Cordials and Squashes - UK - March 2021
Overview
 
Immunity support has considerable scope to appeal in cordials and squashes. As many as a third of drinkers are interested in variants that support immunity, this proposition largely unexplored currently in the category. 

The COVID-19 pandemic has hit total sales of cordials and squashes, which are estimated to have plunged by 13.1% in value in 2020. The record fall in on-trade sales in this market was entirely responsible for this slump and masks a strong retail performance. Although the new wave of lockdowns in early 2021 adds a further challenge for the recovery of the on-trade, sales are expected to rebound sharply in 2021. The strong image of the key players in the market and the role of cordials and squashes as affordable options will support growth during the income squeeze.

2020 provided a boost to the market,benefiting from homebound lifestyles, infrequent grocery shopping and cautious spending mentality, which has somewhat continued into 2021; however, much of this will be lost in 2022. With the children’s population declining, it remains imperative for operators to find ways to stay relevant to adults without children in the household. Premium versions and those with adult flavours offer means to encourage usage among this group. 

The sustainability trend, which is likely to gain extra momentum in the wake of the pandemic, presents an opportunity for the market; 56% of drinkers/buyers agree cordials/squashes are a more environmentally friendly choice than ready-to-drink soft drinks (eg fizzy drinks, juice drinks) while 38% of buyers are interested in buying a version with sustainable packaging. Cordials and squashes have an advantage over other soft drinks with regards to plastic waste and carbon footprint. Communicating this difference through marketing messages should help the category to further mine this benefit.

Key issues covered in this ReportReport
●	The impact of COVID-19 on the cordials and squashes market.
●	The outlook for the market in the re-emergence from the pandemic and recovery up to 2025.
●	The latest new product development (NPD) trends.
●	Consumers’ habits around drinking cordials and squashes.
●	Consumer behaviours and attitudes towards cordials and squashes.

COVID-19: Market context
The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn't until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December 2020, and with the Pfizer-BioNTech, Moderna and Oxford-AstraZeneca vaccines licensedlicensed for use in the UK, the government aims to offer a first dose of the vaccine to 32 million people by mid-April.

Economic and other assumptions
Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its March 2021 Economic and Fiscal Outlook Report. After the fall of 9.9% over the course of 2020, the scenario suggests that UK GDP will grow by 4% in 2021 and 7.3% in 2022. 

GDP isn’t expected to return to pre-COVID-19 levels until Q2Q2 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster-than-expected rollout of vaccines.

Unemployment is expected to peak at 6.5% in Q4Q4 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

Products covered in this Report
For the purposes of this Report, Mintel has used the following definitions:

●	A standard squash is typically a drink requiring dilution in the ratio one part concentrate to four parts water, whereas a double-concentrate typically dilutes in a 11:9 ratio.
●	Cordials tend to have a thicker consistency than squashes and require more water to dilute, typically with a ratio of 11:10. They tend to contain no preservatives, and often require chilled storage once opened. Brands include Bottlegreen and Belvoir.

However, the Report analyses squashes/cordials together, across the UK market, which is divided into two main channels:

●	Retail includes sales through all supermarkets/shops where the cordial/squash is bought concentrated and has to be diluted to taste off-premise.
●	On-premise refers to when squash/cordial is bought diluted ready to drink at pubs, bars and restaurants/cafés.

Pressés and juice drinks which are defined as ready to drink, including ones that carry the same brand names as cordials and squashes, eg Ribena, are excluded from the market size.