Carbonated Soft Drinks - UK - May 2013
“A striking 41% of consumers who have bought soft drinks in the on-trade currently consider their quality as poor, and only one in three users are satisfied with the range available, highlighting that there remains unmet demand in terms of choice and quality of soft drinks in the on-premise market.”
– Heidi Lanschützer, Food & Drink Analyst
Some questions answered in this report include:
- Is there further scope for stevia-based drinks in the market?
- How can the industry engage the ageing population?
- What measures can be taken to boost CSD sales in the on-trade?
- What NPD opportunities are there to maintain the category’s exciting image?
With penetration of almost 90%, carbonated soft drinks enjoy almost universal appeal in the UK.
Product innovation is rife, making this a dynamic and highly competitive marketplace.
Benefiting from their cheap price positioning, carbonated soft drinks exhibited resilient volume growth throughout the recession. However, for the first time in years, volumes declined in 2012, despite key events like the Queen’s Diamond Jubilee, the London Olympic/Paralympic Games and the UEFA 2012 Football Championship. Pressure from public entities related to soft drinks’ allegedly negative impact on people’s health, combined with poor weather throughout the summer months and consumers’ continuously squeezed budgets, contributed to this decline. However, rising average selling prices, fuelled by rising commodity costs, have countered waning sales and kept value growth in positive territory.
In the light of consumers’ increasing efforts to improve their health, diet/low-calorie options as well as carbonates with high fruit content represent strong growth opportunities. Also, there are still notable opportunities in the on-premise market, given the consumer trend for cutting back on alcoholic drinks and foodservice and on-trade operators’ greater focus on food-led formats. Also, continuing to invest in NPD, particularly in terms of packaging and new flavours, should help to maintain the category’s fun and exciting image.
For the purposes of this report, Mintel defines the carbonates market as covering all carbonated soft drinks sold through the retail and non-retail channels. Data include sales through the following outlets:
Take-home (including impulse): This includes grocery retail outlets where CSDs are purchased for the purpose of in-home consumption or for drinking on the go, 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).
Please note that the non-retail scope of this report has been expanded, and now includes sales made through fast food restaurants and other venues without an on-trade license in addition to pubs and clubs. As a result, the data in this report referring to on-premise sales are substantially different to those included in previous editions of this report.
The basic ingredients of soft drinks (excluding fruit juices and bottled water) are water, a sweetener, an acid and flavouring. Under European regulations, carbonated soft drinks are ‘a manufactured drink, optionally sweetened, acidulated, carbonated and which contain fruit, fruit juice and other salts; the flavour may derive from vegetable extracts or flavourings’. Optional ingredients include fruit, carbon dioxide, preservative and colouring.
In order to maintain consistency with previous Mintel reports, the following categories are used:
- non-cola carbonates (including general fruit-flavoured carbonates, ‘traditional’ carbonates such as ginger beer and shandy, and products such as root beer, carbonated iced teas, etc)
- lemonades (including lemon-and-lime flavours)
- mixers (including tonic water, ginger ale, soda water and bitter lemon). Soda water differs from fizzy water with the addition of sodium and its status as a mixer rather than a drink to be consumed on its own
All mainstream carbonated soft drinks are included in the market size. Diet carbonates are included. The market size for premium or adult soft drinks is provided as a separate segment and these are not included in the market size under carbonated soft drinks. Both carbonated and still premium or adult soft drinks are included in the segment size.
The following definitions are used to refer to ‘reduced sugar’ and ‘no added sugar’ products where relevant: Products that state ‘reduced sugar’ on labels must contain at least 25% less sugar than the standard variant of the drink: such products are not sugar-free. Products which state ‘no added sugar’ on labels are drinks which have had no additional sugar added. As with reduced sugar drinks, these products are not sugar-free as they may have natural sugar derived from one of their ingredients, such as the sugar from natural orange juice.
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