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Carbonated Soft Drinks - UK - June 2017

“While the Sugar Levy is likely to impact heavily on CSD sales, sugary variants in particular, there is marked opportunity to move sugary CSD drinkers over to diet/light variants. Low price and proving the flavour credentials of these variants are key to encouraging switching.”
– Alyson Parkes, Research Analyst

This Report discusses the following key topics:

  • Improving health credentials of L/N/R sugar variants could build trust amongst consumers
  • Marked potential to move sugary CSD drinkers to L/N/R sugar variants
  • Opportunity for premium CSDs to appeal to adults looking for alternatives to alcohol

For the purpose 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, cafes, education establishments, the workplace and in the on-trade (ie pubs, bars, 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.

Throughout this Report, the term ‘standard’ CSD is used interchangeably with non-diet to refer to the non-diet (sugary) CSDs, whereby sugar levels have not been reduced so as to be exempt from the Soft Drinks Industry Sugar Levy when invoked in March 2018.

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Table of contents

  1. Overview

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

          • The market
            • Sales of CSDs have continued to grow
              • Sugar Levy expected to drive retail volume sales down
                • Figure 1: Forecast of UK sales of carbonated soft drinks, by value, 2012-22
              • Continued growth of L/N/R sugar boosts cola sales
                • Figure 2: Retail value and volume sales of carbonated soft drinks, by segment, 2016
              • Sugar is top health ‘foe’ – Soft Drinks Sugar Levy due in March 2018
                • Artificial sweeteners divide industry
                  • Growing child population should boost the category
                    • Rise in real consumer incomes is expected to end
                      • Companies and brands
                        • L/N/R sugar brands benefit from sugar concerns
                          • Figure 3: Leading brands’ shares in the UK retail carbonated soft drinks market, by value, 2015/16 and 2016/17
                        • Britvic sees value and volume decline in the adult CSDs market
                          • Figure 4: Leading brands’ shares in the UK retail adult soft drinks market, by value, 2015/16 and 2016/17
                        • Companies pledge to reduce sugar
                          • Coke Zero renamed; Life culled; Fanta lightened
                            • Brands tap into consumer demand for premium drinks
                              • Adspend exceeds 2013 level
                                • Coke supports Zero Sugar rebrand, Pepsi links with events
                                  • Coke enjoys highest trust
                                    • The consumer
                                      • Sugary CSD usage falls in 2016
                                        • Figure 5: Usage of carbonated soft drinks, April 2017
                                      • Low price and matching sugary CSDs’ taste would most boost light CSDs
                                        • Figure 6: Factors to encourage switching to diet/light carbonated soft drinks, April 2017
                                      • Taste and quality ingredients are key attributes for premium CSDs
                                        • Figure 7: Factors deemed important in a premium carbonated soft drink, April 2017
                                      • Three in five consumers want easy sugar guidelines on-pack
                                        • Figure 8: Attitudes related to carbonated soft drinks, April 2017
                                      • ‘Low in calories’ is top association for all ‘light’ labels – but far from universal
                                        • Figure 9: Selected qualities associated with L/N/R sugar carbonated soft drinks, by type, April 2017
                                      • Cutting back on consumption is the most likely reaction to levy
                                        • Figure 10: Expected reactions to the Soft Drinks Sugar Levy on carbonated soft drinks consumption, April 2017
                                      • What we think
                                      • Issues and Insights

                                        • Improving health credentials of L/N/R sugar variants could build trust amongst consumers
                                          • The facts
                                            • The implications
                                              • Marked potential to move sugary CSD drinkers to L/N/R sugar variants
                                                • The facts
                                                  • The implications
                                                    • Opportunity for premium CSDs to appeal to adults looking for alternatives to alcohol
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • Sales of CSDs have continued to grow
                                                            • Sugar Levy expected to drive retail volume sales down
                                                              • Continued growth of L/N/R sugar boosts cola sales
                                                                • Sugar is top health ‘foe’ – Soft Drinks Sugar Levy due in March 2018
                                                                  • Safety of artificial sweeteners divides industry
                                                                    • Growing child population should boost the category
                                                                      • Rise in real consumer incomes is expected to end
                                                                      • Market Size and Forecast

                                                                        • Sales of CSDs have continued to grow
                                                                          • Figure 11: Forecast of UK sales of carbonated soft drinks, by volume, 2012-22
                                                                        • Value sales expected to keep climbing
                                                                            • Figure 12: Forecast of UK sales of carbonated soft drinks, by value, 2012-22
                                                                          • Sugar Levy expected to drive retail volume sales down
                                                                              • Figure 13: Forecast of UK retail sales of carbonated soft drinks, by volume, 2012-22
                                                                              • Figure 14: Forecast of UK retail sales of carbonated soft drinks, by value, 2012-22
                                                                            • On-premise sales of CSDs slide
                                                                              • Figure 15: Forecast of UK on-premise sales of carbonated soft drinks, by value, 2012-22
                                                                              • Figure 16: Forecast of UK on-premise sales of carbonated soft drinks, by volume, 2012-22
                                                                            • Forecast methodology
                                                                            • Market Segmentation

                                                                              • Continued growth of L/N/R sugar options boosts cola sales
                                                                                • Figure 17: Retail value and volume sales of carbonated soft drinks and adult soft drinks, by segment, 2014-16
                                                                              • Mixer drinks were the strongest performers in 2016
                                                                                • Fall in sales of lemonade continues
                                                                                • Market Drivers

                                                                                  • Sugar is the key driver of change in the category
                                                                                    • Soft Drinks Sugar Industry Levy to be invoked in March 2018
                                                                                      • Sugar is top health ‘foe’
                                                                                        • The industry responds with sugar reduction and recipe reformulation
                                                                                          • NHS to cut the sales of sugary drinks
                                                                                            • Safety of artificial sweeteners divides industry
                                                                                              • Reduced alcohol consumption provides an opportunity for CSDs
                                                                                                • Growing child population should boost the category
                                                                                                  • Rise in real consumer incomes is expected to end
                                                                                                  • Companies and Brands – What You Need to Know

                                                                                                    • L/N/R sugar brands benefits from sugar concerns
                                                                                                      • Britvic sees value and volume decline in the adult CSDs market
                                                                                                        • Companies pledge to reduce sugar
                                                                                                          • Coca-Cola Zero renamed, Life culled, Fanta lightened
                                                                                                            • Brands tap into consumer demand for premium drinks
                                                                                                              • Adspend exceeds 2013 level
                                                                                                                • Coca-Cola supports Zero Sugar rebrand; Pepsi links with events
                                                                                                                  • Coca-Cola enjoys highest trust
                                                                                                                  • Market Share

                                                                                                                    • L/N/R sugar brands benefit from sugar concerns
                                                                                                                      • Standard Coke struggles, Zero Sugar rebrand drives growth
                                                                                                                        • Figure 18: Leading brands’ sales and shares in the UK retail carbonated soft drinks market, by value and volume, 2015/16 and 2016/17
                                                                                                                      • Xtra variant helps Irn-Bru grows
                                                                                                                        • PepsiCo enjoys sales growth as Pepsi Max gains value share
                                                                                                                          • Fever-Tree sees substantial growth as mixer drinks continue to grow
                                                                                                                            • Figure 19: Leading manufacturers’ sales and shares in the UK retail carbonated soft drinks market, by value and volume, 2015/16 and 2016/17
                                                                                                                          • Britvic sees value and volume decline in the adult soft drinks market
                                                                                                                            • Premium brands buck the downward trend
                                                                                                                              • Figure 20: Leading brands’ sales and shares in the UK retail adult carbonated soft drinks market, by value and volume, 2015/16 and 2016/17
                                                                                                                          • Launch Activity and Innovation

                                                                                                                            • NPD in the CSDs market falls behind juice and tea
                                                                                                                              • Figure 21: Share of new product launches in the UK non-alcoholic drinks market, by category, 2013-16
                                                                                                                            • Companies pledge to make sizeable sugar reductions
                                                                                                                              • Figure 22: Share of new product launches in the carbonated soft drinks market with L/N/R sugar claims, 2013-17
                                                                                                                            • New recipe and new look for Fanta
                                                                                                                              • Success of Coca-Cola Zero Sugar leads to brand extension…
                                                                                                                                • Figure 23: Share of new product launches in the UK carbonated soft drink market, by top companies (sorted by 2016), 2013-17
                                                                                                                              • …but the end of Coca-Cola Life
                                                                                                                                • PepsiCo unveils UK’s first ginger and cola combination
                                                                                                                                  • Brands tap into consumer demand for premium drinks
                                                                                                                                    • Cans and anniversary packaging for Schweppes mixers
                                                                                                                                      • Fever-Tree expands tonic range and adds a cola variant to its offering
                                                                                                                                        • Appletiser launches premium cans
                                                                                                                                          • M&S add two premium CSDs to its Spirit of Summer range
                                                                                                                                            • R White’s lemonade rebranding accompanied by new flavour additions
                                                                                                                                              • Revived Victorian brand looks to take on Fever-Tree with premium tonic range
                                                                                                                                                • London-based Dalston’s continues craft soda revolution
                                                                                                                                                  • Welsh craft soda Lurvill’s Delight resurrected following craft movement
                                                                                                                                                    • Juice group launches exclusive charcoal lemonade
                                                                                                                                                    • Advertising and Marketing Activity

                                                                                                                                                      • Adspend exceeds 2013 level
                                                                                                                                                        • Figure 24: Total above-the-line, online display and direct mail advertising expenditure in the UK carbonated soft drinks market, by top 10 Advertisers, 2013-17
                                                                                                                                                      • Coca-Cola Zero re-brands to avoid consumer confusion over sugar
                                                                                                                                                        • Figure 25: Total above-the-line, online display and direct mail advertising expenditure in the UK carbonated soft drinks market, by top 10 brands, 2013-17
                                                                                                                                                      • TV personality Holly Willoughby appointed as Diet Coke brand ambassador
                                                                                                                                                        • ‘Share a Coke’ campaign returns with top holiday destinations
                                                                                                                                                          • Old Jamaica launches summer campaign
                                                                                                                                                            • ‘Talking Rubbish’ social experiment from Coca-Cola
                                                                                                                                                              • Coca-Cola continues to support charity FareShare with Christmas campaign
                                                                                                                                                                • PepsiCo focuses on football fans for 2017 UEFA sponsorship
                                                                                                                                                                  • Pepsi Max targets Millennials with ‘Summer of Music’ campaign
                                                                                                                                                                    • Brands look to new usage occasions for CSDs
                                                                                                                                                                      • J2O Spritz makes first TV appearance
                                                                                                                                                                        • Fever-Tree uses history of gin and tonic to raise awareness over malaria
                                                                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                                                                          • Brand Research

                                                                                                                                                                              • What you need to know
                                                                                                                                                                                • Brand map
                                                                                                                                                                                  • Figure 26: Attitudes towards and usage of selected drinks brands, April 2017
                                                                                                                                                                                • Key brand metrics
                                                                                                                                                                                  • Figure 27: Key metrics for selected drinks brands, April 2017
                                                                                                                                                                                • Brand attitudes: Coca-Cola excels on quality image and reputation
                                                                                                                                                                                  • Figure 28: Attitudes, by drinks brand, April 2017
                                                                                                                                                                                • Brand personality: Fever Tree most widely seen as exclusive and ethical
                                                                                                                                                                                  • Figure 29: Brand personality – Macro image, April 2017
                                                                                                                                                                                • Coca-Cola has strong ties with authenticity and the most traditional image
                                                                                                                                                                                  • Figure 30: Brand personality – Micro image, April 2017
                                                                                                                                                                                • Brand analysis
                                                                                                                                                                                  • Fever-Tree stands out on a sophisticated and stylish image
                                                                                                                                                                                    • Figure 31: User profile of Fever-Tree, April 2017
                                                                                                                                                                                  • Coca-Cola is the most trusted brand, with strongest quality image
                                                                                                                                                                                    • Figure 32: User profile of Coca-Cola, April 2017
                                                                                                                                                                                  • Despite low usage, Coca-Cola Zero Sugar enjoys strong endorsement
                                                                                                                                                                                    • Figure 33: User profile of Coca-Cola Zero Sugar, April 2017
                                                                                                                                                                                  • Sprite stands out as refreshing
                                                                                                                                                                                    • Figure 34: User profile of Sprite, April 2017
                                                                                                                                                                                  • Diet Coke enjoys high levels of commitment
                                                                                                                                                                                    • Figure 35: User profile of Diet Coke, April 2017
                                                                                                                                                                                  • Pepsi Max lacks a clearly differentiated image
                                                                                                                                                                                    • Figure 36: User profile of Pepsi Max, April 2017
                                                                                                                                                                                  • Tango has a strong fun image despite being most widely seen as falling behind
                                                                                                                                                                                    • Figure 37: User profile of Tango, April 2017
                                                                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                                                                  • Sugary CSDs usage falls in 2016
                                                                                                                                                                                    • Low price and matching sugary CSDs’ taste would most boost light CSDs
                                                                                                                                                                                      • Taste and quality ingredients are key attributes for a premium CSD
                                                                                                                                                                                        • Three in five consumers want easy sugar guidelines on-pack
                                                                                                                                                                                          • Scope for mainstream brands to offer premium carbonated soft drinks
                                                                                                                                                                                            • Low in calories is top association for all labels – but far from universal
                                                                                                                                                                                              • Most labels are widely associated with being artificially sweetened
                                                                                                                                                                                                • Cutting back on consumption is the most likely reaction
                                                                                                                                                                                                • Usage of Carbonated Soft Drinks

                                                                                                                                                                                                  • Most diet CSD drinkers also drink standard variants
                                                                                                                                                                                                    • Figure 38: Usage of carbonated soft drinks, April 2017
                                                                                                                                                                                                  • CSD usage retains youth bias
                                                                                                                                                                                                    • Figure 39: Usage of non-diet and diet/light carbonated soft drinks, by age, April 2017
                                                                                                                                                                                                  • Diet/light CSDs are drunk more frequently
                                                                                                                                                                                                    • Figure 40: Frequency of drinking carbonated soft drinks, by type, April 2017
                                                                                                                                                                                                  • CSDs are most commonly drunk at home
                                                                                                                                                                                                    • Figure 41: Usage of carbonated soft drinks, by location, April 2017
                                                                                                                                                                                                  • Two in five have drunk CSDs in the on-premise channel
                                                                                                                                                                                                  • Factors to Encourage Drinking of Diet/light Carbonated Soft Drinks

                                                                                                                                                                                                    • Low price would most boost light CSDs
                                                                                                                                                                                                      • Matching sugary CSDs’ taste would sway two in five
                                                                                                                                                                                                        • Figure 42: Factors to encourage drinking of diet/light carbonated soft drinks, April 2017
                                                                                                                                                                                                      • Over-65s most drawn to no artificial colourings or flavourings
                                                                                                                                                                                                        • Endorsements from health bodies chime most with younger age groups and parents of under-5s
                                                                                                                                                                                                        • Important Factors in Premium Carbonated Soft Drinks

                                                                                                                                                                                                          • Taste is the key attribute for a premium CSD
                                                                                                                                                                                                            • Unusual flavours could differentiate products
                                                                                                                                                                                                              • Figure 43: Factors deemed important in a premium carbonated soft drink, April 2017
                                                                                                                                                                                                            • High-quality ingredients lie not far behind
                                                                                                                                                                                                              • Natural ingredients are also a key factor
                                                                                                                                                                                                                • Figure 44: Share of new product launches in the carbonated soft drinks market carrying an all-natural product claim, 2013-17
                                                                                                                                                                                                              • 16-24s most drawn to attractive packaging
                                                                                                                                                                                                              • Attitudes Related to Carbonated Soft Drinks

                                                                                                                                                                                                                • Three in five consumers want easy sugar guidelines on-pack
                                                                                                                                                                                                                  • Figure 45: Attitudes related to carbonated soft drinks, April 2017
                                                                                                                                                                                                                • High interest in drinks with British fruit, but low current availability
                                                                                                                                                                                                                  • Scope for mainstream brands to offer premium carbonated soft drinks
                                                                                                                                                                                                                    • Figure 46: Carbonated soft drinks – CHAID – Tree output, April 2017
                                                                                                                                                                                                                  • Methodology
                                                                                                                                                                                                                    • Added texture interests a quarter; younger consumers are the most receptive
                                                                                                                                                                                                                    • Qualities Associated with L/N/R Sugar and Energy Labels in Carbonated Soft Drinks

                                                                                                                                                                                                                      • EFSA regulations of L/N/R sugar and energy claims
                                                                                                                                                                                                                        • Figure 47: EFSA permitted nutrition claims regarding L/N/R sugar and energy in liquids, April 2017
                                                                                                                                                                                                                      • Low in calories is top associations for all labels – but far from universal
                                                                                                                                                                                                                        • Most labels are widely associated with being artificially sweetened
                                                                                                                                                                                                                          • Figure 48: Qualities associated with carbonated soft drinks, by type, April 2017
                                                                                                                                                                                                                        • Few see any of the drinks as tasty
                                                                                                                                                                                                                        • Expected Reactions to the Soft Drinks Sugar Levy

                                                                                                                                                                                                                          • Methodology
                                                                                                                                                                                                                            • Cutting back on consumption is the most likely reaction
                                                                                                                                                                                                                              • Over a third would not change their drinking habits at all
                                                                                                                                                                                                                                • Figure 49: Expected reactions to the Soft Drinks Sugar Levy on carbonated soft drinks consumption, April 2017
                                                                                                                                                                                                                              • Other soft drinks may benefit from CSD cutbacks
                                                                                                                                                                                                                                • Figure 50: Expected behavioural change of those who would cut back or stop drinking carbonated soft drinks, April 2017
                                                                                                                                                                                                                              • Small opportunity to encourage trading up
                                                                                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                                                                                        • Figure 51: Forecast of UK sales of carbonated soft drinks, by value and volume, 2012-22
                                                                                                                                                                                                                                        • Figure 52: Forecast of UK retail sales of carbonated soft drinks, by value and volume, 2012-22
                                                                                                                                                                                                                                        • Figure 53: Forecast of UK on-premise sales of carbonated soft drinks, by value and volume, 2012-22
                                                                                                                                                                                                                                      • Forecast methodology
                                                                                                                                                                                                                                      • Appendix – Launch Activity and Innovation

                                                                                                                                                                                                                                          • Figure 54: New product launches in the carbonated soft drinks market with a real fruit claim, 2013-17
                                                                                                                                                                                                                                      • Appendix – Advertising and Marketing Activity

                                                                                                                                                                                                                                          • Figure 55: Leading manufacturers’ sales and shares in the UK retail adult soft drinks market, by value and volume, 2015/16 and 2016/17
                                                                                                                                                                                                                                          • Figure 56: Share of above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by top 10 advertisers, 2013-17
                                                                                                                                                                                                                                          • Figure 57: Share of above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by top 10 brands, 2013-17
                                                                                                                                                                                                                                          • Figure 58: Above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by parent company and brand, 2013-16
                                                                                                                                                                                                                                      • Appendix – The Consumer

                                                                                                                                                                                                                                          • Figure 59: Usage of non-diet and diet/light carbonated soft drinks, by usage occasion, April 2017
                                                                                                                                                                                                                                          • Figure 60: Factors to encourage switching to diet/light carbonated soft drinks, April 2017
                                                                                                                                                                                                                                          • Figure 61: Factors to encourage switching to diet/light carbonated soft drinks, April 2017
                                                                                                                                                                                                                                          • Figure 62: Carbonated soft drinks – CHAID – Table output, April 2017
                                                                                                                                                                                                                                          • Figure 63: Qualities associated with types of carbonated soft drinks, by light formats, April 2017
                                                                                                                                                                                                                                          • Figure 64: Qualities associated with types of carbonated soft drinks, by no added sugar formats, April 2017
                                                                                                                                                                                                                                          • Figure 65: Qualities associated with types of carbonated soft drinks, by diet formats, April 2017
                                                                                                                                                                                                                                          • Figure 66: Qualities associated with types of carbonated soft drinks, by zero sugar, April 2017
                                                                                                                                                                                                                                          • Figure 67: Qualities associated with types of carbonated soft drinks, by sugar free formats, April 2017
                                                                                                                                                                                                                                        • EFSA permitted nutrition claims related to LNR sugar and energy claims
                                                                                                                                                                                                                                          • Low energy
                                                                                                                                                                                                                                            • Energy-reduced
                                                                                                                                                                                                                                              • Energy-free
                                                                                                                                                                                                                                                • Low sugars
                                                                                                                                                                                                                                                  • Sugars-free
                                                                                                                                                                                                                                                    • No added sugars
                                                                                                                                                                                                                                                      • Reduced [Name of the nutrient]
                                                                                                                                                                                                                                                        • Light/lite

                                                                                                                                                                                                                                                        Companies Covered

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                                                                                                                                                                                                                                                        Carbonated Soft Drinks - UK - June 2017

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