Low calorie, no added sugar and sugar-free are the buzzwords being bandied about in the soft drinks industry in response to concerns about health and rising obesity levels, which are constantly being flagged up.
This is raised in Mintel’s 2014 report on carbonated soft drinks, which states that 25% of Brits are consuming less fizzy drinks, rising to 34% of those aged 16-24, because of concerns about high sugar content and artificial sweeteners, resulting in many companies switching to the natural sweetener, stevia, to offset these worries.
The British Soft Drinks Association (BSDA) confirms this in its 2014 report, which states “companies are investing heavily in sugar-free alternatives”.
Examples include last year’s launch of Coca-Cola Life containing a blend of sugar and stevia, which delivers a third less sugar and fewer calories than Coca-Cola, and Britvic now only producing a no added sugar variety of Fruit Shoot.
In spite of fizzy drinks being given the thumbs down, carbonates remains the largest sector, accounting for almost half the market, followed by dilutables (22%), bottled water (16%), still and juice drinks (10%), and fruit juice (7%).
Consultant Zenith International, which compiled the data for the BSDA report, reveals that warm weather played a big role in soft drinks uptake. In 2013, volumes rose 2% to more than 14.5 billion litres, and value rose by more than 4% to £15.6bn, and there are high expectations for the 2014 figures after an equally good summer.
Britvic’s 2014 Soft Drink Review echoes this view; it too says the soft drinks sector benefited from long spells of warm weather throughout July and September, and that soft drinks as a whole saw value growth. Its analysis shows the grocery/convenience sector increased 0.4% in value sales to £7.6bn, while on-premise sales rose by 3.6% to £4.2bn.
“Shaped by consumer trends such as pleasure seeking, the increasing focus on the wider health agenda, marketing and legislation, and the demand for added value out of every experience, the manufacturers who have been the most successful have been the ones who have invested in innovation, as well as reformatting to provide low or no-calorie variants,” comments Britvic managing director Paul Graham.
One of the winners last year was frappés and iced coffee thanks to consumers’ interest in more innovative refreshments. Britvic’s report says the iced drinks category achieved the highest growth for the fifth year running, albeit from a smaller base compared to other drinks, up 30.7% to £68m and volume by 28.5%. Particular stars in this segment were Lipton Ice Tea and Starbucks.
Steph Goldie, brand manager for DaVinci Gourmet, says that 19% of frappé drinkers maintain a purchase pattern throughout the year, and, at an average profit of 34%, frappés can be highly profitable. It has responded by launching frappé powder mixes, which come in coffee, mocha and vanilla bean flavours. She says the added benefit is that operators can upsell these with food.
“Smoothies are another profitable category; just like frappés they can be served as drink-in or ‘to go’ options, supporting impulse sales,” adds Goldie.
Tate & Lyle Sugars has recently entered the market with Fairtrade beverage syrups that can be used to make frappés and soda based drinks. The first to arrive are vanilla, caramel and hazelnut in 750ml bottles, which will be followed by chocolate, spiced chai, strawberry, raspberry and mango.
In addition, Britvic is putting its weight behind the Teisseire syrup brand.
Another trend is cafés using professional blenders to produce bespoke healthier soft drinks from scratch. Michael Eyre, product director at Jestic Foodservice Equipment, which supplies Vitamix BarBoss Advance and The Quiet One blenders, says that operators are beginning to see opportunities to increase sales, attract a more diverse customer base and offer seasonal menus.
Heather Beattie, brand manager at Nisbets for Waring and Santos blenders, believes healthier drinks and limited edition flavours or ‘flavour of the day’ also encourage purchase. “Making drinks in front of customers is a key selling feature; customers enjoy the theatre associated with it,” she explains.
Steve Carter, sales and marketing director for Frobishers’ juices, says that as well as new, healthier alternatives, consumers want more premium brands, plus well-thought out soft drinks menus that reflect types of outlet.
Interest has grown in the cherry flavour the company launched last year, while its other juice flavours like orange, pineapple, grapefruit and its signature bumbleberry – a mix of strawberry, raspberry, blackberry and blackcurrant purée – are a staple in many outlets, he adds.
Another area Carter believes is ripe for growth is mocktails. “We recently launched a set of easy-to-make mocktails using our juices as part of our ‘Unusual Suspects’ campaign, designed to help café owners think more imaginatively about the drinks they offer,” he says. “Mocktails can command a higher price point than a single serving of premium juice. We recommend selling ours for a minimum of £3 each which, with the addition of a few low cost ingredients and garnishes, could elevate the gross profit by up to 40% per drink.”
Peros marketing manager Louise Whitaker recommends blended drinks, which offer flexibility, innovation and the margin that operators need. For example, she says an iced chai made with milk, and an innovative blend of cinnamon, cardamom and cloves, makes a refreshingly different caffeine-free cold drink. It can also be blended with soya milk and garnished with on-trend flavours such as salted caramel for incremental value.
“Customers love new flavours and ideas, so aim to maximise range flexibility from core ingredients,” she advises. “Taking this approach, operators can build their own drinks menus at a range of price points, tailored to particular sites and customer base. As a result, average margins can be very high.”
Pritchitts says Modern Milk made with natural flavourings, semi-skimmed milk and added vitamin D in chocolate with fudge, coffee with vanilla, and strawberry with cream flavours, is a healthier alternative to fizzy drinks. Simon Muschamp, head of marketing, says the product combines the nutritious power of milk with popular flavours, making it the smart choice for cafés.
The company says that a 1,000-consumer taste test revealed that 95% liked the range and 84% said they would purchase it again. It also comes in a 330ml recyclable carton with a straw, making it suitable for vending machines and drinking on the go.