Carbonated Soft Drinks - UK - June 2018

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
2018 sees levy fuel value growth
Figure 1: UK value sales of carbonated soft drinks, 2013-23
Cola retains the lead, with prices rising, but volumes falling
Figure 2: Retail value and volume sales of carbonated soft drinks, by segment, 2017
Mixers see the strongest growth
Scrutiny of sugar continues to affect the market
Environmental impact of plastic hits the news
Pay squeeze eases
Offering an alternative to alcohol
Companies and brands
Coca-Cola Zero Sugar and Pepsi Max see strong growth
Figure 3: Leading brands’ shares in the UK retail carbonated soft drinks market, by value, 2017/18*
Britvic sees value and volumes fall for J2O, while premium brands perform well
Figure 4: Leading brands’ shares in the UK retail adult soft drinks market, by value, 2017/18*
Sugar is an ongoing focus of NPD
New flavours hope to appeal to adventurous consumers
Advertising spend reaches a four-year high in 2017
Coca-Cola stands out as the most trusted CSD cola brand
The consumer
Usage of diet CSDs matches that of non-diet
Figure 5: Usage of carbonated soft drinks, by diet/light and non-diet, March 2018
Opportunities to push British angle
Figure 6: Interest in selected carbonated soft drink products, March 2018
Soft drinks levy influences sugary CSDs’ image of healthiness
Figure 7: Attitudes towards healthiness of carbonated soft drinks, March 2018
CSDs fail to deliver on refreshment and flavour
Figure 8: Correspondence analysis of qualities associated with selected types of soft drinks, March 2018 
Only a minority look at ingredients or recycling information
Figure 9: On-pack details checked when selecting carbonated soft drinks, March 2018
What we think
ISSUES AND INSIGHTS
Attention on sugar prompts switching
The facts
The implications
A focus on environmental efforts would give brands a competitive edge
The facts
The implications
NPD on flavour offers a way to appeal to a wider audience
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
2018 sees levy fuel value growth
Modest volume growth predicted, inflation to prop up value sales
Cola retains the lead, with prices rising, but volumes falling
Mixers see the strongest growth
Scrutiny of sugar continues to affect the market
Environmental impact of plastic hits the news
Pay squeeze eases
Offering an alternative to alcohol
MARKET SIZE AND FORECAST
Value sales rise, while volumes dip
Figure 10: UK value sales of carbonated soft drinks, 2013-23
Value sales to continue to rise
Figure 11: UK value sales of carbonated soft drinks, by retail and on-premise, 2013-23
Figure 12: UK volume sales of carbonated soft drinks, by retail and on-premise, 2013-23
Sugar levy dampens retail volume sales
Figure 13: UK retail value sales of carbonated soft drinks, 2012-23
On-premise to see volumes dip
Figure 14: UK on-premise value sales of carbonated soft drinks, 2013-23
Forecast methodology
MARKET SEGMENTATION
Cola retains the lead, with prices rising but volumes falling
Figure 15: Retail value and volume sales of carbonated soft drinks and adult soft drinks, by segment, 2015-17
Mixers see the strongest growth
MARKET DRIVERS
Scrutiny of sugar continues to affect the market
The number one health foe
Government introduces the Soft Drinks Industry Levy
Many brands take action to reformulate, while some not doing so pass on the rise
The levy could encourage switching to healthier varieties
Environmental impact of plastic hits the news
Companies take steps to address plastic waste
Clarity in demand among consumers
Government proposes 25-year plan to reduce plastic packaging waste
Water refill points
Support for deposit return schemes
Scotland to introduce Deposit Return Scheme to tackle plastic waste
Pay squeeze eases
Figure 16: Annual percentage change in CPI and AWE (regular pay), by month, January 2012-March 2018
Offering an alternative to alcohol
Figure 17: Attitudes towards health and alcoholic drinks, November 2017
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Coca-Cola Zero Sugar and Pepsi Max see strong growth
Coca-Cola retains top position
Britvic sees value and volumes fall for J2O, while premium brands perform well
Sugar is an ongoing focus of NPD
New flavours hope to appeal to adventurous consumers
Advertising spend reaches a four-year high in 2017
Coca-Cola stands out as the most trusted CSD cola brand
MARKET SHARE
Selected no-sugar varieties see strong growth
Coca-Cola Zero Sugar sees sales jump as Coca-Cola and Diet Coke suffer volume falls
Coca-Cola retains top position
Schweppes helped by adspend
Figure 18: Leading brands’ sales and shares in the UK retail carbonated soft drinks market, by value and volume, 2016/17 and 2017/18
Pepsi Max sales continue to eclipse standard Pepsi
Irn-Bru sees sales rise
Fever-Tree more than doubles sales
Figure 19: Leading manufacturers’ sales and shares in the UK retail carbonated soft drinks market, by value and volume, 2016/17 and 2017/18
Britvic sees value and volumes fall for J2O
Premium brands perform strongly
Figure 20: Leading brands’ sales and shares in the UK retail adult soft drinks market, by value and volume, 2016/17 and 2017/18
LAUNCH ACTIVITY AND INNOVATION
Sugar is an ongoing focus
Figure 21: New product launches in the UK carbonated soft drinks market, by the low/no/reduced sugar claim, 2014-18
Figure 22: Brands combine L/N/R sugar claims with functional health benefits, 2017
New flavours hope to appeal to adventurous consumers
Figure 23: Coca-Cola launches new flavours, 2018
Less sweet flavours
Figure 24: The London Essence mixers hit the market, 2017
Premium launches rise
Figure 25: New product launches in the UK carbonated soft drinks market, by the premium claim, 2014-18 (sorted by 2017)
Brands look to appeal to consumers eschewing alcohol
Figure 26: CSDs look to alcoholic drinks-inspired packaging, 2018
Slimline cans offer a point of difference
Figure 27: Slimline cans support a premium positioning, 2017
Craft term adopted to denote quality
Figure 28: Craft term is used in packaging, 2018
Environmentally friendly packaging is the top claim
Figure 29: New product launches in the UK carbonated soft drinks market, by the Ethical – Environmentally Friendly Package claim, 2014-18 (sorted by 2017)
ADVERTISING AND MARKETING ACTIVITY
Advertising spend reaches a four-year high in 2017
Figure 30: Total above-the line, online display and direct mail advertising expenditure on carbonated soft drinks, by advertiser, 2014-18 (sorted by 2017)
Coca-Cola continues to lead advertising
Coke celebrates original recipe, despite the Soft Drinks Industry Levy
Coca-Cola encourages recycling with a Love Story
Diet Coke rebrands…
…and looks to influencer marketing
Coke Zero Sugar focuses on experiences…
…and links up with movie franchise
Figure 31: Coca-Cola links up with Star Wars for on-pack promotion, 2017
Coca-Cola partners with FIFA for the 2018 World Cup
Coca-Cola continues ParkLives sponsorship
Schweppes supports Tonics range
Fanta looks to Halloween
Pepsi Max also focuses on taste and breaking with tradition
Fentimans rebrands to push superior taste
Irn-Bru looks to escapism with controversial ad in Scotland
Sanpellegrino showcases Italian lifestyle with weather-triggered OOH campaign
Nielsen Ad Intel coverage
BRAND RESEARCH
What you need to know
Brand map
Figure 32: Attitudes towards and usage of selected brands, May 2018
Key brand metrics
Figure 33: Key metrics for selected brands, May 2018
Brand attitudes: Coca-Cola stands out as offering consistently high quality
Figure 34: Attitudes, by brand, May 2018
Brand personality: Fentimans seen as most exclusive while the others offer accessibility
Figure 35: Brand personality – Macro image, May 2018
Coca-Cola and Pepsi are seen to be traditional and authentic
Figure 36: Brand personality – Micro image, May 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Usage of diet matches that of non-diet
Opportunities to push British angle
Soft drinks levy influences sugary CSDs’ image of healthiness
CSDs fail to deliver on refreshment and flavour
Only a minority look at ingredients or recycling information
USAGE OF CARBONATED SOFT DRINKS
Usage of diet matches that of non-diet
Figure 37: Usage of carbonated soft drinks, by diet/light and non-diet, March 2018
Extensive crossover in non-diet and diet
Figure 38: Crossover in usage of non-diet and diet/light carbonated soft drinks, March 2018
Young opt more for non-diet, over-55s more for diet versions
Figure 39: Usage of non-diet and diet/light carbonated soft drinks, by age, March 2018
Figure 40: Preference for sweeteners as an ingredient in carbonated soft drinks, by age, March 2018
Diet/light versions are drunk more frequently
Figure 41: Frequency of drinking carbonated soft drinks, by type, March 2018
Home is the most popular venue to drink CSDs
Figure 42: Usage of carbonated soft drinks, by location, March 2018
36% drink CSDs in restaurants/pubs/bars
29% drink CSDs on the go
INTEREST IN PRODUCT FEATURES 
Opportunities to push British angle
Figure 43: Interest in selected carbonated soft drink products, March 2018
Figure 44: Coca-Cola emphasises location of production, 2018
Non-sweet flavours appeal to 23%
Blends add excitement to existing products
Spice and botanical flavours garner interest among a fifth
ATTITUDES TOWARDS CARBONATED SOFT DRINKS 
Soft drinks levy influences sugary CSDs’ image of healthiness
Figure 45: Attitudes towards healthiness of carbonated soft drinks, March 2018
Few CSDs users have noticed reformulation
…but this could come with pitfalls
Figure 46: Attitudes towards carbonated soft drinks, March 2018
Focus on environmental issues could pose a threat
51% of CSD users prefer glass/cans to plastic packaging
Widespread uncertainty over what packaging is best for the environment
Figure 47: Agreement with the statement ‘It’s hard to tell what packaging is most environmentally friendly, March 2018
Opportunity for CSDs to tap into popularity of flavoured waters
QUALITIES ASSOCIATED WITH SELECTED SOFT DRINKS 
CSDs fail to deliver on refreshment and flavour
Opportunity for non-sweet flavours
Figure 48: Correspondence analysis of qualities associated with selected types of soft drinks, March 2018 
Figure 49: Qualities associated with selected types of soft drinks, March 2018 
Perceived artificiality is a barrier
Figure 50: Preferences for sugar and sweeteners in carbonated soft drinks, March 2018
Methodology
WHAT PEOPLE CHECK ON CSD PACKS
Only a minority look at ingredients or recycling information
Figure 51: On-pack details checked when selecting carbonated soft drinks, March 2018
Flavour, type and brand are most important
Figure 52: Those checking brand on-pack when selecting carbonated soft drinks, by age, March 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Total
Figure 53: UK volume sales of carbonated soft drinks, 2013-23
Figure 54: UK value sales of carbonated soft drinks, best- and worst-case forecast, 2018-23
Figure 55: UK volume sales of carbonated soft drinks, best- and worst-case forecast, 2018-23
Retail
Figure 56: UK retail volume sales of carbonated soft drinks, 2013-23
Figure 57: UK retail value sales of carbonated soft drinks, best- and worst-case forecast, 2018-23
Figure 58: UK retail volume sales of carbonated soft drinks, best- and worst-case forecast, 2018-23
On-premise
Figure 59: UK on-premise volume sales of carbonated soft drinks, 2013-23
Figure 60: UK on-premise value sales of carbonated soft drinks, best- and worst-case forecast, 2018-23
Figure 61: UK on-premise volume sales of carbonated soft drinks, best- and worst-case forecast, 2018-23
Forecast methodology
APPENDIX – LAUNCH ACTIVITY AND INNOVATION 
Figure 62: New product launches in the UK carbonated soft drinks market, by top ten companies, 2014-18 (sorted by 2017)
Figure 63: New product launches in the UK carbonated soft drinks market, by the environmentally friendly packaging claim, 2014-18
APPENDIX – ADVERTISING AND MARKETING ACTIVITY
Figure 64: Total above-the line, online display and direct mail advertising expenditure on carbonated soft drinks, by brand, 2014-18 (sorted by 2017)
APPENDIX – USAGE OF CARBONATED SOFT DRINKS 
Figure 65: Ingredient preferences in relation to carbonated soft drinks, March 2018
Figure 66: Usage of carbonated soft drinks, by location, by type, April 2018