Christmas soft drinks: Drinks with a twist

Rightly or wrongly, Christmas is often dominated by alcohol, with late-night partying and relaxing in front of the fire with a glass of mulled wine. However, sales of premium adult soft drinks rocketed by 12.3% in 2016, and the proportion of adults who say they drink alcohol is at its lowest level since 2005. More than a quarter of 16- to 24-year-olds do not drink, while just over a fifth of the broader adult population don’t touch the hard stuff, according to an ONS study.

This increase in alcohol-shy shoppers spells good news for c-stores as 23% say they are likely to buy soft drinks from a local convenience store specifically for the Christmas period – a higher percentage than those who would buy mince pies, festive cards and last-minute gifts (HIM Research & Consulting, February 2017).

“We have to give the category a greater focus at Christmas because it is one of the most important for us,” asserts Kay Patel, owner of six Best-One stores in East London.

For Kay, it’s all about giving customers options. “We set out a space for mixers, but we also do multipacks of Ribena, Coke, Pepsi and lemonade. We put the drinks on big stacks all around the store.”

Donna Morgan, who co-owns Brownlies of Biggar, South Lanarkshire, believes retailers shouldn’t leave it too late to start putting Christmas lines out on shelves.

“You can’t afford to keep all your Christmas stuff until 1 December,” Donna says. “Most customers see the products out in store and start to buy them. They can save the soft drinks for Christmas anyway.”

Adrian Troy, marketing director for AG Barr, says retailers make more than half of their sales and profit in the three months before Christmas (Centre for Retail Research), so getting your offering right is essential at this time of year.

“Soft drinks are key to the profit opportunity, as consumers look to stock up on their favourite brands including Irn-Bru, Rubicon and the Barr range. Large-pack formats and multipacks are in particularly high demand as shoppers prepare for family gatherings and parties.”

Premium

Mark Sterratt, market, strategy & planning director for Lucozade Ribena Suntory, believes consumers will be looking to trade up at Christmas and retailers should be ready for their customers to buy more luxury varieties of soft drinks.

He adds: “Segments such as carbonates and mixers are popular over the Christmas period, and retailers should prepare for this increased demand accordingly. Premium fruit carbonates are essential in encouraging this trade-up and driving segmental growth in store.”

 

Donna believes the market for luxury soft drinks keeps getting bigger, especially over the festive season.

“We do loads of premium products,” she says, “because people are willing to spend more, especially at Christmas, and they sell really well.

“This means we have to offer more fruit flavours and brands beyond your normal Schweppes tonic water. People are especially looking for quality so we push our local Scottish products as well.

“People want to celebrate at Christmas so alcohol is still popular, but we do non-alcoholic wine and prosecco so people who don’t drink don’t feel like they’re missing out. It means they can still have a good time at parties and other people might not even know they’re not drinking.”

Donna’s alcohol-free wines comes from Torres. Made using real grapes, the wine is fermented and then has the alcohol removed, preserving both the aroma and flavour of the drink.

Donna also believes that shoppers’ disregard for calories and sugar content at Christmas extends to the soft drinks category, too. “I think although there are low-sugar options available, people will just buy what they want at Christmas. People are comfortable buying brands that they wouldn’t normally buy the rest of the year.”

Billy Kinda, owner of Today’s Extra in Northampton, makes sure he offers festive favourites, but he also stocks a variety of flavours such lemonade from R Whites in raspberry or pear & elderflower flavours, adding a twist to the drinks consumers are familiar with.

He adds: “Robinsons also does lots of festive activity and people will look at what we have on promotion and on our leaflet, and are willing to go for something new.”

He says the growth in the food-to-go market has had an effect on shoppers’ willingness to trade up on soft drinks. “The take-away market is really increasing because customers have family and friends coming over and want to enjoy themselves without cooking. I think that is why people are willing to spend more money on drinks and buy different varieties.”

Paul Siviter, sales and marketing director at Hancocks cash and carry, points out that a big priority for shoppers is keeping their children happy at Christmas, and a good soft drinks range will help them do this.

He says: “Soft drinks must not be overlooked when it comes to Christmas because not everyone enjoys a sherry or a mulled wine, especially those who arguably enjoy festivities the most – children!”

Siviter believes that the soft drinks market has evolved, with shoppers increasingly looking for greater choice at the fixture. He says c-store owners can benefit from making the most of traditional best-sellers and staying up to date with innovative new products.

He adds: “From Ben Shaw’s Bitter Shandy and traditional Cloudy Lemonade and naturally-popular soft beverages such as Coke and Diet Coke that will undoubtedly be top sellers, to flavoured Aqua Splash water and Simply Fruity juice drinks that will be a hoot with the children, Hancocks stocks something for everyone.”

Paresh Vyas, owner of JND Stores in Manchester, recruits some premium names in soft drinks to pull in the punters. “Highland Spring sparkling water does really well for us,” he says. “It’s really good for those who don’t drink, but want something more than just water.

“Last year we did some bottles of white grape Shloer as an alcohol alternative that looks like wine. This year we are going to push the red grape flavour instead and see how that sells.”

Paresh doesn’t want to compete directly with discounters or the supermarkets so doesn’t stock brands such as Coca-Cola or Pepsi over Christmas. However, he does find that own-label drinks sell very well on promotion.

“We get the Euro Shopper lemonade and cola in and do a special price of three for £1. The customers love it and often ask me when the promotions will start.”

Mixers

Sales of mixers increased by 20% in value in the build-up to Christmas last year (Nielsen, four weeks w/e 31 December 2016).

Amy Burgess, trade communications manager at Coca-Cola European Partners (CCEP), points out that while cola is the biggest seller within the soft drinks sector (weekly Nielsen data MAT w/e 1 July 2017), she knows that it’s ‘special’ drinks such as cocktails and mocktails that “capture the excitement of the holiday”.

“The sector’s continued growth means it’s likely to be a big-seller again this year, so retailers should consider the importance of mixers alongside alcohol ranges, as people stock up for their festive celebrations,” she says.

“Cocktails are always a big hit with consumers during the party season,” she says. “Schweppes remains the number one tonic brand (weekly Nielsen Data MAT w/e 1 July 2017), with a wide choice of options to help bring some sparkle to cocktails and mocktails.”

Kay says he sells lots of different types of mixers in his store so that customers can choose what they want to add to their alcoholic drinks.

“We have to have different flavours such as Phillips Old English white peppermint cordial and fruit juices. Now you have so much choice with drinks that the festive range has to be extra special.”

Kay stocks only smaller bottles of cordial, because he just can’t source the bigger versions. However, this hasn’t put his customers off.

“Initially, I was a bit reticent about selling the smaller 70-80cl bottles, but customers are happy to pay more for them, Kay adds. “They pay the same for my bottles as they would in local bars and restaurants anyway. The whole bar culture thing has really helped to increase sales.”

He adds that Schweppes 1ltr bottles are also really popular and customers like to have the tonic water with spirits, or as a standalone.

Carol Saunders, head of customer marketing at Highland Spring Group, believes sparkling water is a perfect mixer for 
cocktails and mocktails, and the brand has been working to spread this message.

“As the only mixer with no calories, no sugar, no preservatives and no additives, naturally-sourced sparkling water is a perfect alternative to sugary mixers for health-conscious consumers.

“We’ve been focusing on broadening sparkling water consumption by creating new serving suggestions showcasing how sparkling water can be used as a mixer in mocktails.”

 

Water

For the first time, volume sales of plain bottled water have overtaken cola (IRI Total Market Volume Sales, 52 w/e 22 July 2017).

Saunders at Highland Spring Group reminds retailers that more eating-around-the-table occasions mean potential for plenty more bottled water sales.

She says: “Over the Christmas period, plain sparkling water does particularly well and accounts for a large share of water volume over this time. Sales move more into larger bottles over Christmas and new year (IRI, Convenience 52 w/e 19 August 2017).”

Bottled water for the table is the kind of thing people might like to buy well in advance of the big day, as Billy says people don’t want to leave it too late to buy heavy bottles of soft drinks. He says. “This means the 2ltr formats are especially popular with our customers.”

Stocking up

Paresh believes shoppers are buying soft drinks as cupboard fillers for the festive season, way in advance of the big day.

“We do a lot of tonic water and start getting our big offers out in mid-November, to make the most of people buying for parties,” he reveals.

Billy says that a willingness to spend more also means shoppers are buying larger formats. He says the eight- and 12-packs of Coca-Cola and Pepsi tend to sell really well because people are willing to spend more during the festive season and want drinks that are versatile.

“We’ve noticed in the past few years that people are looking for bigger formats and value multipacks.”

Donna makes sure she has plenty of big packs of soft drinks in stock at her store.

“For kids at Christmas, we do more multipacks in Fruit Shoots and juices. Bigger formats are always popular because people have family and friends coming over.

“I think you have to have a mix with soft drinks and people are looking out for deals at the moment. People want better-value packs, rather than just buying the single bottles. We have already seen customers starting to buy Christmas drinks and tend to come in and buy something every week.”

With shoppers likely to be in a hurry during the Christmas season, Sterratt believes independents should be ready for shoppers picking up last-minute refreshments, along with being sure to keep on top of day-to-day demand for soft drinks.

“The soft drinks category is just as important at this time of year as it is when the weather is warmer,” he points out. “Shoppers will be looking for on-the-go single-serve formats of their favourite brands as well as stocking up on larger serves to consume throughout the season. It’s essential that retailers keep chillers fully stocked and tidy, even during busy times, or frustrated shoppers will go elsewhere.”

 

Merchandising

Amy Burgess at CCEP believes retailers need to plan early in order to get the right soft drinks into their store for the season.

“Dedicated Christmas displays are a great way to drive sales and spread some festive cheer in the run-up to the Christmas period,” she asserts. From the end of October onwards, retailers should consider displaying future consumption soft drinks such as 1.75ltr and multipack formats close to the entrance of the store to encourage impulse buys as people begin to stock up for their celebrations.”

Burgess adds: “Creating eye-catching Christmas displays that showcase festive favourites can really add some in-store theatre that will build excitement in the lead-up to the big day. At this time, soft drinks could be displayed alongside other products that are popular at Christmas, such as sharing snacks. Retailers could offer discounts that are applied when bought together to boost sales.”

Donna makes the most of the space in her store, offering as much drinks choice as she can.

“We have a wide range of soft drinks on display at Christmas and try to cram as much as we can into the store,” she says. “We have recently moved our soft drinks to their own area, next to alcohol, so people can go round the shop and pick up the drinks they want more easily.”

Billy goes large when it comes to Christmas soft drinks displays in his store. “We set up big fixtures and shelving to accommodate the added soft drinks stock,” he says. “Any popular or promotional items are presented on larger gondolas and shelf ends.”

Billy also chooses a selection of ambient soft drinks to present in his chilled aisle. This gives his customers even more options, with a mix of small and big formats on show.

He adds: “It is important to get the displays right. We want soft drinks to be bought to keep kids and friends happy, and for those who want to use the drinks with alcohol. The sales of soft drinks can be great, as long as the promotions and offering are right.”

Rich Fisher, category development manager at Red Bull UK, is advising retailers to follow simple merchandising principles in order to take advantage of soft drink sales growth over the Christmas season.

He says: “Red Bull advises retailers to stock the most efficient range to drive the greatest value. Category space should be aligned with market share to maximise sales.

“The first shopper decision within sports & energy is the type of product required: functional; refreshment; or sport.”

Fisher believes it is important that retailers merchandise their soft drinks fixture to meet consumer needs, for example refresh, stimulate and hydrate. This means using best-selling brands to signpost the category.

“About 50-60% of soft drinks space should be allocated to the top five brands,” Fisher recommends. “Ensure 60-70% of space is allocated to sports & energy brands, in line with the share of the category.”

He reports that merchandising signpost brands at eye level improves the appeal of fixtures by providing a clear starting point for the category.

He says 94% of consumers shop using silhouette and colour, and so can easily identify well-known brands.

Red Bull also advises retailers to use vertical blocking and stair-step size variants to help shoppers identify the right drinks format for their needs.

Enjoying soft drinks at Christmas is no longer a cardinal sin, neither is it reserved for kids, teetotallers or designated drivers. Retailers must recognise the trend towards adult soft drinks and premium varieties, to ensure their soft drinks range can go toe-to-toe with their alcohol offering.