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Attitudes towards Premium Soft Drinks - UK - February 2015

“Sugar attracted negative media coverage in 2014, also affecting soft drinks. That half of premium soft drinks users are interested in reduced sugar versions of these signals room for growth in this area.”
– Aimee Townshend, Research Analyst

This report looks at the following areas:

  • Reduced sugar drinks appeal to half of premium soft drink users
  • Decline in alcohol consumption presents opportunity for soft drinks manufacturers
  • Growth opportunity for premium soft drinks in the on-trade

Despite their upmarket positioning, premium soft drinks have forged a mainstream role. Seven in 10 adults drank premium soft drinks at home in the six months up to November 2014, whilst six in 10 adults drank them in the on-trade in the same time period.

All-natural ingredients enjoy strong premium connotations with many soft drinks manufacturers already emphasising the use of natural and high-quality ingredients in their products as part of a premium positioning. A clear difference in taste from cheaper versions is also seen as an important quality in defining a soft drink as premium.

With high media attention on sugar and consumers becoming more aware of their intake, there is pressure on the soft drinks industry to reduce the sugar content of products. With natural ingredients widely seen as an important characteristic of premium soft drinks, how best to achieve reduced sugar versions without the use of artificial sweeteners and without compromising the taste is particularly pertinent to the premium market.

Three in 10 consumers drink premium soft drinks as an alternative to alcohol at home and an equal number do so in the on-trade, demonstrating the sector’s ability to position itself as an alternative to alcohol. The continuing rise of alcohol drinks prices is expected to continue to benefit soft drinks, though the expected improvements to household incomes may dampen this effect.

This report examines consumer attitudes towards premium soft drinks sold through both retail and non-retails channels. For the purpose of this report, the segment is defined by Mintel as including soft drinks positioned towards the top end of the market by price, and targeted at adults more than children across the following types of drinks:

  • Fruit juice drinks (eg Amé, Shloer and Appletiser)
  • 100% fruit juice
  • Pressés (eg Bottlegreen) and other premium carbonated drinks
  • Cordials (eg Belvoir)
  • Still, sparkling and flavoured water
  • Mixers

This report excludes:

  • Energy and sport drinks such as Lucozade Sport and Red Bull. These are covered in Mintel’s Sports and Energy Drinks – UK, July 2014 report.
  • Tea and coffee products. These are covered in Mintel’s Tea and Other Hot Drinks – UK, July 2014 and Coffee – UK, August 2014 reports.

 

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • Market factors
              • Recovering economy should support spending
                • Media spotlight on sugar affects soft drinks
                  • Younger cohorts are core users
                    • Falling alcohol sales support premium soft drink usage
                      • New product trends
                        • Premium soft drinks enjoy rise in new launches in 2014
                          • Figure 1: New product launches with a premium claim in selected UK soft drinks markets*, 2010-14
                        • Innovation around flavour
                          • Own-label takes an interest in premium soft drinks
                            • Figure 2: Share of branded and private-label premium product launches in the UK soft drinks market*, 2014
                          • Limited activity in lower-calorie premium soft drinks
                            • Premium soft drinks mimic alcoholic drinks
                              • The consumer
                                • All-natural ingredients enjoy strong premium connotations
                                  • Figure 3: Factors seen as defining premium soft drinks, November 2014
                                • Premium soft drinks enjoy higher usage at home
                                  • Figure 4: Frequency of premium soft drink usage, by location, November 2014
                                • Premium soft drinks are most widely seen as a treat
                                  • Figure 5: Occasions associated with premium soft drink usage, November 2014
                                • Most premium drink buyers would pay more for superior taste
                                  • Figure 6: Attitudes towards premium soft drinks, November 2014
                                • Reduced sugar premium soft drinks appeal to half of users
                                  • Figure 7: Interest in selected premium soft drinks concepts, November 2014
                                • What we think
                                • Issues and Insights

                                    • Reduced sugar drinks appeal to half of premium soft drink users
                                      • The facts
                                        • The implications
                                          • Decline in alcohol consumption presents opportunity for soft drinks manufacturers
                                            • The facts
                                              • The implications
                                                • Growth opportunity for premium soft drinks in the on-trade
                                                  • The facts
                                                    • The implications
                                                    • Trend Application

                                                        • Trend: Guiding Choice
                                                          • Trend: Mood to Order
                                                            • Mintel Futures: Human
                                                            • Market Drivers

                                                              • Key points
                                                                • Consumers find themselves in a better financial situation in 2014
                                                                  • Figure 8: Consumers’ financial health index, February 2009-October 2014
                                                                • Negative media focus on sugar content of soft drinks continues
                                                                  • Slowing growth in core premium soft drinks users poses challenges for the market
                                                                    • Figure 9: Trends in the age structure of the UK population, 2009-14 and 2014-19
                                                                  • Declining alcohol consumption could benefit premium soft drinks
                                                                    • Figure 10: Trends in UK per capita consumption of 100% alcohol, 2000-13
                                                                • Strengths and Weaknesses

                                                                  • Strengths
                                                                    • Weaknesses
                                                                    • Who’s Innovating?

                                                                      • Key points
                                                                        • Premium soft drinks enjoy new launches in 2014
                                                                          • Figure 11: New product launches with a premium claim in selected UK soft drinks markets*, 2010-14
                                                                        • Innovation around flavour attracts new launches
                                                                          • Ginger spices up the soft drinks market
                                                                            • Cordial ranges expand with interesting flavour combinations
                                                                              • Figure 12: New premium product launches in the UK soft drinks market*, by category, 2010-14
                                                                            • Own-label takes an interest in premium soft drinks
                                                                              • Figure 13: Share of branded and private-label premium product launches in the UK soft drinks market*, 2014
                                                                            • Lower-calorie premium soft drinks are well placed to appeal
                                                                              • Premium soft drinks mimic alcoholic drinks
                                                                              • The Consumer – Attributes Associated with Premium Soft Drinks

                                                                                • Key points
                                                                                  • Ingredient attributes are most important in defining premium soft drinks
                                                                                    • Figure 14: Factors seen as defining premium soft drinks, November 2014
                                                                                  • All-natural ingredients enjoy strong premium connotations
                                                                                    • Interest in naturalness extends to sweeteners
                                                                                      • A tangible difference in taste rates highly as a premium characteristic
                                                                                        • Taking cues from the grocers to prove the difference
                                                                                          • Helping consumers to taste the difference
                                                                                            • Mass production deemed acceptable in premium soft drinks
                                                                                              • Packaging matters most to the under-35s
                                                                                              • The Consumer – Usage of Premium Soft Drinks

                                                                                                • Key points
                                                                                                  • Premium soft drinks enjoy higher usage at home
                                                                                                      • Figure 15: Frequency of premium soft drink usage, by location, November 2014
                                                                                                    • Premium soft drinks are most widely seen as a treat
                                                                                                      • Figure 16: Occasions associated with premium soft drink usage, November 2014
                                                                                                    • Scope to better capitalise on premium soft drinks’ associations with meal
                                                                                                      • Premium soft drinks enjoy niche appeal as an alcohol alternative
                                                                                                      • The Consumer – Attitudes towards Premium Soft Drinks

                                                                                                        • Key points
                                                                                                          • Consumers willing to pay more for superior taste
                                                                                                            • Figure 17: Attitudes towards premium soft drinks, November 2014
                                                                                                          • Lightly sparkling drinks enjoy strong appeal
                                                                                                            • Visibility is an important driver for choice of soft drink in the on-trade
                                                                                                              • Branded glassware can boost visibility and image
                                                                                                                • Scope for garnishes to drive interest
                                                                                                                  • Majority of buyers would like to see more choice in the on-trade
                                                                                                                    • Minority interest in smaller brands in the on-trade
                                                                                                                      • Less sweet premium soft drinks appeal to half of buyers
                                                                                                                        • Spice notes can support a less sweet positioning
                                                                                                                        • The Consumer – Premium Soft Drinks Enticements

                                                                                                                          • Key points
                                                                                                                            • Reduced sugar premium soft drinks appeal to half of users
                                                                                                                              • Figure 18: Interest in selected premium soft drinks concepts, November 2014
                                                                                                                            • Naturally lower-sugar versions without added sweeteners appeal to one in three users
                                                                                                                              • Plant-derived sweeteners favoured over artificial versions
                                                                                                                                • Shloer is among the few brands adopting stevia
                                                                                                                                  • Limited edition flavours attract interest from consumers
                                                                                                                                    • Limited editions offer a platform for engaging customers
                                                                                                                                      • Spices and coffee/tea flavours tap into multiple interest points
                                                                                                                                        • Spices can offer a ‘twist’ on established drinks
                                                                                                                                          • Scope for spices to drive an indulgent image
                                                                                                                                            • Botanical extracts also appeal
                                                                                                                                              • Premium mixers tailored to alcoholic drinks appeal to one in four
                                                                                                                                                • Communication focused on taste profile should resonate

                                                                                                                                                Companies Covered

                                                                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                                                                Attitudes towards Premium Soft Drinks - UK - February 2015

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