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Carbonated Soft Drinks - UK - June 2016

“The sugar tax is likely to have a severe impact on the soft drink industry and CSD sales in 2018, and as such is the single biggest challenge facing the industry. However, drinkers’ inclinations to switch to low-sugar versions and the strength of consumer demand for action on the sugar issue suggest that companies seen as proactive on this matter stand in good stead of shoring up their reputation among consumers.”
– Alice Baker, Research Analyst

This report discusses the following key topics:

  • Consumer call for sugar reduction presents companies with a challenge and an opportunity
  • Sparkling fruit juice with added vitamins could help to retain users
  • New and seasonal flavours could maintain interest in the category

For the purposes of this Report, Mintel defines the carbonated soft drinks (CSD) market as covering all carbonated soft drinks sold through the retail and non-retail channels. Data includes sales through the following outlets:

Retail: This includes grocery retail outlets where CSDs are purchased for the purpose of consumption off-premise, comprising supermarkets, convenience stores and petrol forecourts among others.

On-premise: This includes anywhere where CSDs are bought to consume on-site, eg leisure centres, hotels, restaurants, fast food venues, cafés, education establishments, the workplace and in the on-trade (ie pubs, bars and clubs).

All mainstream carbonated soft drinks are included in the market size. Diet carbonates are included. Mixers (including tonic water, ginger ale, soda water and bitter lemon) are included. Soda water differs from fizzy water because of the addition of sodium and its status as a mixer rather than a drink to be consumed on its own.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • On-premise grows faster than retail 2015
              • Sugar tax poses a threat going forward
                • Figure 1: Forecast of UK sales of carbonated soft drinks, by value, 2011-21
              • Cola continues to dominate market but mixers see strongest growth
                • Sugar tax is key challenge for industry to negotiate
                  • Companies and brands
                    • CCE loses sales and share while PepsiCo gains from Pepsi Max growth
                      • Figure 2: Leading brands’ shares in the UK retail carbonated soft drinks market, by value, 2015/16*
                    • Coca-Cola reformulates and L/N/R sugar claims increase
                      • Advertising spend approaches 2013 high
                        • Coca-Cola most likely to be seen as worth paying more for but Shloer is the most likely to be recommended
                          • The consumer
                            • Usage of non-diet CSDs remains higher, but diet CSDs more likely to be drunk daily
                              • Figure 3: Usage of non-diet and diet carbonated soft drinks, April 2016
                              • Figure 4: Usage of non-diet and diet carbonated soft drinks, by location, April 2016
                            • Further promotion needed to build special-occasion associations
                              • Opportunities for both established and new players to innovate, while fortified CSDs could help to retain users
                                • Figure 5: Carbonated soft drink product enticements, April 2016
                              • Consumer demand for action on sugar places onus on companies but potential pitfalls ahead
                                • Figure 6: Attitudes towards carbonated soft drinks, April 2016
                              • A price rise would prompt more than half of sugary CSD drinkers to cut back or stop, but switching creates opportunities to maintain sales
                                • Figure 7: Consumers’ expected response to the sugar tax, April 2016
                                • Figure 8: How those cutting back due to the sugar tax expect to change their behaviour, April 2016
                              • What we think
                              • Issues and Insights

                                • Consumer call for sugar reduction presents companies with a challenge and an opportunity
                                  • The facts
                                    • The implications
                                      • Sparkling fruit juice with added vitamins could help to retain users
                                        • The facts
                                          • The implications
                                            • New and seasonal flavours could maintain interest in the category
                                              • The facts
                                                • The implications
                                                • The Market – What You Need to Know

                                                  • On-premise grows faster than retail in 2015
                                                    • Further decline estimated in 2016
                                                      • Sugar tax poses a threat going forward
                                                        • Cola continues to dominate market but mixers see strongest growth
                                                          • Sugar tax is key challenge for industry to negotiate
                                                          • Market Size and Forecast

                                                            • On-premise grows ahead of retail in 2015
                                                              • Figure 9: Forecast of UK sales of carbonated soft drinks, by volume, 2011-21
                                                              • Figure 10: Forecast of UK sales of carbonated soft drinks, by value, 2011-21
                                                              • Figure 11: Forecast of UK sales of carbonated soft drinks, by value and volume, 2011-21
                                                            • Sugar tax to hit sales
                                                                • Figure 12: Forecast of UK retail sales of carbonated soft drinks, by volume, 2011-21
                                                                • Figure 13: Forecast of UK retail sales of carbonated soft drinks, by value, 2011-21
                                                                • Figure 14: Forecast of UK retail sales of carbonated soft drinks, by value and volume, 2011-21
                                                              • Improved disposable incomes should boost on-premise sales
                                                                • Figure 15: Forecast of UK on-premise sales of carbonated soft drinks, by volume, 2011-21
                                                                • Figure 16: Forecast of UK on-premise sales of carbonated soft drinks, by value, 2011-21
                                                                • Figure 17: Forecast of UK sales of carbonated soft drinks, by value and volume, 2011-21
                                                              • Forecast methodology
                                                              • Market Segmentation

                                                                • Growth for low-sugar options buoys up cola sales
                                                                  • Figure 18: Retail value and volume sales of carbonated soft drinks and adult and traditional soft drinks, by segment, 2013-15
                                                                • Lack of focus on low-sugar options inhibits lemonade
                                                                  • Spirits’ rising popularity boosts mixers
                                                                  • Market Drivers

                                                                    • Sugar tax is key challenge for the carbonated soft drinks industry
                                                                      • Local government urges parents to switch away from CSDs
                                                                        • Ageing population could inhibit category growth
                                                                          • Improved incomes should facilitate trading up
                                                                            • Summer weather plays a crucial role
                                                                              • Figure 19: Sunshine hours in the UK, by month, 2011-16
                                                                          • Key Players – What You Need to Know

                                                                            • CCE loses sales and share while PepsiCo gains from Pepsi Max growth
                                                                              • Coca-Cola reformulates and L/N/R sugar claims increase
                                                                                • Advertising spend approaches 2013 high
                                                                                  • Coca-Cola most likely to be seen as worth paying more for but Shloer is the most likely to be recommended
                                                                                  • Market Share

                                                                                    • Mixed fortunes for Coca-Cola brands
                                                                                      • Coca-Cola and Diet Coke falter but Coca-Cola Life continues to grow
                                                                                        • Schweppes fails to benefit from growth in mixers
                                                                                          • Pepsi Max benefits from sole marketing focus
                                                                                            • Increased distribution helps San Pellegrino to grow
                                                                                              • Figure 20: Leading brands’ sales and shares in the UK retail carbonated soft drinks and adult and traditional soft drinks market, by value and volume, 2014/15 and 2015/16
                                                                                            • Fever-Tree reaps benefits of growth in mixers as distribution increases
                                                                                              • Figure 21: Leading manufacturers’ sales and shares in the UK retail carbonated soft drinks and adult and traditional soft drinks market, by value and volume, 2014/15 and 2015/16
                                                                                          • Launch Activity and Innovation

                                                                                            • Coca-Cola reformulates and relaunches
                                                                                              • New flavoured waters blur boundaries with CSDs
                                                                                                • Sparkling Ice enters the UK market
                                                                                                  • AG Barr extends into flavoured water
                                                                                                    • Companies continue to focus on calories, not sugar in promoting diet drinks
                                                                                                      • Figure 22: New product launches in the UK carbonated soft drinks market, by top 20 claims, 2011-15
                                                                                                    • Premium claims are on the up
                                                                                                      • Further growth in pressés
                                                                                                        • Taking inspiration from alcoholic drinks
                                                                                                        • Advertising and Marketing Activity

                                                                                                          • Adspend approaches 2013 peak
                                                                                                            • Figure 23: Above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by top 10 advertisers (sorted by 2015), 2012-15
                                                                                                          • Coca-Cola evokes emotions in unified campaign
                                                                                                            • Diet Coke receives largest proportion of Coca-Cola’s spend
                                                                                                              • Forging links with sports and active lifestyles
                                                                                                                • PepsiCo focuses on Pepsi Max range
                                                                                                                  • Suntory targets discerning adults with Orangina relaunch
                                                                                                                    • AG Barr draws on its Scottish heritage
                                                                                                                      • Fever-Tree unveils first ever television advert
                                                                                                                        • Nielsen Media Research coverage
                                                                                                                        • Brand Research

                                                                                                                            • What you need to know
                                                                                                                              • Brand map
                                                                                                                                • Figure 24: Attitudes towards and usage of selected drinks brands, March 2016
                                                                                                                              • Key brand metrics
                                                                                                                                • Figure 25: Key metrics for selected drinks brands, March 2016
                                                                                                                              • Brand attitudes: Coca-Cola and Shloer seen as most worth paying more for
                                                                                                                                • Figure 26: Attitudes, by drinks brand, March 2016
                                                                                                                              • Brand personality: Coca-Cola is seen as the most fun
                                                                                                                                • Figure 27: Brand personality – Macro image, March 2016
                                                                                                                              • Shloer seen as sophisticated and stylish
                                                                                                                                • Figure 28: Brand personality – Micro image, March 2016
                                                                                                                              • Brand analysis
                                                                                                                                • Shloer is the most recommended brand
                                                                                                                                  • Figure 29: User profile of Shloer, March 2016
                                                                                                                                • Coca-Cola seen most widely as worth paying more for
                                                                                                                                  • Figure 30: User profile of Coca-Cola, March 2016
                                                                                                                                • Pepsi Max seen as fun and vibrant but less associated with health than Diet Coke
                                                                                                                                  • Figure 31: User profile of Pepsi Max, March 2016
                                                                                                                                • Diet Coke remains more popular with women than men
                                                                                                                                  • Figure 32: User profile of Diet Coke, March 2016
                                                                                                                                • 7UP seen as refreshing but also as standing still
                                                                                                                                  • Figure 33: User profile of 7UP, March 2016
                                                                                                                                • Orangina is seen as the most pure but has lost out from lower visibility
                                                                                                                                  • Figure 34: User profile of Orangina, March 2016
                                                                                                                                • Coca-Cola Life favoured by parents with young children
                                                                                                                                  • Figure 35: User profile of Coca-Cola Life, March 2016
                                                                                                                                • Irn-Bru remains more popular in Scotland than elsewhere in the UK
                                                                                                                                  • Figure 36: User profile of Irn-Bru, March 2016
                                                                                                                              • The Consumer – What You Need to Know

                                                                                                                                • Usage of non-diet CSDs remains higher, but diet CSDs more likely to be drunk daily
                                                                                                                                  • Further promotion needed to build special-occasion associations
                                                                                                                                    • Opportunities for both established and new players to innovate, while fortified CSDs could help to retain users
                                                                                                                                      • Consumer demand for action on sugar places onus on companies but potential pitfalls ahead
                                                                                                                                        • A price rise would prompt more than half of sugary CSD drinkers to cut back or stop, but switching creates opportunities to maintain sales
                                                                                                                                        • Usage of Carbonated Soft Drinks

                                                                                                                                          • Carbonated soft drinks usage undiminished by sugar concerns
                                                                                                                                            • Figure 37: Usage of non-diet and diet carbonated soft drinks, April 2016
                                                                                                                                          • Youth bias in usage limits market growth potential
                                                                                                                                            • Rising incomes could encourage trading up
                                                                                                                                              • Diet CSDs more likely to be drunk daily
                                                                                                                                                • Figure 38: Usage frequency for non-diet and diet carbonated soft drinks, April 2016
                                                                                                                                              • Range of potential uses boosts at-home drinking
                                                                                                                                                • Scope for pubs and restaurants to expand their selection of diet CSDs
                                                                                                                                                  • Figure 39: Usage of non-diet and diet carbonated soft drinks, by location, April 2016
                                                                                                                                              • Usage Occasions for Selected Types of Carbonated Soft Drinks

                                                                                                                                                • Majority do not see carbonated soft drinks as suitable for formal occasions
                                                                                                                                                  • Role of CSDs in enhancing an everyday meal could be promoted further
                                                                                                                                                    • Pressés still unfamiliar to many consumers
                                                                                                                                                      • Smaller formats could encourage on-the-go usage
                                                                                                                                                        • Treat aspect of pressés and sparkling juice can be mined further
                                                                                                                                                          • Figure 40: Usage occasions for selected types of carbonated soft drinks and other sparkling drinks, April 2016
                                                                                                                                                        • Few acknowledge flavoured sparkling water as offering hydration
                                                                                                                                                        • Product Enticements

                                                                                                                                                          • Opportunity for established and new players to innovate with flavours
                                                                                                                                                            • Introductory offers and sample size packs could help to drive trial
                                                                                                                                                                • Figure 41: Carbonated soft drink product enticements, April 2016
                                                                                                                                                              • Carbonated soft drinks with added benefits interest a third of users
                                                                                                                                                                • Expansion of seasonal flavours could encourage all-year-round usage
                                                                                                                                                                • Attitudes towards Carbonated Soft Drinks

                                                                                                                                                                  • Consumer demand for action on sugar places onus on companies but multiple issues to negotiate
                                                                                                                                                                      • Figure 42: Attitudes towards carbonated soft drinks, April 2016
                                                                                                                                                                    • Brands and retailers take different approaches to reducing sugar
                                                                                                                                                                      • Plant-derived sweeteners not the ‘magic bullet’ solution
                                                                                                                                                                        • Potential for other sugar alternatives
                                                                                                                                                                          • Meal deals and strategic positioning could harness associations of glass bottles with special occasions
                                                                                                                                                                            • Stronger emphasis on fruit content could help fruit juice-based CSDs to differentiate themselves
                                                                                                                                                                              • More than half of drinkers are interested in CSDs with a charity donation
                                                                                                                                                                              • Consumers’ Expected Response to the Sugar Tax

                                                                                                                                                                                • More than half of users of sugary CSDs would stop or cut back
                                                                                                                                                                                    • Figure 43: Consumers’ expected response to the sugar tax, April 2016
                                                                                                                                                                                  • Reports of unchanged behaviour more common among infrequent users
                                                                                                                                                                                    • Higher earners more likely to cut back
                                                                                                                                                                                      • Consumer switching provides opportunities for brands to diversify
                                                                                                                                                                                          • Figure 44: How those cutting back due to the sugar tax expect to change their behaviour, April 2016
                                                                                                                                                                                        • Opportunities for both premium and own-label
                                                                                                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                            • Abbreviations
                                                                                                                                                                                              • Consumer research methodology
                                                                                                                                                                                              • Appendix – Market Size and Forecast

                                                                                                                                                                                                • Total market
                                                                                                                                                                                                  • Figure 45: Forecast of UK sales of carbonated soft drinks, by value, best- and worst-case, 2011-21
                                                                                                                                                                                                  • Figure 46: Forecast of UK sales of carbonated soft drinks, by volume, best- and worst-case, 2011-21
                                                                                                                                                                                                • Retail
                                                                                                                                                                                                  • Figure 47: Forecast of UK retail sales of carbonated soft drinks, by value, best- and worst-case, 2011-21
                                                                                                                                                                                                  • Figure 48: Forecast of UK retail sales of carbonated soft drinks, by volume, best- and worst-case, 2011-21
                                                                                                                                                                                                • On-premise
                                                                                                                                                                                                  • Figure 49: Forecast of UK on-premise sales of carbonated soft drinks, by value, best- and worst-case, 2011-21
                                                                                                                                                                                                  • Figure 50: Forecast of UK on-premise sales of carbonated soft drinks, by volume, best- and worst-case, 2011-21
                                                                                                                                                                                                • Forecast methodology
                                                                                                                                                                                                • Appendix – Advertising and Marketing Activity

                                                                                                                                                                                                    • Figure 51: Above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by parent company and brand (sorted by top five advertisers in 2015), 2012-15

                                                                                                                                                                                                Companies Covered

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

                                                                                                                                                                                                Carbonated Soft Drinks - UK - June 2016

                                                                                                                                                                                                US $2,672.70 (Excl.Tax)