On-trade soft drink sales fall by 1%

The report says the value of the category in the on-trade reached £2.7bn in 2011. The decline of 1% compares with a 1% increase in 2010.

Volumes were also down by 4%, compared to a 3% decline in 2010.

A 2% increase in distribution of soft drinks year on year, due to new openings, helped managed pubs to buck the trend in the on-trade. Value and volume rose by 7% and 3% respectively. Cola and energy drinks were the most popular category in this sector.

In contrast, non-tenanted pubs saw soft drink sales fall 3% by value and 6% by volume, partly due to declining pub numbers.

And independent pubs fared worse, with volumes down 10% and sales by value down 7%.

The report says: “Closures have hit nightclubs hard and the late night market is switching towards circuit bars, cafés and wine bars. Soft drinks managed to stay afloat due to the popularity of juice drinks, mixers and energy drinks and, increasingly, as ingredients in cocktails.”

Closures in wet-led sports and social clubs meant c.1,500 accounts in traditional wet-led sports and social clubs were lost.

In restaurants, soft drinks sales fell 3% by value and 6% by volume as consumers rein in their leisure spending.

Lemonade had the most success in restaurants, with increases in value and volume of 19% and 14% respectively. Restaurants were the only outlets where energy drinks lost out, down 16% by value and 13% by volume.

In the leisure and foodservice sector, which includes fast food outlets and coffee shops, there was an increase in so-called “Soft drinks incidence”, the percentage of orders or visits that include a specific drink.

The report says: “Despite more sunny days and fewer pubs closing, higher VAT and rising prices generally meant there was no silver lining for the on-trade in 2011.

“Growing concerns about the economy and job security put further pressure on disposable income. With fewer pounds in their pocket to spend on going out, consumers opted to stay in more.

“Rises in VAT and alcohol duty made price increases inevitable. This widened the gap even further between on-premise and
take-home.

“Of course the weather didn’t help. A cold winter was followed by a disappointing summer. Although the two heat-waves in spring and early autumn lifted the spirits and drove footfall, it wasn’t enough to halt the downward trend.”

In terms of drinks categories in the on-trade, cola increased 5% by value to £1.04bn, with volume up 1%. Lemonade was number two in the category, but the category fell 11% by value and 12% by volume.

Mixers “bounced back”, the report says, with a 4% value increase and 4% rise in volume. Sales of energy drinks surged, up 16% by value and 9% by volume, helped by the rise of ‘Jagerbombs’.

Juice drinks performed strongly, with values up 7% and volumes up 3%, but carbonates and mineral waters suffered double -digit declines.

Taken together, Britvic and Coca-Cola Enterprises accounted for almost 80% of the soft drinks market in the on-trade, by both value and volume.

On-trade data in the report is from CGA.