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Premium Soft Drinks - UK - January 2010

  • Although small, this market is growing quickly and is now worth £105million. Premium soft drinks are more upmarket, adult soft drinks which usually come in premium packaged glass bottles and generally contain natural, more unusual and better quality ingredients e.g. Shloer’s white grape and elderflower juice and Belvoir organic ginger beer.
  • Demand for more adult/better quality soft drinks has grown from, among other things: a rise in ABC1s, meaning that as many as seven in ten now think it is “worth paying extra for quality goods” (TGI data); and legislative changes limiting advertising to kids e.g. the ban on advertising less healthy soft drinks on TV for under under-16s.
  • Currently, the market struggles from low consumer awareness. For example, a fifth of the UK population have not heard of any brands within the sector, while only the long-established brand leaders (Shloer and Appletiser) are recognised by more than half the population.
  • That many players in the market are small, local, farming companies may mean less resources for building awareness, but offers a chance to tap into growing consumer desire for more authentic, locally produced British products. For example, TGI data shows that 48% of people buy goods produced in their own country whenever they can, an increase of 10 % points since 2005.
  • Health benefits are most likely to persuade consumers to dig deeper into their pockets. For example, 18 million UK consumers would be willing to pay more for a soft drink with natural ingredients; while, 16 million would do so if the drink contained healthier ingredients; or if there was low sugar/calorie content without compromising taste.
  • Targeting mealtime occasions either in-home or the on-trade is a prime opportunity. For example, 20 million UK adults are most likely to buy a soft drink to accompany a meal in pubs/bars/restaurants, with 18 million doing the same for meals at home.

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Table of contents

  1. Issues in the Market

      • Definition
        • Abbreviations
        • Future Opportunities

          • Authenticity through local community
            • Relax and smell the roses
              • Purity of these products gives them a natural positioning
              • Market in Brief

                • A market of great potential
                  • What consumers will pay more for
                    • Targeting mealtime occasions is key
                      • Market forecasted to grow healthily
                      • Internal Market Environment

                        • Key points
                          • A drive towards premiumisation
                            • Figure 1: Trends for statement on premium spending, 2005-09
                          • What has the economic downturn meant for premiumisation?
                            • Figure 2: Changing grocery shopping habits, Jan 09-Oct 09
                          • Health remains a key driver
                            • Figure 3: Trends in statements on health/diet, 2005-09
                          • Health messages slowly changing drinking culture
                            • Figure 4: Alcohol consumption trends, 2005-09
                          • Locality increasingly seen as more authentic
                            • Figure 5: Trend in statement on British provenance, 2005-09
                          • The increasing importance of the in-home market
                            • Figure 6: Drinking trends, 2005-09
                          • Capitalising on nation’s love affair with food
                            • Figure 7: Proportion who cook from scratch and how this has changed over the past year, December 2009
                          • Some soft drinks are more premium than others
                          • Broader Market Environment

                            • Key points
                              • Legislation
                                • A forced shift from kids to adults
                                  • Health benefits under the spotlight
                                    • On-trade legislation works in soft drinks favour
                                      • Increasing importance of the grey pound
                                        • Figure 8: Total population, by age, 2004-14
                                      • Societal changes underpin rise in premiumisation
                                        • Figure 9: Changes in UK adult population, by socio-economic group, 2004-14
                                      • Signs of a (slow) economic recovery
                                        • Figure 10: UK Consumer Confidence Index, January 2007-November 2009
                                    • Competitive Context

                                      • Key points
                                        • An increasingly competitive market
                                          • Figure 11: Trends in penetration of non alcoholic drinks, by drink type, 2005-09
                                          • Figure 12: Trends in consumption and spend on soft drinks, 2003-08
                                        • Carbonated soft drinks are getting healthier
                                          • Recession changes dynamics of soft drinks market
                                            • Figure 13: Changes in penetration of non-alcoholic drinks, pre- and post- economic downturn, by drink type, 2005-09
                                        • Strengths and Weaknesses in the Market

                                          • Strengths
                                            • Weaknesses
                                            • Who’s Innovating?

                                              • Key points
                                                • Flavours get more adventurous
                                                    • Figure 14: Trends for flavour component of fruit/still drinks, 2006-09
                                                  • Fentimans courts curiosity
                                                    • Premium in a can
                                                      • Premium mixer
                                                        • New releases in 2009
                                                        • Market Size and Forecast

                                                          • Key points
                                                            • Market proves its resilience despite the recession
                                                              • Market has plenty more potential to grow
                                                                • Figure 15: Value and volume sales of the premium soft drinks market, 2004-14
                                                              • Factors used in the forecast
                                                              • Channels to Market

                                                                • Key points
                                                                  • Off-trade drives majority of sales...
                                                                    • ... but pubs represent an opportunity
                                                                      • Steadily growing their supermarket shelf-space
                                                                        • Figure 16: Trends in online supermarket activity for premium soft drinks, December 2007-November 2009
                                                                      • However, discounting is being used with more frequency
                                                                        • Figure 17: Trends in online supermarket discounting for premium soft drinks, December 2007-November 2009
                                                                      • Consumers prefer a big, weekly shop
                                                                        • Figure 18: Consumer food shopping habits, September 2009
                                                                    • Companies and Products

                                                                      • Key points
                                                                        • Belvoir Fruit Farm
                                                                          • Bottlegreen Drinks Company
                                                                            • Britvic
                                                                              • Clives Fruit Farm
                                                                                • Coca-Cola
                                                                                  • Duchy Originals
                                                                                    • Ella Drinks Limited
                                                                                      • Feel Good Drinks
                                                                                        • Shloer (SHS)
                                                                                          • Thorncroft
                                                                                          • Brand Communication and Promotion

                                                                                            • Key points
                                                                                              • Adspend predominantly below-the-line
                                                                                                • Figure 19: Premium soft drinks adspend, 2007-09*
                                                                                              • Appletiser invest the most in 2009
                                                                                                • Figure 20: Premium soft drinks adspend, by brand, 2007-09*
                                                                                              • Primarily print
                                                                                                • Figure 21: Premium soft drinks adspend by media type, 2007-09*
                                                                                            • Consumer Usage

                                                                                              • Key points
                                                                                                • Awareness is a problem
                                                                                                    • Figure 22: How many drinks in the premium soft drinks market people are aware of, December 2009
                                                                                                  • Only Shloer and Appletiser stand out
                                                                                                      • Figure 23: Usage and awareness of selected premium soft drinks over the past year, December 2009
                                                                                                    • Premium soft drinks too often go unnoticed in supermarkets
                                                                                                      • Highlighting premium soft drinks as an alternative to alcohol
                                                                                                        • A chance to appeal more to an older audience
                                                                                                            • Figure 24: Penetration of premium soft drinks in the past year, by key demographics, December 2009
                                                                                                          • Has the recession helped increase frequency of usage?
                                                                                                            • Figure 25: Trends in frequency of drinking flavoured water, herbal and premium soft drinks, 2005-09
                                                                                                        • Consumer Attitudes – Drinking Occasions

                                                                                                          • Key points
                                                                                                              • Figure 26: Which occasions people are most likely to buy a soft drink, December 2009
                                                                                                            • Seeking an alternative to alcohol
                                                                                                              • Mealtimes is key to increasing frequency of usage
                                                                                                                • Targeting separate occasions for women and men
                                                                                                                    • Figure 27: Net difference* between female and male preferred soft drinking occasions, December 2009
                                                                                                                • Consumer Attitudes – Reasons to Pay More for a Soft Drink

                                                                                                                  • Key points
                                                                                                                    • People will pay a premium for health
                                                                                                                        • Figure 28: Which occasions people are most likely to buy a soft drink, December 2009
                                                                                                                      • Women attracted by the drink’s inner qualities
                                                                                                                          • Figure 29: Net difference* between qualities women and men would pay more for in a soft drink, December 2009
                                                                                                                        • Appeal to older people needs to be converted into sales
                                                                                                                            • Figure 30: Index for which qualities in soft drinks 45+ would pay more for, December 2009
                                                                                                                        • Targeting Opportunities

                                                                                                                          • Key points
                                                                                                                            • Figure 31: Premium soft drinks attitudinal groups, December 2009
                                                                                                                          • Self Indulgers
                                                                                                                            • Safety First
                                                                                                                              • Price Led
                                                                                                                                • Bare Necessities
                                                                                                                                    • Figure 32: Premium soft drinks attitudinal groups, by statements they agree with, December 2009
                                                                                                                                • Appendix

                                                                                                                                  • Consumer research
                                                                                                                                    • ACORN
                                                                                                                                      • Advertising data
                                                                                                                                      • Appendix – Broader Market Environment

                                                                                                                                          • Figure 33: Trends in PDI and consumer expenditure, 2004-14
                                                                                                                                      • Appendix – Consumer Usage

                                                                                                                                          • Figure 34: Usage and awareness of Shloer, by demographics, December 2009
                                                                                                                                          • Figure 35: Usage and awareness of Fentimans, by demographics, December 2009
                                                                                                                                          • Figure 36: Usage and awareness of Feel Good Drinks Company, by demographics, December 2009
                                                                                                                                          • Figure 37: Usage and awareness of Bottlegreen, by demographics, December 2009
                                                                                                                                          • Figure 38: Usage and awareness of Belvoir, by demographics, December 2009
                                                                                                                                          • Figure 39: Usage and awareness of Appletiser (including Peartiser), by demographics, December 2009
                                                                                                                                      • Appendix – Drinking Occasions

                                                                                                                                          • Figure 40: Occasions that consumers are most likely to buy soft drinks, by demographics, December 2009
                                                                                                                                          • Figure 41: Occasions that consumers are most likely to buy soft drinks, by demographics, December 2009 (continued)
                                                                                                                                      • Appendix – Reasons to Pay More for a Soft Drink

                                                                                                                                          • Figure 42: Factors for worth paying more for a soft drink, by demographics, December 2009
                                                                                                                                          • Figure 43: Factors for worth paying more for a soft drink, by demographics, December 2009 (continued)
                                                                                                                                          • Figure 44: Factors for worth paying more for a soft drink, by demographics, December 2009 (continued)
                                                                                                                                      • Appendix – Targeting Opportunities

                                                                                                                                          • Figure 45: Premium soft drink attitudinal groups, by demographics, December 2009
                                                                                                                                          • Figure 46: Premium soft drink attitudinal groups, by occasions when they buy a soft drink, December 2009
                                                                                                                                          • Figure 47: Premium soft drinks attitudinal groups, by which factors they think it is worth paying more for when they buy a soft drink, December 2009
                                                                                                                                          • Figure 48: Premium soft drinks attitudinal groups’ awareness and penetration of premium and standard soft drinks

                                                                                                                                      Companies Covered

                                                                                                                                      • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                      • Anheuser Busch-InBev
                                                                                                                                      • Asda Group Ltd
                                                                                                                                      • Belvoir Fruit Farms
                                                                                                                                      • British Beer and Pub Association
                                                                                                                                      • British Market Research Bureau (BMRB)
                                                                                                                                      • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                      • Britvic Soft Drinks
                                                                                                                                      • BT Group plc
                                                                                                                                      • CACI Limited
                                                                                                                                      • Co-operative Group
                                                                                                                                      • Coca-Cola Enterprises Ltd
                                                                                                                                      • Danone UK Ltd
                                                                                                                                      • Duchy Originals
                                                                                                                                      • Facebook, Inc.
                                                                                                                                      • Food Standards Agency
                                                                                                                                      • Gfk NOP
                                                                                                                                      • HomeChoice
                                                                                                                                      • J. Sainsbury
                                                                                                                                      • Lidl (UK)
                                                                                                                                      • Marks & Spencer
                                                                                                                                      • Office for National Statistics
                                                                                                                                      • Outdoor Advertising Association of Great Britain
                                                                                                                                      • Pepsi-Cola UK
                                                                                                                                      • Red Bull UK
                                                                                                                                      • T-Mobile (UK) Ltd
                                                                                                                                      • Tesco Plc
                                                                                                                                      • The Feel Good Drinks Company
                                                                                                                                      • Twitter, Inc.
                                                                                                                                      • Virgin Media Ltd
                                                                                                                                      • Virgin Mobile
                                                                                                                                      • VisitScotland
                                                                                                                                      • Waitrose

                                                                                                                                      Premium Soft Drinks - UK - January 2010

                                                                                                                                      £1,995.00 (Excl.Tax)