Soft drink and grocery trend report finds support for brands and ‘mid-sized’ shopping trips

Posted by Daniel Palmer on 17th March 2009

Sales of soft drinks appear to be holding up, based on the sales figures of Australian beverage leaders and a new report from the UK, where sales in 2008 defied another poor summer.

The 2009 Britvic Soft Drinks Report found soft drinks down just 1% in value and 2% in volume terms compared to the previous year’s strong performance. This robust performance comes as consumers turn towards brands they know and trust as economic conditions deteriorate, according to the report. Despite consumers planning their shopping more carefully, soft drinks are still considered a staple of the mid-sized shopping basket.

The consumer trends identified in last year’s report, such as the importance of health and wellbeing, indulgence, ethical and environmental concerns and convenience are all still important to the consumer but, to a certain extent, have been overshadowed by the challenging economic conditions.

In 2008 energy and sports drinks continued to drive the market as consumers sought specific functional benefits such as added vitamins, electrolytes, glucose or stimulants (including caffeine and guarana), while traditional favourites such as cola, squash and juice drinks proved to be resilient. Additionally, the big brands held up well as consumers reportedly opted for well-known and trusted names rather than switching to own-label products.

“Soft drinks continue to be a staple purchase on which consumers are reluctant to compromise,” Paul Moody, Britvic CEO and President of the British Soft Drinks Association noted. “And as a soft drink is a small-ticket, cash item offering affordable everyday enjoyment, they have little reason to. In the downturn so far, it’s the big brands and traditionally popular sub-categories like cola, squash and juice drinks that consumers seem particularly unwilling to do without.””The soft drinks industry’s close understanding of consumer and shopper behaviour has enabled it to continue satisfying the huge diversity of consumer needs, whether for hydration, health, enjoyment, convenience, value or – particularly nowadays – all of those at once,” he suggested. “With another tough year in prospect, the challenge for the industry is to keep delivering the combination of value and quality that consumers expect, and to stay alert to every shift in their daily purchasing decisions.”

Other key findings in the Report were:

– Consumers are reacting to the economic climate by increasingly looking out for promotional deals on the groceries they buy. However, with 61% of branded soft drinks sold on promotion, the price incentive for shoppers to trade down to own label is not overly strong.

– Consumers are also cutting down on the large-size ‘monster’ shop as well as the small basket ‘top-up’ shop, opting instead for better planned mid-sized shopping trips.

– In the Take-Home market (supermarkets and convenience stores), sales were up 1% by value in 2008 to £6.1n, despite a 2% volume decline. The success of smoothies faltered after several years of strong growth, with sales down 20% by value and 15% by volume as consumers were unwilling to pay a price premium for their ‘5 a day’. Sales of bottled water were also hit.

-Conditions were more challenging in the On-Premise market (pubs, bars and restaurants), but soft drinks outperformed total alcoholic drinks with sales at £2.3bn, down 4% by value and 6% by volume

The full report is available online (with charts and data extracts) at