- Britain's pubs, clubs and other licensed venues have been reborn in the past year, with sales of soft drinks surging by 60.3% and volumes up 53.2%[1]
- The cost of living crisis is continuing to bite, with 38% of Brits reporting that they are going out to eat and drink less often[2], with 72% citing cost of living concerns [3]
- Britvic's Soft Drinks Review 2023 reveals advice for venues during these challenging times, and calculates that out of home operators could deliver a sales boost of up to £170m by encouraging 10% consumers to trade up from tap water to a soft drink[4]
Licensed venues operating in Britain are at a pivotal moment and the industry needs to rethink their drinks offering in order to stay ahead of the game. This is just one of the insights from Britvic's latest Soft Drinks Review, which has revealed that soft drinks are having a renaissance within the channel.
At a time when one in three adults say they now rarely or never drink alcohol,[5] there are huge opportunities for licensed venues to re-evaluate their approach to soft drinks and the way they serve alcohol-free options. Britvic estimates that by adapting their offering, out of home operators stand to yield a sales boost worth a staggering £170m by encouraging 10% consumers to trade up from tap water to a soft drink.[6]
“As consumers curb their alcohol consumption, particularly millennials[7] and Generation Z[8], soft drinks are well and truly in the limelight,” comments Dino Labbate, GB commercial director for hospitality at Britvic, “Soft drinks have obviously always been crucial to the licensed sector, accounting for 27% of volume and 17% of value during last year.[9] But, this year our Soft Drinks Review really highlights the size of the prize available to operators who are able to adapt to keep pace with consumers’ changing needs. We’re expecting low and no alcohol on-trade volumes to grow by a huge 48% to 117 million litres by 2027, with higher average prices pushing value sales up by 69% to £432m.”[10]
Labbate continues, “That’s why we’re challenging ourselves and licensed venues to rethink soft drinks. Our Soft Drinks Review shows that consumers want compelling non-alcoholic drinks options with real wow factor – as good as, if not better than, the hard stuff. We want operators to take stock this year, rethink your range, how you’re serving it and what you’re pairing it with. Think sophisticated in-house mocktails and exciting flavours like Roasted Pineapple and White Peach & Jasmine Crafted Sodas from The London Essence Company. While there will always be an important place for Pepsi MAX and 7UP Zero at the bar, soft drinks can also offer so much more at a time when we know guests are on the hunt for elevated experiences.”
The alcohol moderation movement isn’t the only challenge facing the industry. Although soft drinks sales in licensed venues surged to just shy of £4.6 billion in 2022[11], Britvic believes that the pandemic has had an undeniable impact on what consumers want from a night out. The cost of living crisis hasn’t helped either – 38% of Brits report that they are going out to eat and drink less often;[12] 72% cite cost of living concerns, 58% cite price increases in venues and 53% cite a decline in their disposable income[13] as reasons why they are spending less.
Labbate concludes, “In the current climate, consumers need more reasons than ever to go out and spend; this explains some of the new trends we’re seeing. For example, 88% of consumers say they want bars and pubs to provide them with an experience they can’t get at home.[14] As a result, we’re seeing venues really up their game by developing experiences that can’t be recreated at home. Operators who can follow suit and rise to the challenge will reap the rewards. We know it’s not easy so our Soft Drinks Review is packed full of insights and tips on how operators can drive further growth in soft drinks.”
Making the most of consumer trends
There have been a number of shifts in consumer trends, which should be key considerations for operators looking to adapt. It’s become very much quality over quantity. Overall, 35% of consumers say they are drinking fewer drinks when they go out with 11% say they are choosing higher quality drinks.[15] What’s more, 32% of consumers have increased their overall spend on cocktails[16] and 92% say they are now choosing cocktails that are better quality, or of the same quality, when they go out for a drink.[17] Consumers are associating ‘additional health benefits’ with quality too, with 45% equating such benefits with value and 43% stating that they value claims relating to naturalness.[18]
Top tips to help licensed operators adapt their non-alcoholic drinks offerings:
- Provide an elevated soft drinks selection that rivals the alcoholic options on offer, think elegant glassware with ice, beautifully presented with garnishes. The Mathieu Teisseire range of flavoured syrups is a simple solution to injecting excitement into non-alcoholic ranges
- Consider pairing food with premium soft drinks, such as J2O, that offer greater depth of flavour – 79% of food consumed out of home in Britain is served with a soft drink[19]
- Encourage drinkers to trade up – Britvic estimates that 10% of tap water drinkers trading up from[20]:
- water to soft drinks = £170m sales boost
- soft drink to an elevated soft drink = £123m sales boost
- Spirits and mixers are highly profitable, offering an average margin per typical outlet of more than 80%.[21] Licensed operators should stock up on premium mixers to push those margins higher. Add a touch of excitement to your range with products such as London Essence Company’s Original Indian Tonic, warming Pomelo & Pink Peppercorn and zesty Blood Orange & Elderflower Tonic waters
- Give people more reasons to go out by developing experiences that cannot be recreated at home – 69% of those aged 16 to 24 and 64% of those aged 25 to 34 would rather spend their money on experiences instead of physical goods[22]
Download the Britvic Licensed Soft Drinks Review
Notes to Editors:
For further press information or to request any infographics from the report, please contact the Britvic team at Cirkle via britvic@cirkle.com
All reader enquiries should be directed to: Customer Services, Britvic Soft Drinks on 0345 7581781
[1] CGA, Licensed, Value and Volume data, MAT to 31.12.2022
[2] CGA Cost of Living Consumer Pulse December 2022 UK & Ireland – P13
[3] CGA Cost of Living Consumer Pulse December 2022 UK & Ireland – P14
[4] CGA, November 2022, calculations based on 500m tap water occasions, trading up 10% of tap water consumers to a soft drink, or an elevated soft drink, based on a soft drink cost of £2.52 and elevated cost of £3.7
[5] Lumina Intelligence, Menu & Food trends report December 2022
[6] CGA, November 2022, calculations based on 500m tap water occasions, trading up 10% of tap water consumers to a soft drink, or an elevated soft drink, based on a soft drink cost of £2.52 and elevated cost of £3.7
[7] Beresford Research - https://www.beresfordresearch.com/age-range-by-generation
[8] Beresford Research - https://www.beresfordresearch.com/age-range-by-generation
[9] Rethink Drink P2/CGA 12 w/e 18 June 2022
[10] Mintel ATTITUDES TOWARDS LOW AND NO-ALCOHOL DRINKS UK, August 2022
[11] CGA, licensed, value data, MAT to 31.12.2022
[12] CGA Cost of Living Consumer Pulse December 2022 UK & Ireland – P13
[13] CGA Cost of Living Consumer Pulse December 2022 UK & Ireland – P14
[14] KAM - Competitive Socialising - Feb 22.pdf P5
[15] CGA Cost of Living Consumer Pulse December 2022 UK & Ireland – P16
[16] CGA mixed drinks report Q3 2022
[17] CGA mixed drinks report Q3 2022
[18] Mintel: Recession and the cost of living crisis: Key challenges and opportunities for brands in the UK January 2023
[19] Kantar, OOH Panel, MAT data to 25.12.22, +10% vs 2021
[20] CGA, November 2022, calculations based on 500m tap water occasions, trading up 10% of tap water consumers to a soft drink, or an elevated soft drink, based on a soft drink cost of £2.52 and elevated cost of £3.7
[21] CGA Cost of Living Consumer Pulse December 2022 UK & Ireland – P7
[22] KAM - Competitive Socialising - Feb 22.pdf P6
