2023 Britvic Soft Drinks Review Licensed - Flipbook - Page 12
WELCOME
SUSTAINABILITY
CATEGORY OVERVIEW
Value engineering
Nevertheless, cost concerns are now almost universal.
60% of people say the cost-of-living crisis is their top
concern.13 Although consumer confidence steadily grew
in the final three months of the year after bottoming out
at -49 in September – the month of Liz Truss’s short
spell at Number 10 – 2022 still ended with confidence
down 27 points year-on-year.13
Operators in all channels are therefore having to
adapt to attract a new breed of value-conscious
consumers. Value-led messaging, promotions and loyalty
programmes have become the order of the day,14 with
everyone from supermarkets and fastfood operators to
high-end restaurants having to think on their feet to find
ways of encouraging people to spend.
price point in response to the economic crisis.15 Toby
Carvery is trying to drive mid-week footfall by offering
carvery roast dinners for £7.99 from Monday to Friday.14
Even renowned chefs are at it. Tom Kerridge has
launched a £15 set lunch menu at his double-Michelin
star pub, The Hand & Flowers.15 Kerridge has gone on
record saying that the deal is similar to an offer in the
2008 recession that “made absolutely no money but
filled the pub with noise, excitement and laughter.”14
Pret A Manger is selling meal deals comprising a range
of sandwiches, snacks and soft drinks for as little as
£2.99 – undercutting even the supermarkets, which
have all migrated from the once standard £3 meal deal
Lipstick effect?
Sales data from 2022 gives further cause for excitement.
Britvic concludes that while inflation inevitably drove
value ahead of volume growth, this is not the only factor
that’s pushing top line growth. Increasingly, Britvic has
found that consumers are opting for more premium
drinks in formats suited for immediate consumption,
which offer retailers higher margins and a higher price
per litre. This suggests lucrative opportunities for
category expansion in the coming year.
Sports and energy drinks contributed most to category
growth, putting an extra £203m (13.6%) through tills in
2022.16 Volumes surged by 7.8%.16 Energy drinks have
an average price per litre of £3.17, versus a soft drinks
category average of £1.35/litre, making it clear how
such products can add value to the category. So too
can iced coffee and tea, which have an average price of
£3.92, and are growing at 22%.17
Driven by 2022’s scorching summer and consumers’
growing health consciousness (more on that shortly),
bottled water was the next biggest contributor to
growth, with sales up £178m, followed by cola (up by
£159m) and fruit carbonates (up £124m).17
13 Consumer Confidence GFK – December 2021 v December 2022
14 Lumina Intelligence, Menu & Food trends report, December 2022
15 Correct at time of print, May 2023
16 NielsenIQ RMS, Total Coverage, TSD Britvic Defined, MAT to 25/03/2023
17 NielsenIQ RMS, Total Coverage, Britvic Defined, MAT to 18/02/2023
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CATEGORY OVERVIEW
Limited edition flavours and marketing, much of it aimed
at recruiting Generation Z, have been key to cola and
fruity fizzy drinks’ growth.18
There’s growing evidence that soft drinks are benefitting
from the so-called “lipstick effect,” a phrase coined by
Estée Lauder in the Great Depression when cosmetics
sales rose as people tried to cheer themselves up by
buying affordable luxuries. Not only are more expensive
products such as energy drinks and RTD coffees in
strong growth, but brands are growing share in many of
the key soft drinks categories.