Take-home market

Premium mix and healthier options keep sales growing

The premium-priced glucose and stimulant drinks, sports drinks and smoothie categories saw the highest value share growth, benefiting from the health and wellbeing trend. Pure juice also experienced an uplift that brought it closer to the largest subcategory, cola. And although the trend towards naturalness helped increase volumes of still drinks, it was carbonates that pushed up sales value - led by glucose and stimulant energy drinks and new pack formats.

The trend towards naturalness took some of the impetus out of diet/no-added-sugar variants as some consumers opted for natural sugar over artificial sweeteners. The drinks that lost most ground were arguably the most weather-dependent: lower-priced bottled water, fruit carbonates and squashes.

Cola

Regular cola holds the fort

Cola held on to its market-leading 21% value share. Value growth of 2% to £1.25bn matched its 2006 performance. The year’s success stories were the regular colas as consumers took a more balanced approach to their cola drinking repertoire. Pepsi’s 4% brand growth was driven by regular Pepsi, whose 9% growth brought sales to £83m – close behind Pepsi Max, whose sales grew 2% to £85m. Over at CCE regular Coke kept growth in line with the market as Diet Coke’s sales were cannibalised by Coke Zero.

Pure juice

Closing in on cola

Pure juice is still the No2 sub-category, but continues to gain ground on front-runner cola as consumers aim for healthier lifestyles and more natural products. It now has 17% of take-home sales, against cola’s 21%. Although growth slowed in 2007, a 5% increase took total sales to £1.04bn. Private label still dominates, taking 60% of total value. But premium pure juice brands performed well: Tropicana pushed sales up 9% to £233m and Copella grew 27%. By contrast, Del Monte struggled: sales dropped 24% to £16m. New brands also did well: in the year’s top 10 soft drinks launches, Robinsons Fruit Shoot 100% juice took fifth place.

Juice drinks

Oasis and Robinsons Fruit Shoot beat the slowdown

After 7% growth in 2006, juice drinks slowed last year but maintained 1% growth to £671m. The picture would have looked less positive without Oasis and Robinsons Fruit Shoot. Oasis had an excellent year, with 21% growth taking sales to £78m – hot on the heels of No1 kids’ juice drink Robinsons Fruit Shoot, which increased sales 5% to £79m.

Glucose and stimulant drinks

Still boosting performance

As consumers looked to drinks with functional benefits, glucose and stimulant drinks were the big success story. New buyers flooded into the sub-category, and 31% of the British population now buy glucose and stimulant drinks at least once a year. Sales value grew 25% to £481m, making this the fourth biggest sub-category with an 8% market share. Glucose drinks grew 18% and stimulant drinks grew 33%, and they now share the market 50/50. Lucozade Energy remains the brand leader, with sales up 14% to £221m. But the biggest beneficiary of consumers’ thirst for functional benefits was Red Bull, with sales up £31m (23%) to £170m. New contender Relentless made a decent start, slotting in at No4 with sales of £20m.

Plain water

Poor summer halts growth

In a wet and cold summer, water didn’t look so appealing to consumers. After years of strong growth, sales dropped 3% to £463m; among the top three brands only Evian managed to grow (up 4%). Private label was hit particularly hard, with sales down 7% to £118m. New contender Drench managed to maintain forward momentum in the impulse sector, lifting sales 51% in its second full year.

Fruit carbonates

Down overall, but 7UP up

The decline in this sub-category has continued to slow. Last year sales value fell 2% to £438m, with consumers purchasing less frequently. Lemon and lime drinks were again the brightest spot, with 7UP scoring a 14% rise in sales value to £28m and Sprite adding 1% to £57m. Dr Pepper also achieved 3% growth to £62m.

Squash

Brand leader gains share in tough market

The poor summer impacted on squash sales, as it did bottled water, with sales value down 7% to £435m. Consumer preference for no-added-sugar meant sales of these squashes held firm while regular squashes took most of the hit. It was a good year for the leading brand Robinsons, which gained share to take 42% of the market with sales of £184m, while Ribena’s sales slipped 10% to £49.6m.

Dairy and dairy substitute

Flavoured milk rises, others stall

After several years of growth, dairy drinks appear to have peaked. Sales value dropped 3% in 2007 to £379m. Probiotics, last year’s dairy heroes, led the decline with a 9% fall in both volume and value. Sales of Muller Vitality dropped 14% to £35m, narrowing the gap for third-placed Frijj, whose sales grew 1% to £31m. Flavoured milk bucked the trend, maintaining 7% value growth overall to account for a third of the sub-category – with Mars and Yazoo raising sales value by 40% and 11% respectively.

Smoothies

Fastest-growing again

After doubling in 2006, value growth slowed last year. But a 31% increase meant smoothies were still the fastest-growing sub-category – ahead of next-best glucose and stimulant drinks, albeit on a much smaller base. Last year’s sales totalled £214m – of which brand leader Innocent took a majority 66%, growing sales by 47%.

Sports drinks

Still growing energetically

Sports drinks continued to grow well, following 28% growth in 2006 with 16% last year to £154m. Exercise is a significant part of maintaining a balanced approach to health and sports drinks tap into that growing lifestyle choice. The No1 brand remains Lucozade Sport, growing 15% with sales of £102m. Powerade is still a distant No2 but grew quickly (39%) last year to achieve £31m sales.

Water plus

Functional water takes off

After double digit growth in 2006, sales of water plus (water with flavours or functional ingredients) declined 11% to £154m in 2007. This decline was driven by flavoured water, accounting for 99% of the sub-category, which was particularly hard hit by the poor summer weather. Private label bore the brunt of the sales losses, declining 17% to £55m. Volvic Touch of Fruit also suffered, with sales down 16% to £49m. One success story was Robinsons Fruit Shoot H2O, up 54% to £17m.

Functional water, which offers added benefits such as vitamins or energy and includes brands such as Vitsmart and Carpe Diem botanics, represents the remaining 1% of the sub-category. In 2007 it only accounted for sales of £2m – but that was almost double the previous year’s performance (up 94%) and functional water looks set to become increasingly important.

Non-fruit carbonates

Brands add value

Brands outperformed private label in this sub-category, too. While volume only grew 2%, sales grew 3% in value to £146m. The reason: loyal consumers drove value growth for branded products, led by 6% for Irn Bru and 9% for Shandy Bass. Private label products took the hit, with sales down 5% by value.

Lemonade

Consumers support premium brands

Price increases helped premium lemonades maintain sales and confirmed that consumers are ready to pay for quality: while volumes were down 6%, sales value declined only 2% to £135m. Here again, private label was the main loser, with sales down 8% to £62m. Meanwhile, Schweppes maintained its growth, with sales up 8% to £53m thanks to a strong performance in grocery multiples.

Traditional mixers

Private label moves up in the mix

After a flat year in 2006, mixers fared better in 2007. A 3% lift in both value and volume took sales to £108m. And by contrast with the previous three sub-categories it was private label that made the running, with sales value up by 8%, while Canada Dry sales value slipped 6%.

Cold hot drinks

Iced coffee feels the chill

The poor summer did no favours to cold hot drinks – mainly iced tea and iced coffee. Sales declined 23% in 2007, and this sub-category now accounts for less than 0.1% of soft drinks sales. Lipton and Kenco make up 91% of the sub-category, and Kenco’s sales dropped 35% to £2.7m. Lipton held up better, but still showed a 6% decline to £4.1m.

Industry expert

“Soft drinks is by far the biggest impulse category in grocery: at over £6bn it’s about double the nextlargest category, confectionery. So the industry’s response to consumer and regulatory trends really matters to us. The push towards healthier lifestyles is coming from both consumers and regulators, and we’ve been impressed with the way products and brands have been coming through to turn this potential challenge into fresh opportunities to add value.”