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Soft Drinks Review - UK - March 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Robust growth in 2018 was fuelled by the hot summer
Figure 1: UK soft drinks value sales, 2013-23
Spotlight on sugar ensures healthiness is on consumers’ radar for soft drinks
Plastic waste comes into the limelight
Widespread efforts to curb alcohol intake create opportunities for soft drinks
Companies and brands
Coca-Cola retains its unassailable top position
Industry responds to spotlight on packaging waste
Sugar and calorie claims climb further
Functional claims explore health and gut health
Low-sugar/sugar-free drinks took the lead in adspend in 2018
Britvic ups support for new adult squash and cordials
The consumer
Nearly everyone drinks soft drinks
Figure 2: Types of soft drink drunk and tap water drinking in the last month, December 2018
Recyclable packaging leads in driving a greener image for soft drinks
Figure 3: Factors seen to make soft drinks environmentally friendly, December 2018
Recyclability sparks the strongest associations
Figure 4: Perceptions of soft drinks packaging types, December 2018
Few people see CSDs or squash as flavoursome
Figure 5: Perceptions of selected soft drinks, December 2018
Plastic packaging waste concerns prompt half of users to limit these drinks
Figure 6: Attitudes towards soft drinks, December 2018
Health considerations lead when soft drinks step in for alcohol
Figure 7: Factors that would encourage choosing a soft drink instead of an alcoholic drink, December 2018
What we think
ISSUES AND INSIGHTS
Concerns over plastic packaging waste are putting users off
The facts
The implications
The onus is on operators to drive awareness of green aspects beyond packaging
The facts
The implications
Health considerations lead when soft drinks vie to step in for alcohol
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Robust growth in 2018 was fuelled by the hot summer
Spotlight on sugar ensures healthiness is on consumers’ radar for soft drinks
Plastic waste comes into the limelight
Widespread efforts to curb alcohol intake create opportunities for soft drinks
MARKET SIZE AND SEGMENTATION
Robust growth in 2018 was fuelled by the hot summer
Figure 8: UK soft drinks value sales, 2013-23
Fruit juice/juice drink volume sales hit by sugar concerns
Figure 9: UK soft drinks value sales, by category, 2013-23
Mixed performances in energy drinks, sports drinks enjoy an uplift
Squash and cordials
Bottled water
Carbonated soft drinks
Forecast methodology
MARKET DRIVERS
Spotlight on sugar ensures healthiness is on consumers’ radar for soft drinks
Soft Drinks Industry Levy came into force in April 2018
Most soft drinks users opt mostly for healthy drinks
PHE sets sugar reduction targets for juice- and milk-based drinks
Plastic waste scrutiny extends to soft drinks
Plastic waste comes into the limelight
Public water refill points aim to reduce single-use plastic waste
Deposit return schemes on the cards for England and Scotland…
…trialled by retailers, drinks companies and Windsor & Maidenhead
Tax aims to up the use of recycled plastic content
Drinks makers join Plastics Pact
2018 weather provides a boost for many drinks
Figure 10: UK sunshine hours, by season, 2013-18
Widespread efforts to curb alcohol intake create opportunities for soft drinks
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Coca-Cola retains its unassailable top position
Industry responds to spotlight on packaging waste
Sugar and calorie claims climb further
Functional claims explore health and gut health
Low-sugar/sugar-free drinks took the lead in adspend in 2018
Britvic ups support for new adult squash and cordials
MARKET SHARE
Coca-Cola retains its unassailable top position
Original Coke raises prices in response to SDIL
Figure 11: Leading brands’ sales in the UK retail soft drinks market, 2016-18
Diet Coke benefits from brand revamp
Coke Zero Sugar continues its strong performance
Leading energy drinks brands enjoy booming growth
Innocent and Tropicana feel the struggles of the fruit juice market
START-UPS AND DISRUPTORS CASE STUDY – UGLY DRINKS
Company overview
What is it?
Founded:
Company mission statement:
Founders’ story:
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 12: Ugly Drinks product range, February 2019
Media profile
Figure 13: It’s Time For The Ugly Truth, February 2019
Social media metrics
Figure 14: Social media metrics for Ugly Drinks as of February 2019
The brand’s view
Revenue in the last year (as of 1st December 2018):
Sources of funding and support
Target audience:
What consumer needs does the range meet?:
Product stockists
Looking to the future
START-UPS AND DISRUPTORS CASE STUDY – NIX & KIX
Company overview
What is it?
Founded:
Company mission statement:
Founders’ story:
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 15: Nix & Kix product range, February 2019
Media profile
Social media metrics
Figure 16: Social media metrics for Nix& Kix as of February 2019
The brand’s view
Sources of funding and support
Target audience
What consumer needs does the range meet?
Product stockists
Looking to the future
LAUNCH ACTIVITY AND INNOVATION
Industry responds to spotlight on packaging waste
Various operators up recycled content in packaging…
Figure 17: Evian references 50% recycled plastic on-pack, December 2018
…and look to partnerships to drive R&D…
…as well as recycling
Water brands look to cartons and cans
Figure 18: Examples of water packaging highlighting sustainability, 2018
PET holds its top position in new launches, glass and cans gain
Lucozade trials Ooho!’s edible packaging
Sugar and calorie claims climb further
SDIL sees sustained shift towards lower-sugar launches
Figure 19: Share of new sports & energy drinks, water, carbonated soft drinks, fruit drinks and cordials/squashes launches, by sugar content, 2015-18
Recipe changes fuelled by SDIL do not trigger low-sugar claims
Figure 20: Share of new soft sports & energy drinks, water, carbonated soft drinks, fruit drinks and cordials/squashes launches, low and zero-sugar and L/N/R calorie claims, 2014-18
Less sweet flavours take many forms
Unsweetened flavoured waters and vegetable ingredients cater to anti-sweet sentiment
Figure 21: Examples of drinks with less sweet and vegetable flavours, 2017-19
Flavoured waters seen as more tasty and exciting than unflavoured
Figure 22: Consumer perceptions of soft drinks launches with and without vegetables as a named flavour ingredient, April 2018-February 2019
Figure 23: Examples of drinks with vegetable flavours with strong perceptions as tasty, 2018-19
Hot flavours remain rare
Figure 24: Examples of drinks with spice flavours, 2017-18
Tea offers another means to explore less sweet flavours
Figure 25: Examples of drinks with tea flavours, 2018-19
Modest activity in drinks positioned as alcohol alternatives
Figure 26: Examples of drinks positioned as alcohol alternatives, 2018
Functional claims explore health and gut health
Pushing an active health positioning with vitamins…
…and protein and energy
Figure 27: Examples of drinks linking with an active health or protein proposition, 2017-18
Digestive claims draw on traditional ingredients and live bacteria
Figure 28: Examples of drinks pushing gut health associations, 2018
Leading brands continue to explore safe flavour twists
Colas with flavour twist explore berry flavours
Fanta looks to grape and Lucozade to apple
Figure 29: Examples of drinks launching fruity flavour variants, 2018
ADVERTISING AND MARKETING ACTIVITY
Low-sugar/sugar-free drinks took the lead in adspend in 2018
Figure 30: Above-the-line, online display and direct mail advertising expenditure on soft drinks, by category, 2015-18
The leading drinks groups continue to dominate spend
Figure 31: Above-the-line, online display and direct mail advertising expenditure on soft drinks, by leading advertisers, 2015-18
Coca-Cola focuses on taste of Original and Zero Sugar
Coke highlights its unchanged recipe as Soft Drinks Industry Levy arrives
Coke Zero Sugar focuses on taste with ‘First taste’ ad
‘One way or another’ puts the focus on Coke Zero offering a familiar brand experience
Updated take on the ‘Diet Coke break’ follows 2018 revamp of the brand
Figure 32: Diet Coke ‘Put Perfect on Ice’ ad, January 2019
Premier League partnership is in Coke ads’ spotlight in 2019
Coke updates Christmas push with social media campaign
Ad campaign looks to encourage recycling
Capri-Sun highlights new 50% less sugar recipe
Fanta drives online visibility by linking with social media influencers
Britvic ups support for new adult squash and cordials
Fruit Creations and Fruit Cordials ad campaigns focus on ‘grown-up’ positioning
Robinsons Fruit Shoot continues to celebrate children’s passions
‘Feel Good to be Free’ campaign supports 7UP Free overhaul
J2O focuses on social moments
PepsiCo puts adspend behind Pepsi Max and Tropicana
Pepsi Max relaunches taste challenge in 2018
Tropicana Essentials is PepsiCo’s focus in juice drinks
Lucozade Ribena Suntory steps up support for Lucozade and Ribena
Lucozade looks to tie-ups and continues “Energy beats everything”
Ribena offers music gig tickets
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Nearly everyone drinks soft drinks
Recyclable packaging leads in driving a greener image for soft drinks
Recyclability sparks the strongest associations
Few people see CSDs or squash as flavoursome
Plastic packaging waste concerns prompt half of users to limit these drinks
Health considerations lead when soft drinks step in for alcohol
SOFT DRINKS USAGE
CSDs lead, with fruit juice and squash the closest chasers
Figure 33: Types of soft drink drunk and tap water drinking in the last month, December 2018
Soft drinks usage reflects lifestyle patterns
Half of users report a daily soft drinks habit
Figure 34: Frequency of drinking soft drinks in the last month, December 2018
FACTORS SEEN TO MAKE SOFT DRINKS ENVIRONMENTALLY FRIENDLY
Packaging waste is front of mind for consumers
Figure 35: Factors seen to make soft drinks environmentally friendly, December 2018
Recyclability leads in boosting soft drinks’ green image
Use of recycled material offers a USP among two in five, tax will dilute USP
Figure 36: Pooch & Mutt Turkey & Duck Health Food for Adult Dogs packaging with environmental claims, September 2018
Other green aspects must build awareness
Figure 37: The Meatless Farm Co Meat Free Mince with on-pack environmental claims, November 2018
PERCEPTIONS OF SOFT DRINKS PACKAGING TYPES
Environmental issues are top of mind in packaging associations
Recyclability sparks the strongest associations
Figure 38: Perceptions of soft drinks packaging types, December 2018
Recyclability links closely with low perceptions of environmental baggage
Recyclability warrants visibility, but so do other environmental aspects
Glass bottles and aluminium cans have weak image as recyclable among younger groups
PERCEPTIONS OF SELECTED SOFT DRINKS
Few people say CSDs are flavoursome, compromising their core appeal
CSDs show a weak image as flavourful
Recent flavour NPD looks to be hitting a note
Figure 39: Perceptions of selected soft drinks, December 2018
CSDs’ strong treat image goes with weak everyday perceptions
16-24s are the most positive about CSDs
Squash/cordials trump CSDs on flavour, but just a third hold this view
Need to elevate flavour image
Hydration remains a strength to build on for squash/cordials
Fruit juice/juice drinks have a surprisingly low image as nutritious
Three in 10 see fruit juice/juice drinks as nutritious
Recent NPD dials up nutrition through fortification
ATTITUDES TOWARDS SOFT DRINKS
Plastic packaging waste concerns prompt half of users to limit these drinks
Doubts linger over the green credentials of recycling
Figure 40: Attitudes towards soft drinks, December 2018
Fizzy drinks refill stations appeal widely
Packaging concerns give only a moderate boost to making fizzy drinks at home
FACTORS THAT WOULD ENCOURAGE CHOOSING A SOFT DRINK INSTEAD OF AN ALCOHOLIC DRINK
Health considerations lead when soft drinks step in for alcohol
Figure 41: Factors that would encourage choosing a soft drink instead of an alcoholic drink, December 2018
A less sweet taste is more important than copying alcoholic drinks
Relaxing drinks would chime with one in four 18-34s
Herbal ingredients can help forge links with relaxation
Various brands push time out from hectic lifestyles in their marketing
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 42: Total UK value sales of soft drinks, best- and worst-case forecast, 2018-23
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 43: Share of new soft sports & energy drinks, water, carbonated soft drinks, fruit drinks and cordials/squashes launches, by package material, 2014-18
APPENDIX – ADVERTISING AND MARKETING ACTIVITY 
Figure 44: Above-the-line, online display and direct mail advertising expenditure on soft drinks, by highest-spending brands, 2015-18

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