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Carbonated Soft Drinks - UK - June 2015

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Forecast of total UK value sales of carbonated soft drinks, 2010-20
Market factors
Sugar concerns put pressure on CSDs
Falling alcohol consumption should have created opportunities for CSDs
Rising real incomes should support the market
Companies, brands and innovation
Diet brands buck the downward trend in CSDs
Figure 2: Leading brands’ shares in the UK retail carbonated soft drinks and adult soft drinks market, by value, 2014/15*
Coke retains innovation lead, new brands enter sparkling juice segment
Total adspend falls by £7.5 million in 2014
The consumer
CSD usage stands at almost 80%
Figure 3: Usage of carbonated soft drinks, by type, March 2015
Diet/light CSDs are drunk more frequently than standard ones
Figure 4: Usage of carbonated soft drinks, by frequency, March 2015
More than a quarter of non-diet CSD drinkers have cut back
Figure 5: Changes in usage of CSDs compared to a year ago, March 2015
Minority interest in more sparkling fruit juices
Figure 6: Attitudes/behaviours related to buying CSDs, March 2015
A third of users limit their non-diet CSDs due to sugar concerns
Figure 7: Health attitudes related to CSDs, March 2015
‘Less sugar’ is key all round
Figure 8: Further attitudes towards CSDs, March 2015
What we think
ISSUES AND INSIGHTS
A strong interest in lower-sugar CSDs without sweeteners
The facts
The implications
NPD offers growth opportunities in own-label CSDs
The facts
The implications
Whilst a low sugar content is important, so is the type of sweetener used
The facts
The implications
MARKET DRIVERS
Key points
Obesity crisis puts pressure on CSD operators…
…with sugar a focus in 2014…
…negatively impacting usage of CSDs
Operators should emphasise natural ingredients, including plant-derived sweeteners
CSDs have been well placed to capitalise on cutbacks on alcohol
Figure 9: Trends in UK per capita consumption of 100% alcohol, 2006-14
A rise in real disposable income should help to increase usage of CSDs
Figure 10: Financial wellbeing index, April 2009-April 2015
Innovation will be key in capitalising on demographic changes
Figure 11: Trends in the age structure of the UK population, 2009-14 and 2014-19
Rise in older cohorts poses a challenge for the CSD market
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Coca-Cola leads NPD for the fifth year
Figure 12: New product launches within the UK carbonated soft drinks market, by ultimate company (top 10), 2010-14
Figure 13: Share of new product launches within the UK CSD market, branded vs own-label, 2010-14
Coca-Cola Life should appeal to the third of adults who limit CSD intake due to sugar concerns
Own-label makes a strong start in 2015
More than a third of new products carry a low/no/reduced calorie claim
Figure 14: Share of new product launches within the UK CSD market, by top 10 claims, 2010-14
The increase in all-natural claims should be well received
Zeo cuts calories and focuses on natural ingredients in range revamp
Canned CSDs increase their share in the NPD landscape
Figure 15: Share of new product launches within the UK CSD market, by packaging type, 2010-14
Citrus and Tropical fruits were popular flavour choices in 2014
Healthy canned drinks look to superfoods for flavour inspiration
The rise in sparkling fruit juice NPD seems well timed
MARKET SIZE AND FORECAST
Key points
Carbonated soft drink volumes look set to continue to fluctuate
Figure 16: UK total value and volume sales of carbonated soft drinks 2010-20
Figure 17: Forecast of total UK value sales of carbonated soft drinks, 2010-20
Figure 18: Forecast of total UK volume sales of carbonated soft drinks, 2010-20
Retail sales are expected to see steady but modest growth
Figure 19: UK retail value and volume sales of carbonated soft drinks, 2010-20
On-premise sales
Figure 20: UK on-premise value and volume sales of carbonated soft drinks, 2010-20
Forecast methodology
SEGMENT PERFORMANCE
Key points
Diet/light drinks kept cola carbonates afloat
Mixers hold their own in a flat market
Figure 21: Off-trade value and volume sales of carbonated soft drinks and adult soft drinks, by type, 2013 and 2014
MARKET SHARE
Key points
Coca-Cola retains top position, Coke brands take 39% of market by value
Figure 22: Leading brands’ shares in the UK retail carbonated soft drinks and adult soft drinks market, by value, 2014/15*
Regular Coca-Cola loses share
Regular Pepsi loses out to Pepsi Max
Fanta doesn’t escape the sugar scare
Schweppes’ sales take a hit as CCE reduces adspend
Figure 23: Leading brands in the UK retail carbonated soft drinks and adult soft drinks market, by value, 2013/14 and 2014/15
Figure 24: Leading brands in the UK retail carbonated soft drinks and adult soft drinks market, by volume, 2013/14 and 2014/15
Figure 25: Leading manufacturers in the UK retail carbonated soft drinks and adult soft drinks market, by value, 2013/14 and 2014/15
Figure 26: Leading manufacturers in the UK retail carbonated soft drinks and adult soft drinks market, by volume, 2013/14 and 2014/15
COMPANIES AND PRODUCTS
AG Barr
Background
Recent activity
Product range and innovation
Advertising and promotion
Britvic Plc
Background
Product range
Product innovation
Advertising and promotion
Coca-Cola
Background
Product range
Product innovation
Recent activity and promotion
Fentimans
Background
Product range and innovation
Recent activity and promotion
PepsiCo
Background
Product range and product innovation
Recent activity and promotion
SHS Group
Background
Product range
Product innovation
Recent activity and promotion
BRAND COMMUNICATION AND PROMOTION
Key points
Total adspend falls by £7.5 million in 2014
Figure 27: Main monitored advertising spend on carbonated soft drinks, 2011-14
Figure 28: Main monitored media advertising expenditure in the UK carbonated soft drinks market, by top 10 advertisers*, 2011-14
After a year off, D&G Drinks brings Old Jamaica Ginger Beer back to our screens
Adspend on regular Coca-Cola halves as the focus moves to Diet Coke and Coca-Cola Life
Figure 29: Main monitored media advertising expenditure on carbonated soft drinks, by top 10 brands*, 2011-14
Figure 30: Main monitored media advertising expenditure in the UK carbonated soft drinks market, by media type, 2011-14
Coca-Cola invests £3.6 million in supporting the launch of new brand Coca-Cola Life
Total TV adspend fell by 31% in 2014
PepsiCo drives outdoor adspend
BRAND RESEARCH – CARBONATED SOFT DRINKS
What you need to know
Brand map
Figure 31: Attitudes towards and usage of selected brands, April 2015
Key brand metrics
Figure 32: Key metrics for selected brands, April 2015
Brand attitudes: Coca-Cola Life provides something different from other brands
Figure 33: Attitudes, by brand, April 2015
Brand personality: Fentimans’ price and product range promotes greater exclusivity
Figure 34: Brand personality – macro image, April 2015
Coca-Cola, Pepsi and Fanta most associated with taste
Figure 35: Brand personality – micro image, April 2015
Brand analysis
Fentimans’ sophisticated image promotes a particularly different proposition
Figure 36: User profile of Fentimans, April 2015
Coca-Cola is likely to maintain its strong position as most drunk brand
Figure 37: User profile of Coca-Cola, April 2015
Fanta flavours appear particularly appealing to younger consumers
Figure 38: User profile of Fanta, April 2015
Coca-Cola Zero has yet to fully develop trust from consumers
Figure 39: User profile of Coca-Cola Zero, April 2015
Coca-Cola Life has a more ethical image than other Coca-Cola brands
Figure 40: User profile of Coca-Cola Life, April 2015
Pepsi Max has similarity to Coca-Cola Zero but struggles to match its performance
Figure 41: User profile of Pepsi Max, April 2015
Pepsi struggles to match strength of perception of Coca-Cola
Figure 42: User profile of Pepsi, April 2015
Irn-Bru driven forward by Scotland
Figure 43: User profile of Irn-Bru, April 2015
THE CONSUMER – USAGE OF CSDS
Key points
CSD usage reaches almost 80%
Figure 44: Usage of carbonated soft drinks, by type, March 2015
Diet/light CSDs are drunk more frequently than standard ones
Figure 45: Usage of carbonated soft drinks, by frequency, March 2015
More than a quarter of non-diet CSD drinkers have cut back
Figure 46: Changes in usage of CSDs compared to a year ago, March 2015
CSD consumption is most prevalent at home
Figure 47: Usage of carbonated soft drinks, by location, March 2015
Cola holds strong as the most popular CSD flavour
THE CONSUMER – ATTITUDES TOWARDS CSDS
Key points
Own-label CSDs enjoy high usage but modest sales
Figure 48: Attitudes/behaviours related to buying CSDs, March 2015
Opportunity to increase purchases of own-label CSDs with NPD
Boosting the offering of sparkling fruit juice would appeal
A third of users limit their intake of non-diet CSDs due to sugar concerns
Figure 49: Health attitudes related to CSDs, March 2015
One in four use light CSDs as healthy alternative when craving something sweet
THE CONSUMER – FURTHER ATTITUDES TOWARDS CSDS
Key points
‘Less sugar’ is key all round
Figure 50: Further attitudes towards CSDs, March 2015
The type of sweetener is important to consumers
A strong preference for low sugar without sweeteners
Cutting sugar is an option as many see CSDs as too sweet
The power of branding prevails
APPENDIX – WHO’S INNOVATING?
Figure 51: Share of new product launches within the UK CSD market, branded vs own-label, 2011-15
APPENDIX – MARKET SIZE AND FORECAST
Figure 52: Best and worst case forecasts for the total UK carbonated soft drinks market, by value, 2015-20
Figure 53: Best and worst case forecasts for the total UK carbonated soft drinks market, by volume, 2015-20
Figure 54: Best and worst case forecasts for the UK retail carbonated soft drinks market, by value, 2015-20
Figure 55: Forecast of UK retail sales of carbonated soft drinks, by value, 2010-20
Figure 56: Best and worst case forecasts for the UK retail carbonated soft drinks market, by volume, 2015-20
Figure 57: Forecast of UK retail sales of carbonated soft drinks, by volume, 2010-20
Figure 58: Best and worst case forecasts for the UK on-premise carbonated soft drinks market, by value, 2015-20
Figure 59: Forecast of UK on-premise sales of carbonated soft drinks, by value 2010-20
Figure 60: Best and worst case forecasts for the UK on-premise carbonated soft drinks market, by volume, 2015-20
Figure 61: Forecast of UK on-premise sales of carbonated soft drinks, by volume, 2010-20

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