If in 2016 you resolved to cut your sugar intake, you might be surprised to hear that, in 2017, the often-scapegoated soft drinks sector will be one of the best places to turn for a healthy lifestyle change. In March 2016, Bar Magazine reported that premium soft drinks sales have been growing to match those of spirits and beer, suggesting that we can expect to see non-alcoholic beverages increase in market stake even beyond the typical temporary boom in January. These changes will potentially form the start of a total overhaul in how consumers approach beverages in bars and restaurants. Whether you enjoy a tipple and are trying to cut down your drinking in the New Year, or are simply aiming to reduce your sugar intake, soft drinks may well feature prominently on your bar tab this year.
Britvic’s annual Soft Drinks Review showed that spending on premium mixers grew by 14 per cent in 2015, which Ruth Scullin, senior category manager at the company, said provided a “real opportunity” for 2016, one which has been capitalised upon by shrewd soft drinks companies across the past year. This opportunity has been tapped into through premiumisation itself. Scullin continues:
“Consumers are looking for something that has heritage and a back story and provides taste profiles that suit them as adults, and they are prepared to pay a premium.”
It’s perhaps no surprise that, as consumers, we are bored of standard lemonades and colas – soft drinks in the bar are no longer being treated merely as a filler to help the spirit ‘go down’, but as major elements of any beverage – alcoholic or not.
The soft drinks industry has already been reaping the rewards of this growth in popularity, with sales growing by 4.3 per cent in value during 2016 to more than £4.1bn. The boost comes primarily from the dining sector. Britvic found that individuals were more likely to invest in premium soft drinks when drinking or eating out. As Bar Magazine states, this created a reciprocal benefit: “Restaurants, hotels, and food-led pubs benefitted from consumers eating out more, with these outlets contributing to 96% of overall soft drinks growth.”
Our perpetual longing to sample something different is leading not only to a sector-wide growth, but also to the development of customisation as a key trend that is set to explode in 2017. Scullin explains that “Demand for personalisation increases. What consumers really want when they go out is something they can’t easily replicate at home.”
With this bespoke experience comes not only a desire for aesthetics and atmosphere, but for the more basic cornerstones of quality. Establishments must remember that many consumers place increasing value on health credentials and alcohol moderation when choosing soft drinks – aspects that we in the industry cannot afford to overlook. In fact, in Britvic’s research, low-calorie purchases accounted for 27% of soft drinks sales. Britvic also predicts an enthusiasm for “vitality” products infused with fresh fruits, botanical extracts, and vitamins.
An absence of alcohol is also a key component driving the choice of soft drinks. The Morning Advertiser reports that this is largely due to the fact that we are dining out for breakfast and lunch more regularly, as well as choosing meals where the average person doesn’t fancy a pint of beer or a spirit and mixer. According to Scullin, 45 per cent of breakfasts and 55 per cent of lunches featured a soft drink in 2015-16. These trends are set only to expand.
More specific sub-sectors of the soft drinks field are also growing. Mintel’s November 2016 Quarterly Statement suggests that the final quarter of 2016 marked “a busy quarter of acquisition and consolidation as operators seek to maximize the pockets of opportunity in enhanced water and RTD (Ready To Drink) tea.” These might not seem like direct competitors to alcoholic drinks, but with our growing understanding of the dangers of excessive sugar consumption, soft drinks may be the only option, with alcohol inherently containing high levels of the substance. In a juice, sugar can be replaced with agave syrup or honey. This is not possible in a spirit or beer.
Whilst there are certain scenarios in which alcoholic beverages may always be the main stay, the place of soft drinks is expanding by the year. As Scullin concludes, “In 2016 and beyond, there is a huge opportunity in licensed and leisure to showcase soft drinks as relevant and exciting offerings suitable for consumption across a wide variety of on-the-go and social occasions.” Now is the time to act if we wish to keep up with the alcohol-free, health-conscious and seeking consumer.