Soft drinks set to support hospitality recovery

• Britvic’s latest Soft Drinks Review has identified the role the category has to play in helping outlets recover this year and beyond, particularly in catering for the demand of low and no alcohol alternatives

• The impulse for alcohol moderation is strong among both the younger and older demographics, rising to 36% of 18-24s and 27% of over 55s¹

• 2021 saw a record 6.5 million people join in with the biggest Dry January event so far² and a massive 10.4 million adults in the UK population (20.4%) now describe themselves as teetotal³

The licensed sector lost 449.3 million litres of soft drink sales over the past year, the equivalent of around 180 Olympic swimming pools⁴ and approximately 80% more than the volume sales lost in foodservice. According to the latest Britvic Soft Drinks Review, the soft drinks category in this sector delivered just 39.5% of the value sales and 39.4% of the volume sales achieved in 2019⁵.

One of the worst affected areas by the COVID-19 pandemic, the licensed trade has proven its resilience in the past and Britvic has identified soft drinks as having a critical role to play in the sector’s road to recovery. The popularity of non-alcoholic drinks has been growing steadily as people turn to healthier options. Furthermore, consumers stated that when the trade reopened, they were intending to choose low and no alternatives⁶ over drinks containing alcohol – demonstrating the need for outlets to adapt.

A TOUGH START TO THE YEAR

By the time the lockdown was announced in March, UK retail footfall was already down over 34%⁷ as consumer habits were impacted by health and safety concerns. A total of 9,930 sites closed across Britain last year, with casual dining suffering the largest loss at -9.7%, losing 648 sites in all. Sport and social clubs were also heavily impacted, with 1,439 sites disappearing, a -6.2% decline⁸.

Adam Russell, director of foodservice & licensed, at Britvic, comments: “The licensed channel has been dealt a series of difficult and unfortunate blows over the course of the pandemic, with a total of 19 weeks of closure and lockdown tiers across the country. It’s no surprise that the different on-trade channels all showed significant losses as a result, but when allowed to reopen, some operators captured more soft drinks sales than others, with local food-led pubs and community pubs leading the way. It was certainly reassuring to see that towards the end of the summer, footfall was showing steady improvement.”

Despite the sales decline in absolute terms, those consumers who opted for soft drinks in licensed outlets, when open, favoured cola brands. Cola was the only category to win share, while mixers’ share fell most of all⁹. As a result, Pepsi gained ground in the cola category, reaching 37.1% in value and 40.8% in volume, adding +0.9% and +0.6%¹⁰.

As re-opening continues, mixers will have a renewed part to play as summer fast approaches and consumers look to elevate their out of home experiences. This was a trend gaining momentum prior to the pandemic, but after being confined to houses and gardens for socialising for some time, this has been accelerated. As a result, premium mixers now account for 42% of all mixers value, growing +20% year-on-year¹¹. This has been driven by luxury options such The London Essence Company and is something outlets can capitalise on, encouraging people to trade up by stocking such brands.

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. CGA data shows that like-for-like sales at pubs, bars, and restaurants that were trading in the seven days from 12th April were 45% higher than in the week from 4th July 2020¹², which is a really encouraging start to re-opening. We are committed to helping operators on their journey to recovery and we’re confident that the soft drinks category has a vital role in helping cater to new consumer needs, in particular the move towards low and no alcohol options as a healthier alternative.”

ADAPTING FOR THE FUTURE

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. Alcohol moderation is one of the key measures being adopted, paving the way for alcohol alternatives. Just before the pandemic, the low and no alcohol category was reportedly worth £60m and growing +48% annually¹³. This is expected to have accelerated further and a clear opportunity is forming, as currently 28% of consumers order tap water when they want a non-alcoholic option in pubs and restaurants. If 200 visitors visit a pub in a day, 56 people could be spending £3-£5 on a low and no alternative. The missed sales could be as much as £100,000 or more per year for a pub¹⁴.

Russell concludes: “Based on the increase in UK adults looking for low and no alcohol alternatives, it is vital that licensed operators take note and put plans in place to cater for this demand. While a strong carbonates range from well-known brands is a good starting point, there is a bigger opportunity to go after in terms of wider soft drinks and the creation of mocktails – an alternative that attracts over eight million consumers each year¹⁵. Consumption of mixers on their own, rather than with spirits, is also growing and as guests seek new experiences, flavoured tonics have an important role, contributing to category growth and offering additional opportunities for solus consumption alongside mixed drinks.”

TOP TIPS FOR LOW AND NO SUCCESS

Within its Licensed Soft Drinks Review, Britvic has identified its top recommendations to help keep guests coming back for more, with three steps to success including:

• Make time for low and no: Explore day part opportunities and drinks that can satisfy multiple times of day
• Give low and no menu visibility: the menu is the first place consumers look to choose low and no drinks, with 45% using it to do so. Consumers also state that low and no should have its own section on the menu¹⁶.
• Make low and no visible at the bar: In licensed outlets, product visibility is key. 59% of consumers claim it is either difficult or very difficult to see what cans or bottles in the fridge behind the bar are low or non-alcoholic versions of alcoholic drinks¹⁷. Stronger shelf call-out, more prominent displays and POS are all critical components in ensuring that your products are seen first and foremost.

The Britvic Licensed Soft Drinks Review is available to download here: https://www.paperturn-view.com/?pid=MTY160799

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 www.alcoholchange.org.uk
² www.alcoholchange.org.uk
³ CGA No/Low alcohol report 2019
⁴ 2020 Absolute Volume lost -449.3million/2.5million litres (Olympic Swimming Pool Volume)
⁵ CGA Licensed, Value and Volume, MAT TY w.e. 26.12.2020
⁶ Distill Ventures white paper May 2020
⁷ 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/
⁸ https://Info.Cga.Co.Uk/Marketrecoverymonitorjanuary2021
⁹ CGA Licensed, Value and Volume, MAT TY w.e. 26.12.2020
¹⁰ CGA Licensed, Value and Volume, MAT TY w.e. 26.12.2020
¹¹ NielsenIQ RMS, Total Coverage, Britvic Defined Premium Mixers Value, 52 w.e. to 26.12.2020 vs 2YA
¹² https://cgastrategy.com/sun-shines-on-hospitalitys-outside-sales-but-recovery-has-a-long-way-to-go/
¹³ CGA on premise measurement tool, value, MAT to October 2019
¹⁴ KAM media: The low & no opportunities for the off and on-trade, January 2021
¹⁵ CGA No/ Low alcohol report 2019
¹⁶ KAM media low & no report January 2021
¹⁷ Distill Ventures white paper May 2019