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On-trade Soft Drinks - UK - December 2009

The report focuses on soft drinks bought for consumption in the on-trade, outside of the home.

  • Cash-squeezed consumers have been cutting back on eating/drinking out. As a result, sales of on-trade soft drinks have declined by 6% (by value) between 2007 and 2009 in sharp contrast to 2004-2007 when sales grew steadily (8% by value).
  • Mintel’s research shows 29 million adults resent paying what they perceive to be very high prices for soft drinks in a pub or bar when they know they can buy it for so much cheaper in shops.
  • Pubs, bars and restaurants primarily sell non-diet versions of soft drinks. Yet on-trade outlets are not maximising the potential opportunity as 32 million adults think they should stock a healthier range of soft drinks.
  • Eight in ten people prefer to drink soft drinks rather than alcohol at lunchtime.
  • The on-trade soft drinks market is dominated by Britvic and Coca Cola Enterprises (CCE) who between them account for 80% of the market (by value).
  • Despite struggling for some years in the off-trade, Pepsi (owned by Britvic) is the joint top selling brand (along with Coca Cola) in the on-trade. The brand has benefited from Britvic’s state-of-the-art dispensing technology.

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Table of contents

  1. Issues in the Market

      • Definition
        • Abbreviations
        • Future Opportunities

            • Reaching beyond an audience of white males
              • Courting female custom and engaging greys
                • No more liquid lunch?
                  • As British as a pint
                  • Market in Brief

                    • Consumers want better
                      • Pubs discouraging consumers from drinking soft drinks?
                        • Major brands dominating distribution
                          • Performance of on-trade soft drinks closely linked to economy
                            • Market will grow as Britain moves out of recession
                            • Internal Market Environment

                              • Key points
                                • Population going soft
                                  • Figure 1: A comparison of UK value sales for alcoholic and non-alcoholic drinks, 1998 and 2008
                                  • Figure 2: Trends for penetration of alcohol drinkers among over-18 british population, 2005-09
                                • Health and dieting are key consumer needs
                                  • Figure 3: Personal concerns among population, October 2009
                                • Failure to adapt is behind the decline of the traditional pub…
                                  • Figure 4: Net pub closures in the UK, 2005-09
                                  • Figure 5: Trends for penetration of pubs/bars and cafés, 2007-09
                                • …however, food-led pubs are performing (relatively) well
                                  • Figure 6: Proportion of population who visit pubs or bars for either a drink or a meal, 2009
                                • New soft drinks face many restrictions
                                • Broader Market Environment

                                  • Key points
                                    • Legislation favours soft drinks
                                      • Figure 7: Trends in alcohol duty, by selected alcohol type, 2004-09
                                    • A maximum price on soft drinks?
                                      • The fortunes of pubs closely linked to economy
                                        • Figure 8: Relationship between GDP and pub visiting, by quarter, 2007-09
                                      • Grey pound is essential for pubs
                                        • Figure 9: Forecast of adult population trends, by lifestage, 2004-14
                                      • Rising middle class is good news for soft drinks
                                        • Figure 10: Structure of the UK population, by socio-economic group, 2004-14
                                    • Competitive Context of Soft Drinks in On- and Off-trade

                                      • Key points
                                        • Functional and healthy soft drinks drive impressive growth
                                          • Chilled soft drinks outperform hot beverages
                                            • Figure 11: Trends for value sales of chilled soft drinks and hot beverages, 1998-2008
                                          • Recession alters soft drink market
                                            • Figure 12: Consumption of selected soft drinks in the last 12 months, 2005-09
                                        • Strengths and Weaknesses in the Market

                                          • Strengths
                                            • Weaknesses
                                            • Who’s Innovating?

                                              • Key points
                                                • A new range of more interesting, premium-quality soft drinks
                                                  • Using soft drinks to drive responsible drinking
                                                    • Free soft drinks for the designated driver
                                                      • Half-price drinks past 11pm
                                                      • Market Size and Forecast

                                                        • Market will bounce back after recession
                                                            • Figure 13: Forecast of volume and value sales of on-trade soft drinks market, 2004-14
                                                          • Expect prices to come down
                                                            • Figure 14: Forecast of cost per litre of on-trade soft drinks market, in current and real prices, 2004-14
                                                          • Juice drinks will be the main winner
                                                            • Figure 15: Forecast of value sales of on-trade soft drinks, by drink type, 2004-14
                                                            • Figure 16: Forecast of volume sales of on-trade soft drinks, by drink type, 2004-14
                                                          • Factors used in the forecast
                                                          • Segment Performance

                                                            • Key points
                                                              • Figure 17: Value and volume sales of on-trade soft drinks, by sub-category, 2007-09
                                                            • Energy drinks
                                                              • Figure 18: Forecast of volume and value sales of energy drinks in the on-trade, 2004-14
                                                            • Carbonated soft drinks
                                                              • Figure 19: Forecast of volume and value sales of carbonated soft drinks in the on-trade, 2004-14
                                                            • Juice drinks
                                                              • Figure 20: Forecast of volume and value sales of juice drinks in the on-trade, 2004-14
                                                            • Bottled water
                                                              • Figure 21: Forecast of volume and value sales of bottled water in the on-trade, 2004-14
                                                            • Mixers
                                                              • Figure 22: Forecast of volume and value sales of mixers in the on-trade, 2004-14
                                                            • Squash
                                                              • Figure 23: Forecast of volume and value sales of squash in the on-trade, 2004-14
                                                          • Market Share

                                                            • Key points
                                                              • Britvic and CCE dominate the market
                                                                • Figure 24: Market share of on-trade soft drink distributors, by value sales, 2008
                                                              • Colas dominate among brands
                                                                • Figure 25: Market share of top ten on-trade soft drink brands, by value sales, 2007-09
                                                            • Companies and Products

                                                              • Key points
                                                                • Main players
                                                                  • Britvic
                                                                    • Figure 26: Britvic’s soft drinks brands, 2009
                                                                  • Coca-Cola Enterprises (CCE)
                                                                    • Figure 27: Coca-Cola Enterprises’ soft drink brands, 2009
                                                                  • Others
                                                                    • AG Barr plc
                                                                        • Figure 28: AG Barr’s soft drink brands, 2009
                                                                      • Ben Shaws Dispense
                                                                        • GlaxoSmithKline (GSK) UK Ltd
                                                                          • Innocent Drinks
                                                                            • PepsiCo UK
                                                                              • Red Bull UK
                                                                              • Channels to Market

                                                                                • Key points
                                                                                  • Independents pubs are driving soft drink sales
                                                                                    • Figure 29: Value of soft drinks, by on-trade channel, 2007-09
                                                                                  • Changing structure of the pub business
                                                                                    • Figure 30: Structure of the pub industry, by ownership type, 2004-09
                                                                                • Brand Communication and Promotion

                                                                                  • Key points
                                                                                    • Carbonated soft drinks and fruit juices dominate spend
                                                                                      • Figure 31: Proportion of above-the-line advertising on soft drinks (includes on- and off-trade), by sub-category, 2007-09*
                                                                                      • Figure 32: Above-the-line adspend, by sub-category, 2007-09
                                                                                    • CCE comfortably the leading spender in the category
                                                                                      • Figure 33: Adspend, by company, 2007-09*
                                                                                      • Figure 34: Adspend, by brand, 2007-09
                                                                                  • Consumer Usage

                                                                                    • Key points
                                                                                      • Four in five are on-trade soft drink consumers
                                                                                        • Low penetration of diet drinks
                                                                                          • Figure 35: Non-alcoholic drinks drunk in the on-trade over the last year, October 2009
                                                                                        • Pub footfall overly reliant on men aged 18-24
                                                                                          • Figure 36: Frequency of visiting a pub to drink, by gender, age, socio-economic group and lifestage, September 2009
                                                                                        • Healthier drinking habits among women
                                                                                          • Figure 37: Net percentage difference between female and male consumption* of on-trade soft drinks and hot beverages, by type, October 2009
                                                                                      • Consumer Attitudes towards Soft Drinks in the On-trade

                                                                                        • Key points
                                                                                          • On-trade falls way short of meeting consumer demand for soft drinks
                                                                                            • Figure 38: Statements on drinking soft drinks when in pubs, restaurants or other outlets selling alcohol, October 2009
                                                                                          • A pricing strategy designed to turn off consumers
                                                                                            • Draught means quality of soft drinks often not up to scratch
                                                                                              • Lack of choice is a barrier to soft drink spend
                                                                                                • On-trade soft drinks of particular appeal to women
                                                                                                  • Figure 39: Net percentage difference between female and male agreement* about on-trade soft drinks, October 2009
                                                                                                • Soft drinks can also widen pubs’ appeal beyond 18-34s
                                                                                                    • Figure 40: Agreement on selected statements about on-trade soft drinks, by age, October 2009
                                                                                                • Consumer Attitudes towards Soft Drinks in Pubs

                                                                                                  • Key points
                                                                                                      • Figure 41: Percentage agreement on statements about drinking soft drinks specifically in pubs, November 2009
                                                                                                    • Resentment of soft drinks prices runs high
                                                                                                      • Better range of soft drinks more likely to have positive long-term effect
                                                                                                      • Target Groups

                                                                                                        • Key points
                                                                                                            • Figure 42: Attitudinal groups for drinking soft drinks in the on-trade, October 2009
                                                                                                          • Soft Drinks Enthusiasts
                                                                                                            • Concerned With Quality
                                                                                                              • Satisfied With Status Quo
                                                                                                                  • Figure 43: Statements on drinking soft drinks when in pubs, restaurants or other outlets selling alcohol, by target groups, October 2009
                                                                                                              • Appendix – Internal Market Environment

                                                                                                                  • Figure 44: Trends in visit to pubs or bars, 2005-09
                                                                                                              • Appendix – Broader Market Environment

                                                                                                                  • Figure 45: Trends in PDI and consumer expenditure, 2004-14
                                                                                                              • Appendix – Brand Communication and Promotion

                                                                                                                  • Figure 46: Adspend on soft drinks, by company, 2007-09
                                                                                                              • Appendix – Consumer Usage

                                                                                                                  • Figure 47: Non-alcoholic drinks drunk in the last year, by demographics, October 2009
                                                                                                                  • Figure 48: Non-alcoholic drinks drunk in the last year, by demographics, October 2009 (continued)
                                                                                                              • Appendix – Consumer Attitudes towards Soft Drinks in the On-trade

                                                                                                                  • Figure 49: Statements on drinking soft drinks in pubs, restaurants or other outlets selling alcohol, by demographics, October 2009
                                                                                                                  • Figure 50: Statements on drinking soft drinks in pubs, restaurants or other outlets selling alcohol, by demographics, October 2009 (continued)
                                                                                                              • Appendix – Consumer Attitudes towards Soft Drinks in Pubs

                                                                                                                  • Figure 51: Attitudes towards drinking soft drinks in pubs and bars, by demographics, December 2009
                                                                                                                  • Figure 52: Attitudes towards drinking soft drinks in pubs and bars, by demographics, December 2009 (continued)
                                                                                                              • Appendix – Target Groups

                                                                                                                  • Figure 53: Target groups, by demographics, October 2009
                                                                                                                  • Figure 54: Non-alcoholic drinks drunk in the last year, by target groups, October 2009

                                                                                                              Companies Covered

                                                                                                              • AG Barr
                                                                                                              • Asda Group Ltd
                                                                                                              • Ben Shaws
                                                                                                              • Bottle Green Drinks
                                                                                                              • British Beer and Pub Association
                                                                                                              • British Market Research Bureau (BMRB)
                                                                                                              • British Sky Broadcasting Group plc (BSkyB)
                                                                                                              • Britvic Soft Drinks
                                                                                                              • Cadbury Schweppes Plc
                                                                                                              • Chartered Brands Ltd
                                                                                                              • Co-operative Group
                                                                                                              • Coca-Cola GB
                                                                                                              • Danone UK Ltd
                                                                                                              • Dr Pepper Snapple Group, Inc.
                                                                                                              • Fentimans Limited
                                                                                                              • Food Standards Agency
                                                                                                              • Freeview
                                                                                                              • Gatorade
                                                                                                              • Gerber Foods Soft Drinks Limited
                                                                                                              • Gfk NOP
                                                                                                              • GlaxoSmithKline Plc
                                                                                                              • Government Actuary's Department (GAD)
                                                                                                              • Greencore Group plc
                                                                                                              • Highland Spring
                                                                                                              • HM Revenue & Customs
                                                                                                              • Innocent Drinks Ltd
                                                                                                              • James White
                                                                                                              • JD Wetherspoon
                                                                                                              • Jones Knowles Ritchie
                                                                                                              • Jones Soda Co.
                                                                                                              • Lidl (UK)
                                                                                                              • Market & Opinion Research International (MORI)
                                                                                                              • Mitchells & Butlers Plc
                                                                                                              • mmO2 plc
                                                                                                              • Ocean Spray Cranberries, Inc
                                                                                                              • Office for National Statistics
                                                                                                              • Orange plc (UK)
                                                                                                              • Pepsi-Cola UK
                                                                                                              • Radnor Hills Mineral Water Company Limited
                                                                                                              • Red Bull UK
                                                                                                              • Rockstar Inc.
                                                                                                              • Rubicon Drinks Ltd
                                                                                                              • Starbucks Coffee Company UK Ltd
                                                                                                              • Strathmore Mineral Water Co Ltd
                                                                                                              • T-Mobile (UK) Ltd
                                                                                                              • Tropicana UK
                                                                                                              • Virgin Media Ltd
                                                                                                              • Virgin Mobile
                                                                                                              • Vodafone Group Plc (UK)

                                                                                                              On-trade Soft Drinks - UK - December 2009

                                                                                                              £1,995.00 (Excl.Tax)