternative packaging options for water, it does sell this in glass bottles, which customers are encouraged to recycle at home, and it’s also signed its takeaways up to Refill, a scheme which offers the public free tap water.
Owner George Papadamou comments: “If customers have a reusable bottle we’ll gladly refill it for them. We want to be ahead of the curve and do things before we’re told to as we pride ourselves on being a socially responsible company.”
STAY HYDRATED AND REFRESHED
Coca-Cola has launched Aquarius, a water drink that couples hydration with essential mineral intake. Available in two flavours, Aquarius Lemon is infused with zinc, which contributes to normal cognitive function, while Aquarius Lime includes magnesium to reduce tiredness and fatigue.