Moving soft drinks upmarket

Remember the days of nondescript cola and lemonade from the tap, bottles of cheap and nasty orange juice that had sediment at the bottom of the bottle, and tomato juice that absolutely had to be disguised with lashings of Tabasco and Worcestershire Sauce if it was to be drinkable?

Soft drinks are often still an afterthought, but this is changing because of Millennials, health trends, sector innovators and enlightened licensees who are willing to try something new.

Tom Gaze, director of Cornish business Pollocks Pub Co, says soft drinks are following in the footsteps of craft beer: consumers are looking for something with a story attached or that offer an experience – such as a creatively made mocktails or a local, organic juice blend.

Gaze claims consumers are increasingly shying away from ubiquitous sugary options, and are instead looking for more sophisticated drinks.

“Already, you’re seeing the big alcohol manufacturers introduce alcohol-free versions of their products, as well as small innovative brands – such as the non-alcoholic distiller Seedlip, creating beverages that closely mimic their alcohol-based counterparts.”

“These products tend to focus on adult flavour profiles, typically associated with craft alcoholic beverages, such as hops, grapefruit, herbs and other botanicals.”

Seedlip, which comes in Garden 108 and Spice 94 variants sells well at the Nut Tree Inn, in Murcott, Oxfordshire, which garnishes them as if it were gin and tonic – cucumber and mint, or fresh peas in the Garden version.

The Nut Tree Inn serves 25ml of Seedlip with a splash of sugar syrup and then tonic.

It is not cheap. The pubs sells it for £4.95 – “a considered purchase”, says Imogen North, who runs the pub with chef-patron Mike North.

Price affects decision

CGA Peach BrandTrack points out that 46% of consumers say price affects their decision to drink ‘soft drinks’ when out – and £2.40 is the average price they say they are willing to pay.

Seedlip and its ilk, however, are not, strictly speaking, ‘soft’ drinks in the traditional sense, but rather non-alcoholic drinks that replicate the taste of a spirit. As Star Trek’s Mr Spock would have said: “It’s soft, Jim, but not as we know it.”

The Nut Tree Inn’s, addition of tonic, sugar syrup and garnishes, turns it into a mocktail, which adds value and commands the premium the pub charges.

Proof Drinks head of marketing Suneetha Adivihalli suggests non-alcoholic drinks are fast becoming the influential category with more alcohol brands developing alcohol-free versions of their popular alcoholic products.

She points to innovative brands such as Scavi & Ray and Pistonhead that have respectively developed alcohol-free and non-alcoholic versions of their alcoholic Spumante and dry-hopped lager.

Pollocks’ Tom Gaze says mocktails should be easy to find on your drinks menu – if you have one – and creatively promoted through social media channels with eye-catching bar displays or table strut cards.

Staff training is key. “Our servers are included in any new product tasting sessions so that they all have first-hand knowledge of the product and can confidently recommend alcohol-free drinks to please all tastes,” he says.

Kelley Walker, purchasing manager at buying group Beacon, says mocktails help operators give customers new exciting choices using ingredients they already stock, such as syrups, juices and mixers.

“As with cocktails, it is vital to get the serve right; customers expect a certain quality and experience from alcoholic cocktails, and this is the same for non-alcoholic alternatives,” she says.

“Operators should focus on high-quality, innovative glassware, as well as simple, fresh garnishes and great-quality ingredients.”

Craft drinks maker Fentimans marketing director Andrew Jackson, says authenticity is important – increasing numbers of people expect a wider
variety of adult soft drinks.

Botanical brewing

Fentimans uses a botanical brewing process to create products such as Rose Lemonade, Wild English Elderflower and Sparkling Lime & Jasmine.

CGA BrandTrack’s survey last summer shows almost half (48%) of soft drink consumers state they already do, or would be willing to, pay extra for a better quality drink. And 66% of consumers have visited a licensed venue on a night out and stayed off alcohol.

The opportunities are evident when considered alongside the 60% of soft drink consumers who agree they proactively try to lead a healthy lifestyle and the same proportion who agree they would like to see more healthy soft drinks on offer.

Jen Draper, head of marketing at Franklin & Sons, which produces a seven-strong range of traditional premium varieties that use “natural ingredients and no preservatives or sweeteners”, says the increased emphasis on premium spirits has filtered through to mixers and tonics – a trend that provides “unlimited opportunity for operators”.

It is “imperative” venues not only stock soft drinks, she says, but offer a diverse range that can be “built up to cater for non-drinkers”.

Innovation is in the ascendancy. Love Drinks, for example, like Seedlip, has seized on the popularity of craft gins and launched The Duchess, a ready-to-drink low-sugar non-alcoholic gin & tonic made from redistilled juniper berries and botanical-infused tonic water.

Jane Bulankina, the company’s trade marketing manager, says: “With the non-drinking trend rising among Millennials and the next generation, now is a key time for pubs and bars to start focusing on providing a suitable non-alcoholic alternative to the most health-conscious consumer.”

Simply offering juice, water or soda “just won’t cut it anymore,” she says. “We are seeing a wealth of interest... for great-tasting suitable alternatives to alcohol that offer complexity and depth of flavour.”

Coca-Cola European Partners (CCEP) believes the health and wellness trend will continue this year with more calorie consciousness and fitness-focused lifestyles.

“Choice is key, and licensees need to stock a variety of options, while offering lighter variants of their best-selling drinks when they can,” says trade communications manager Amy Burgess.

Jamie Blair, the Millennial founder of Roots Beverage Co, which has been experimenting with Kombucha, a variety of fermented, lightly effervescent black or green tea, notes that with the sugar tax coming into force in the UK from April, there is going to be a lot of focus on sugar content in soft drinks across the industry.

This, he says, has the potential to create a huge consumption change in the future. “As part of the Millennial generation myself, I would absolutely say that there is less consumption of alcohol across this demographic,” he says.

Paul Goldfinch, managing director at Polar Krush, which makes all of its products free of sugar and uses Stevia leaf to act as a ‘natural’ sweetener, agrees. “We have a commitment to our community and environment and this drink was produced as a direct response to the rising obesity crisis.”

The US will continue to influence trends at home, such as the likes of the Clamato tomato cocktail, which tapped into the growing 2017 trend of Bloody and Virgin Marys with its combination of Californian tomatoes and New England clam broth.

Percentage profit margins

Lawrence Mallinson, managing director of James White Drinks, producer of Big Tom spiced tomato juice, says percentage profit margins made on soft drinks in pubs have been exceptionally high.

“Cheap drinks priced high equals easy money. This has made it very hard for more expensive higher quality soft drinks to make much headway into the bar world.”

Mallinson says until there is a switch to focusing on cash margin per drink – “surely a truer measure of success” – the better quality of soft drinks so widely available in cafés and retailers will remain largely unseen in the on-trade.

“My advice is, therefore, to focus on cash margin and what your customers actually want, and you will achieve both happier customers and larger profits.”

Be as proud of your soft drink selection as you are proud of the selection of beers wines and spirits, he advises.

Luscombe Drinks founder and chairman Gabriel David, advises: “Try to stay away from what you might pick up in any supermarket. It’s competitive out there and we all need to offer an experience that people can’t simply duplicate at home having gone to a supermarket.”

Drink and food matching

One area not to be overlooked when it comes to non-alcoholic drinks is food matching, as Britvic commercial director for licensed and foodservice Russell Goldman says: “The eating-out occasion is going from strength to strength with figures showing the eating-out market in the UK was estimated to be worth an impressive £87.9bn in 2017 and is forecast to be worth a £89.3bn in 2018, after growth of 1.5% since 2017.

“This isn’t just about the 72,682 restaurants and fast food outlets in the UK in 2017, there are also 46,740 pubs and bars to take into account as the marketplace continues to become more and more competitive.

“Outlets must ensure they stay relevant by making sure they are delivering the right experience to their guests, and the food and drink offering is integral
to this.”

Consumers’ palates are becoming more sophisticated and attuned to new and interesting flavour combinations, he adds, advising operators use alcohol-free drinks to develop flavour combinations in dishes.”