Seasonal soft drinks report - premium palette?

We’ve reached peak consumer fatigue with soft drinks. Time’s up. They want it, we can deliver it. What are we going to do about it? We do our research, that’s what. Here’s where we start — what do they not want to see?

“Consumers don’t want to walk up to the bar and see exactly the same soft drinks offering that they’ll be confronted with as they struggle with a trolley down aisle four of their local supermarket,” says Graham Carr-Smith, creator of Qcumber, explaining that selling soft drinks has, for too long, been an afterthought of the on-trade. Luckily, Carr-Smith also has some ideas on what people do want.

“By and large, consumers drinking soft drinks in the on-trade are on the lookout for something a bit interesting. They might be avoiding alcohol for a variety of reasons but they don’t want to
be treated like second-class citizens,” he says. “Of course, have a leading cola, a recognisable lemonade and a well-known juice drink as options, but just don’t make them the only options on offer.”

It sounds like he’s stating the obvious, but how many outlets are still stocking the same old brand variants? Why should soft drinks stand still while the rest of the marketplace moves on?

According to Steve Carter, sales and marketing director at Frobishers Juice, the market changed a long time ago and, yet, the soft drinks category has been slow to follow. “The premium soft drinks market is evolving. No longer happy to tolerate mainstream quality and run-of-the-mill flavours, consumers are seeking a premium soft drink that offers them choice, variety of flavour and brand heritage.”

Are we answering the demand?​

No, we really aren’t. Not yet anyway.

“The days of walking into a pub and being faced with the sole beer choice being ‘lager or bitter’ are, thankfully, long gone. We — suppliers, wholesalers, licensees — need to ensure that the same principles of expansion and free choice are now applied to soft drinks,” states Carr-Smith.

“A bar that stocked a single lager and a solitary ale would struggle to survive in today’s climate of consumer choice and new experiences. With more on-trade outlets serving food to families, or having a very different clientele depending on the time of day, the range of soft drinks on offer needs to better reflect what modern consumers want.”

According to Caroline Cater, operational marketing director at Coca-Cola Enterprises, the soft drinks category is currently growing significantly in the on-trade and demonstrating what a huge opportunity it offers licensees, particularly at a time when greater numbers of people are choosing not to drink alcohol at all.

Jamie Nascimento, Orangina marketing manager for Lucozade Ribena Suntory, agrees and says that 44% of consumers are notifying the company to let them know “that premium drinks should have a different taste to lower-value products.” Suddenly, the calibre of your soft or mixer stepped up a notch.

Simon Litherland, CEO at Britvic, says that, in the past year, the company has “executed some fantastic marketing cam-paigns, including Robinsons’ 80-year association with Wimbledon and
the Teisseire sponsorship of the Tour de France,” and so maintaining a presence as a leading brand is in-tegral to growing and becoming a first choice among consumers.

“Despite continued challenging market conditions [Britvic] is confident of delivering further profitable growth in 2015,” Litherland adds.

So what has really changed out there?​

There has been a seismic shift for the category towards the premium adult soft drinks market.

Amanda Grabham, mar-keting director of soft drinks at SHS Drinks, which includes Shloer and Bottlegreen in its portfolio, says: “The biggest and most notice-able trend in the soft drinks category is the migration to premium soft drinks, which is demonstrated by the significant growth in adult soft drinks and premium mixers.”

Grabham points out that “the latest data shows that volume sales of soft drinks in the on-trade are relatively flat (+0.1%) with value sales up by 5%, while volume sales of adult soft drinks (ASDs) have grown by 13% and value sales are up by 18% bringing the value of the ASD category to £379m.” Interestingly, at the same time, premium mixer sales have rocketed with sales pretty much trebling in volume (+192%) and value (+216%),” showing how much the category can expand into mixer territory.

Grabham makes the point that with Shloer and Bottlegreen in the SHS Drinks portfolio, the business is well placed to benefit from these consumer trends and is ideally placed to drive innovation.

“Bottlegreen has been particularly active in the on-trade, resulting in Bottlegreen sparkling pressé volume and value growing by around 160% to 170%,” says Grabham, highlighting that “the sparkling pressés and cordials were being given a further boost with the roll out of new pack designs across the two portfolios from September.”

Key features of the new packaging design include embossing on the glass cordial bottles and silver borders on the labels to reinforce the brand’s premium status, “while coloured caps are being introduced on 275ml Bottlegreen sparkling pressé bottles so that the flavours can be more easily differentiated,” says Grabham.

She explains: “The packaging emphasises Bottlegreen’s Cotswolds heritage with a ‘Made in the Cotswolds’ descriptor appearing prominently on the embossing on the 500ml cordial and on the reverse of the 275ml sparkling pressé bottles.”

All of this plays up to the brand’s premium image.

In all truth, there are many other reasons at play as to why the soft drinks category needs to expand and up its game. Namely, the proliferation of teetotallers now ‘at large’ and seeking tasty drinks that don’t contain alcohol.

“The increasing popularity of soft drinks can be partly attributed to a shift in the amount of alcoholic drinks being consumed in pubs and bars, with the Office of National Statistics reporting that one in five adults in the UK are now teetotal,” says Cater.

Grabham agrees: “One of the most fundamental changes in consumer behaviour working in favour of the growth of ASD (adult soft drinks) sales is the fact that more consumers are drinking less alcohol. Some 21% don’t drink alcohol at all, and 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.”

Global Brands has responded to the thirst for premium by introducing new soft drinks range Franklin & Sons, which has released five variants that use ingredients sourced from across the world.

“Franklin & Sons is perfectly placed to take advantage of the trend for natural, more premium and grown-up soft drinks and we have worked on positioning the brand to ensure it appeals to that market,” said marketing director, Simon Green.

Green continues: “All five of the Franklin & Sons line-up will be available in 275ml embossed bottles that have been de-signed to reflect the heritage of brand, which was first established in London in 1886.”

The flavours available are Sicilian Lemonade & English Elderflower, Wild Strawberry & Scottish Raspberry, British Dandelion & handpicked Burdock, Cloudy Apple & Yorkshire Rhubarb, and Ginger Beer & Malted Barley.

What have we learned? ​

In essence, there’s an opportunity here. People are experimental and, gradually, more bars are becoming unafraid of mixing things up.

“These are great times for the soft drinks market,” muses Carr-Smith. “Consumers’ minds are more open than ever to trying new brands, new flavours and new packaging formats. But as, or even more, importantly, the benefits of stocking an appealing soft drinks range that challenges some of the established norms have really hit home with a growing number of switched-on, on-trade operators.”

Carr-Smith breaks down how to start this process. He reveals: “Success in soft drinks is about three things: variety, visibility and presentation. If outlets have a half-decent range that give consumers a fighting chance of noticing them, then the sales effects will be self-evident. If staff can top things off with good glassware, ice and a fresh garnish then success in soft drinks is only a matter of time.”

Carr-Smith takes this as an opportunity to explain that “people are constantly searching for something a little bit different and innovative, and Qcumber really delivers on this.” He makes a compelling case. It’s quirky, it’s different, it’s on-trend, it’s refreshing, it’s mixable — it’s not a cola.

Then, there’s the trend for consumers being more conscientious about their health, natural ingredients and exactly what they are drinking. The times of neglecting to know are long gone.

According to Cater, consumer desire for healthier choices has seen the popularity of lower or zero-calorie variants increase in licensed outlets, reflecting the trend across the soft drinks category as a whole.

She describes how, even though “new product innovation has always been important in the on-trade, it has contributed to the growth of the soft drinks category in the on-trade this year, particularly as consumers look for exciting new flavours.”

Cater points out that “the desire for premium drinks has seen the launch of new soft drinks products, as consumers look for options that carry some degree of provenance in heritage — or, in other words, a ‘special’ drink that differs from one they might have day-to-day.”

Earlier this year, CCE launched Coca-Cola Life in the licensed channel, as a result of the demand for lower or zero-calorie options. Coca-Cola Life is sweetened with a blend of sugar and naturally sourced Stevia leaf extract and is the first new Coca-Cola to be launched in Great Britain since the arrival of Coca-Cola Zero in 2006.

“Coca-Cola Life features striking green branding on the iconic Coca-Cola glass contour bottle, which is de-signed to have strong stand-out quality behind the bar. It will help licensees to appeal to 35 to 55-year-old consumers by offering a lower-calorie cola, which features sweetness from natural sources only,” says Cater, adding that “the introduction of Coca-Cola Life to pubs and bars comes as part of CCE’s focus on the iconic contour glass bottle, which celebrates its 100th anniversary this year.

“This landmark was marked earlier this year through the unveiling of I’ve Kissed... — a global marketing campaign that features icons including Elvis Presley, Marilyn Monroe and Ray Charles being ‘kissed’ by the Coca-Cola bottle.”

Also aware that the naturalness of a product is important, SHS Drinks has made sure that Shloer and Bottlegreen sparkling pressés contain no artificial colours, flavours, sweeteners or preservatives.”

Plus, all Qcumber products are “made from 100% natural ingredients and are free from artificial sweeteners, colours, preservatives and flavourings,” says Carr-Smith.

With all of these upgrades, premium juice brand Frobishers has rebranded and repackaged its popular juice drink, Fusion, which hit pubs, bars, restaurants, cafés and food outlets in August. “The new-look Fusion promises the same all natural flavour and ‘nothing added, nothing taken away’,” says Carter, noting that “with growing consumer interest for healthy, no added sugar, natural juice drinks, Frobishers Fusion is ripe to tap into the expanding premium soft-drinks sector.

Promising more natural juice per bottle, Fusion contains about 75% pure fruit juice and fruit purée topped up with natural spring water and nothing else.” It is this kind of reassurance people are after.

Flavour is where most soft drinks have changed​

There is simply more thought put into what works seasonally and why.

Grabham identifies that “consumers are turning to adult soft drinks because they want flavours that are alternatives to wine and are more suited and attuned to the adult palate. That’s why flavours such as grape, elderflower and pomegranate are so popular, and why you are seeing growth coming from exotic flavour combinations such as mango and coconut.”

According to Grabham, “there is undoubtedly a seasonal influence on soft drink sales with lighter flavours such as strawberry, lime, peach and tropical fruits coming to the fore in summer, and autumn fruits such as apples and blackberries, and drinks with warmer, spicier notes such as ginger being more popular in the colder, winter months. That’s why it’s vital to review the soft drinks range on a seasonal basis to ring the seasonal changes with new flavours and limited editions.”

Grabham maintains that “elderflower is undoubtedly the key iconic flavour of the ASD category, and it is still very much the flavour of the moment. It’s the flavour that established the Bottlegreen brand 26 years ago, and now it really has come of age.

“Elderflower’s popularity shows no sign of slowing. In fact, it is gathering momentum through being incorporated in ready-to-serve spirits flavoured with elderflower. The arrival of a wave of elderflower flavoured tonic water mixers following in the wake of the Bottlegreen Elderflower Tonic Water, which we launched in summer 2013, and it’s also very much on-trend as a food flavouring ingredient.”

Turning to other flavours, Grabham says: “There is undoubtedly a thirst for more interesting and exotic flavour combinations, with 46% of consumers saying they would like to see more adventurous flavours and this is something we have been keen to develop, particularly from a Bottlegreen perspective, introducing combinations such as Bottlegreen Mango & Coconut Sparkling Pressé in the spring, followed by Cotswold Lemonade & Mint Sparkling Pressé this summer.”

Grabham adds: “Ginger is popular, but it is a polarising flavour — it’s not for everyone. Coconut is very definitely on-trend at the moment — driven in part by the emergence of the coconut water
category, and it’s a flavour that is also breaking through in other categories such as adult yogurts and ice cream. There is also a retro element to the ASD category, which is seeing a revival in interest in drinks such as traditional lemonade. Mint is another one to watch.”

For seasonal lines, Bottlegreen cordials also bring another dimension to the soft drinks offering during autumn and winter as flavours such as ginger and elderflower and the seasonal spiced berry limited edition ranges can be enjoyed as a caffeine-free hot drink, which Bottlegreen promotes through its seasonal Enjoy hot! marketing campaign.

More flavours​

Building on the strong growth of both original Qcumber and the 2014 launch of Qcumber with Mint, the new Qcumber with Ginger launched last month (August). Available in 330ml and 750ml glass bottles, the new flavour is a blend of natural cucumber with spicy ginger.

Carr-Smith explains: “After the successes achieved in recent years, we thought it was time to spice things up a little and new Qcumber with ginger is all set to do just that! With a hint of lemongrass to ensure that the sensation is spicy, but not ‘hot’, the new flavour really will be a treat for taste buds. Qcumber with Ginger has a gently warming mouth-feel, which is ideally suited to the autumn and winter months.”

Cater points out that CCE has in-vested heavily in its Schweppes brand, with a new range of two Schweppes sparkling juice drinks to help licensees tap into the popularity of adult soft drinks. “The new line-up in-cludes flavours such as Grapefruit & Blood Orange and Lemon & Elderflower variants, designed to cater for sophisticated palates and the growing trend in straight drinking. With only 20kcal per 100ml, the sparkling juice drinks are one of the lowest-calorie options of their kind in the adult special sector,” says Cater.

Also hitting the high notes of flavours while targeting the discerning consumer, Frobishers Fusion is available in 275ml bottles in three combinations: Apple & Mango, Apple & Raspberry and Orange & Passionfruit. All of these are more adventurous than varieties available in the category in previous years.

Turning to Shloer, Grabham says: “Being grape-based, Shloer Red Grape and White Grape are the popular choice for consumers looking for no-alcohol alternatives to wine; and the cold filtration process we use for Bottlegreen cordials and sparkling pressés is based on wine production techniques, enabling us to create flavours that are clean, crisp and delicate, and suited to the adult palate and can be matched with food because they complement rather than overpower the flavour of the dishes they are accompanying.”

With regard to Shloer, Grabham points out that “with the growth in popularity of sparkling wines such as Prosecco, Shloer Celebration Pink Fizz and White Bubbly, which feature popping corks, offer a premium no-alcohol alternative for those not drinking alcohol on special or celebratory occasions”. In essence, people don’t need to drink alcohol to feel a part of the celebration.

Innovation a key factor​

Grabham concludes: “Innovation is the key to growing this valuable sector of the market and we are currently looking at a number of initiatives that will open up even further opportunities for licensees to get creative with our brands. There is a clear commercial benefit to dining establishments stocking premium soft drinks.

“As well as meeting the consumer demand for greater choice, premium soft drinks tend to deliver higher margins than standard soft drinks, and they definitely enhance the dining experience for customers.”

Bottlegreen has also ventured into new territory with the launch of two flavoured tonic waters — elderflower and pomegranate — in 2013, and the range has been expanded during 2015 with the introduction of Bottlegreen ‘Classic’ Indian Tonic Water in the new year and Bottlegreen Light Tonic Water, which made its on-trade debut last month (August). Bottlegreen Naturally Light Indian Tonic Mixer has just 18kcal per 100ml delivering 31kcal per 175ml bottle.

In the meantime, Lucozade Ribena Suntory has reinvigorated its Orangina and outlined a £4m marketing campaign, entitled Life is Flat Unless You Shake It. This is prime example of how the category is pandering more towards the adult premium soft drinks arena, while also tapping into quirkiness, nostalgic flavours or retro appeal.

The brand relaunched into the on-trade in May with the primary aim of reminding people about “Orangina’s iconicity in the UK and tapping into consumers’ desire for premium and unique offerings”.

Does this mean we are at the beginning of a soft drinks renaissance? Are we looking backwards to look forwards? Are we drawing inspiration from the style and flavour cues of the past? Yes we are. The soft drinks renaissance is well under way.