Soft drinks critical in foodservice path to recovery

• Britvic’s latest Soft Drinks Review has identified the role the category has to play in helping outlets recover this year and beyond

• As 74% of consumers state they are eating and drinking more healthily than before the pandemic¹, operators must adapt to changing customer demands

• 60% of soft drinks consumers state they opt for healthy drinks most of the time, but flavour remains the top attribute in making choices² - demonstrating the opportunity for healthier alternatives from well established brands

The foodservice sector lost 362.1 million litres of soft drinks sales over the past year, equating to 145 Olympic swimming pools³, according to the latest Britvic Soft Drinks Review. The Foodservice report showcases that this part of the soft drinks market closed 2020 at -37.2% in value, and -33.5% in volume, versus 2019⁴.

The report highlights that at a time when the channel is re-opening and planning its road to recovery, soft drinks can play a crucial role here to help meet the change in consumer needs. According to CGA⁵, there is a view that the market may become polarised - some consumers seeking value while others look to trade up their experiences - representing a real opportunity for foodservice outlets that can adapt their offer to serve both audiences.

The versatility and breadth of the soft drinks category allows operators to meet various consumer demands. Whether guests are looking for a meal deal that includes an on the go drink, a more premium experience when dining in or healthier alternatives that continue to perform well in light of a renewed focus on wellbeing – there is something for everyone. Alongside an eagerness among consumers to return to the channel, all is not doom and gloom.

A TOUGH START TO THE YEAR

By the time the lockdown was announced in March 2020, UK retail footfall was already down over 34%⁶, creating even more difficulties for foodservice as consumer habits were impacted by health and safety concerns.

Adam Russell, director of foodservice & licensed, at Britvic, comments: “While the foodservice and hospitality sector has experienced and overcome challenges before, the past year has been like no other. Due to restrictions and the ‘stay at home’ rule during the first lockdown, travel and leisure were the most impacted sub-channels, followed by workplaces, education and high streets as workers and students avoided commuting.

“Quick service restaurants (QSR) proved to be the most resilient foodservice channel for soft drinks, accounting for 44.4% of total foodservice value sales in 2020, versus 35.5% in 2019⁷. Its buoyancy meant the trusted cola and flavoured carbonates brands thrived over this period as ideal pairings with food. As a result, Pepsi performed well with value (+3.1%) and volume (+3.8%) share increases⁸, and Tango and 7UP grew +3.0% and +2.6% respectively⁹ - something we expect to continue.”

ADAPTING FOR THE FUTURE

As the growing demand for delivered food and drink continues, and the pandemic accelerating the online trend by 10 years¹⁰, the QSR segment is expected to continue to deliver strong results. Soft drinks saw strong growth in fast food quick service restaurants, with the foodservice channel’s soft drinks volume share up +9.6% in November/December 2020¹¹. Other sectors will need to adapt their service offer to keep up with evolving trends and consumer behaviours.

Russell continues: “Despite the backdrop of the last year, the roadmap out of lockdown is in full swing and it’s promising to see consumers excited to socialise again out of home. We’re confident that the soft drinks category has a vital role to play in helping cater to new consumer needs, in particular the renewed focus on healthier options.”

During the course of the pandemic, it has shone a light for many on their health and wellness – and the food and drink choices they make as a result. Within foodservice, sugar free soft drinks have grown at +4.5% in value, while full sugar has lost -3.6%¹² - demonstrating the appetite consumers have for healthier alternatives. In turn, the wellness drinks category is worth a huge £240.1m and offers opportunity for further growth¹³.

Russell concludes: “Offering a broad portfolio of low and no sugar options, we are ideally placed to supply operators with big name brands such as Pepsi MAX, Tango Sugar Free and 7UP Free – those consumers trust for great taste and quality. In addition, Purdey’s, the UK’s leading sparkling vitality brand, is perfectly placed to lead the wellness soft drinks category. Made with naturally sourced ingredients - real fruit juice, boosted by botanicals and energising B vitamins - it offers a no added sugar energy lift. Consumers who buy into wellness out of home have a higher spend per trip (+15%) compared to total single serve drinks out of home¹⁴, so we encourage outlets to include the three-strong line up as part of their offering to take advantage of this growing opportunity.”  

STEPS TO SOFT DRINKS SUCCESS

Within the Soft Drinks Review, Britvic has analysed the influences that impact successful path to purchase for consumers, leading to the creation of seven steps to improve soft drink sales in the foodservice channel. The top three are:

• OUTLET OF CHOICE – Give customers reasons to visit. Make sure they know why to visit your outlet over any other for their mission or occasion
• EASY TO NAVIGATE – Make it easy for customers to quickly find their way to soft drinks
• HOT ON HOTSPOTS - Site soft drinks at multiple points on their journey, influencing their decision to buy

The Britvic Foodservice Soft Drinks Review is available to download here: https://www.paperturn-view.com/?pid=MTY160800

Notes to Editors:
For further press information or to request any infographics from the report, please contact the Britvic team at Cirkle.

Contact:
Email: britvic@cirkle.com
Tel: 01494 731 750

All reader enquiries should be directed to: Customer Services, Britvic Soft Drinks on 0345 7581781

¹ Lumina Intelligence channel pulse 2020
² Mintel soft drinks report 2019
³ 2020 Absolute Volume lost -362.1million/2.5million litres (Olympic Swimming Pool Volume)
⁴ CGA Foodservice, Value and Volume, MAT TY w.e. 31.12.2020
⁵ CGA Brand Track June 2020
⁶ Statista - Impact of Covid-19 on year-on-year change in footfall in retail locations in the United Kingdom (UK) during March 2020, by region in https://www.statista.com/statistics/1107894/y-o-y-footfall-growth-during-coronavirus-in-the-uk-by-region/
⁷ CGA Foodservice, Value and Volume, MAT TY w.e. 31.12.2020
⁸ CGA Foodservice, Value and Volume, MAT TY w.e. 31.12.2020
⁹ CGA Foodservice, Value and Volume, MAT TY w.e. 31.12.2020
¹⁰ CGA & Zonal Go Technology Nov 2020 (1 & 3) CGAs Business Confidence Q3 2020
¹¹ 'CGA Foodservice, Volume and Value, Latest 2 months, w.e. 31.12.2020
¹² CGA Total FS&L Update 31.12.2020 / MAT
¹³ NielsenIQ RMS, Total Coverage, Britvic Defined Wellness Drinks Penetration Value Sales, 52 w.e. to 02.01.2021
¹⁴ Kantar Out of Home Panel, KPIs, Wellness & Total Single Serve Drinks, 52 w.e. 09.08.2020