- Soft drinks sales in foodservice hit a value of more than £2.9bn last year, up +66.1% on 2020 levels[1]
- The latest Britvic Soft Drinks Review reveals opportunities for growth for foodservice outlets, with the food to go market set to reach a value of £22.2bn in 2023[2]
- Britvic calculates that out of home operators could deliver a sales boost of up to £170mby encouraging 10% consumers to trade up from tap water to a soft drink[3]
The foodservice market is at a crossroad, according to the latest Britvic Soft Drinks Review, with current economic pressures continuing to have an impact on the channel. At a time when the market is experiencing polarisation between value and premium when it comes to consumer preferences, soft drinks provide a refreshing opportunity for growth, particularly in light of the food to go market set to reach a value of £22.2bn in 2023.[4] Soft drinks sales through Britain's foodservice sector surged by +66.1% on 2020 levels to hit a value of more than £2.9bn[5], and Britvic’s Soft Drinks Review 2023 delves into the role soft drinks has in helping operators continue to weather the storm.
Overall, the foodservice market is in volume decline on pre-pandemic levels, with value up just +4.0% on 2019[6] and 38% of consumers saying they are eating out less frequently due to finances.[7] While this paints a challenging picture for operators, the food-to-go market is showing signs of recovery post pandemic which Britvic highlights as an area of opportunity. In 2022, the overall value of the eating-out market hit £95.2bn, up +44% on 2021, when trade was stifled by lockdowns and restrictions on socialising[8] – and the food-to-go revival looks set to continue with the market expected to reach a total value of £24.3bn by 2026.[9] This is being driven partly by technology – more consumers are expected to cut spend on dining out and order through delivery apps in 2023.[10] The rise in hybrid working could also benefit foodservice outlets – with people spending fewer working days in the office, they’re likely to spend more on lunch and drinks when they do.[11]
Dino Labbate, GB commercial director for hospitality at Britvic, comments: “What we can see from last year, is that the foodservice market is polarising between value and convenience-led missions on the one hand, and less frequent but more indulgent, premium occasion-led missions on the other.[12] This represents a real opportunity for foodservice outlets that can adapt their offer to serve both audiences. Our annual Soft Drinks Review reveals that soft drinks are continuing to perform well, driven by strong performances from still juice drinks, pure fruit juices and flavoured carbonates.[13] As a resilient category, we’re confident that soft drinks can offer opportunity to operators in these challenging times – everyone from fast food and coffee shop operators, to contract caterers and workplace venues. But they will need to rethink their soft drinks offering in order to make a difference.”
The trade up opportunity
Offering greater choice, paying close attention to how drinks are served and encouraging people to trade up are just a few of the key takeaways from the Britvic Soft Drinks Review that can pay big dividends for operators. Britvic calculates that simply encouraging 10% of diners to trade up from tap water to a soft drink could deliver an extra £170m and convincing them to buy an elevated soft drink such as a Pepsi MAX with a shot of Mathieu Teisseire could unlock a sales opportunity worth a whopping £123m.[14]
Labbate continues: “One way of encouraging customers to trade up is by pairing more premium soft drinks with popular food. For example, London Essence Company Spiced Ginger Beer or Delicate Ginger Ale complements the spice of curry dishes, while fried chicken can benefit from being paired with J2O Spritz Apple & Elderflower or Pear & Raspberry. Pairing food with drinks in promotions can also help operators enhance customer perceptions of value and increase average spend by encouraging diners to buy a greater number of items per visit, while helping customers feel they are getting value for money. Pairing soft drinks such as Pepsi MAX or 7UP Zero Sugar with crisps, nuts or baked goods can help raise average spend throughout the day, as can linking fruit, nuts and other snacks with health-focused drinks such as Aqua Libra or Purdey’s.”
Refreshing the approach to meet consumer demands
One of the key trends highlighted in the report is a growing demand for elevated experiences. Despite the squeeze on discretionary spend, Britvic believes that consumers still want to indulge when they go out to eat and drink so it’s crucial that operators continue to give diners experiences that cannot be replicated elsewhere. This is especially important for younger consumers – research shows that 69% of those aged 16 to 24 and 64% of those aged 25 to 34 would rather spend their money on experiences than physical goods; in comparison to just 41% of those aged over 55.[15]
The report also highlights ‘health’ as another consumer trend which is gaining momentum. In 2022, 46% of British adults described themselves as “very health conscious,” up from 43% in 2021.[16] And foodservice operators are changing their menus in response. Natural, low caffeine and energy boosting ingredients with added health benefits such as supporting immunity and reducing stress and fatigue are increasingly featuring in hot and cold beverages.[17]
Labbate concludes: “The soft drinks category is supremely versatile and the value it can bring to the sector shouldn’t be underestimated. Whether consumers 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.”
Download the Britvic Foodservice 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 On Premise Measurement Data FS&Licensed MAT data to 31/12/2022
[2] Lumina Food to Go report February 2023
[3] 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
[4] Lumina Food to Go report February 2023
[5] CGA On Premise Measurement Data FS&Licensed MAT data to 31/12/2022
[6] Lumina-Intelligence-UK-Eating-Out-Market-Report-2022 P5
[7] CGA Cost of Living Consumer Pulse (1,032 UK&I Consumers) December 2022
[8] Lumina-Intelligence-UK-Eating-Out-Market-Report-2022 P5
[9] Lumina Food to Go report February 2023
[10] IGD eating in vs eating out October 2022
[11] IGD Eating in vs eating out 2022 P24 – IGD Research, 1,685 British shoppers who regularly eat out – 18/19 July 2022
[12] Lumina-Intelligence-UK-Eating-Out-Market-Report-2022 P4
[13] CGA On Premise Measurement Data FS&L MAT data to 31/12/2022
[14] 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 £3.70
[15] KAM - Competitive Socialising – February 2022.pdf P6
[16] Lumina Intelligence, Menu & Food Trends Report, 2022 P6
[17] IGD, eating in vs eating out, October 2022
