Beat the crush with juices and smoothies

A poor summer and consumers watching what they were spending led to the juices and smoothies markets declining in 2008. All of the sub-categories within these markets saw downturns compared to the previous year, with some being hit harder than others.

Pure juice remains the number two sub-category in the soft drinks market despite a 1% decline in 2008. The sub-category is now worth £1.2bn (£149m in the impulse sector).

Juice drinks also suffered a 1% decline last year and if it wasn't for kids' drinks such as Robinson's Fruit Shoot and Capri Sun, up 5% and 11% respectively, the sub-category could have seen a greater drop. Ribena had a tough 2008 with sales of its 250ml cartons dropping 13%. The juice drinks market is worth £480m, £169m of this from the impulse channel (source: Britvic Soft Drinks Report).

And after two years of being the fastest growing sector, things got rough for smoothies, with total sales dropping by 20% to £172m. Top seller Innocent was badly bruised, suffering a 26% decline in sales in 2008.

According to Paul Moody, chief executive of Britvic, the move away from smoothies is due to consumers not wanting to pay top price for their fruit fix. "Consumers have taken the 'five a day' message on board - but not at any price," says Moody. "Some smoothie buyers have switched to less expensive drinks in an effort to maintain their 'five a day' at a lower cost."

Calypso Soft Drinks has also noted the consumer drift towards more cost-efficient beverages. "Expensive items such as smoothies are suffering significantly in the recession, as consumers look for value for money and move towards ambient juices," claims sales and marketing director Richard Cooke. While total pure fruit juices are down 2.2% on sales, Calypso's pure juices are up nearly 4%. And the company is confident that it will continue to prosper as consumer purse strings tighten. "I forecast continued stability across value-for-money brands, especially juices, which have now become an everyday drink for many people," states Cooke. "People will continue to downgrade from premium labels to value for money brands."

It's not just consumer spending that has been affected by the economic situation, but also the actual channels they choose to shop in. "The economic downturn has impacted upon the way consumers shop, as more planned visits are taking place with supermarkets being the chosen destination," claims Murray Harris, sales director at Britvic.

While that view isn't great for convenience store retailers, all is not lost, according to Harris.

"There is a big opportunity for retailers to take advantage of consumers favouring dining in over going out as they tighten belts. The decision to host a night in is often made spontaneously as a result of sunny weather."

To benefit from these spontaneous occasions, Harris recommends that retailers have chilled juices and smoothies ready for the warm weather. "According to our research, 53% of shoppers are willing to pay more for chilled soft drinks and 84% of 'drink now' soft drinks are purchased from the chiller," he adds.

And it's not just evening dining that is sustaining the juice and smoothies market - lunch is a key time of day when it comes to these sub-categories and retailers are advised to stock accordingly.

"Lunch or on-the-go thirst quenching are the chief occasions for consumption within the convenience channel," says Harris. "Retailers need to think about their customers when stocking their chillers. If the store is located in an area with lots of commuters going to and from work they should focus on stocking chilled adult brands such as J20 or Purdey's. If stores are in areas with lots of schools, retailers should stock a range of juices and juice drinks in smaller formats such as 250ml."

Tropicana managing director David Johnston says: "Over half of all chilled juice is consumed outside of breakfast time so it's important for retailers to be offering consumers a broad range of flavours in addition to orange and apple to cater for drinking occasions throughout the day.

"Smoothies also have great all day appeal - often bought when people need an energy boost but also by consumers with busy lifestyles who want a healthy but quick meal replacement or supplement."


Healthy living


Health is a key concern among consumers and juices and smoothies that carry a healthy on-pack message are more likely to be bought.

"Consumers are becoming more and more discerning about the nutritional content of their soft drinks, and artificial sweeteners are increasingly frowned upon," says Anita Doran, managing director of Hibiscus Drinks Company.

"Consumers are looking for natural, functional products that offer added health benefits and well-being as well as tasting refreshing and delicious."

Rubicon head of marketing Barbara Downs adds: "Function and health continue to be key drivers within soft drinks among health-conscious consumers.

"It's important for manufacturers now to communicate the natural health benefits of their products. Rubicon has always provided a healthy option for consumers so now we're shouting a little bit louder about our health benefits."

One brand that hasn't always been able to shout about its health benefits is Sunny D. During the mid-nineties, the brand received bad press about its artificial ingredients. Owner Sunny Delight Beverages Company decided the brand needed a healthy make-over and organised a parents advisory group to develop a new-look product.

Alison Gardner, a member of this advisory group and also a convenience store retailer, says that there was a very negative attitude towards the product from parents but it was still in demand from children. "It's well-known among children and it was felt that if the artificial ingredients could be taken away then parents would get on board with it too."

The product now contains no artificial flavours and preservatives, and, according to Alison, sales of the drink have grown since the changes.

"Sales of Sunny D have really started to pick up. It's now attractive to both kids and parents."

Another drink that has seen a sales increase due to its health credentials is Calypso's Aquajuice 67 (67% pure juice and 33% natural mineral water).

The brand's sales have grown by nearly 40% in the past six months. Marketing director Richard Cooke claims that its success is largely down to the government's push towards healthier living.

"Soft drinks regulations in schools - only allowing water, milk, pure juice or combinations of these - has driven a healthier sector, which continues to evolve with new nutritional guidelines now in place," he says.

"The 'lighter touch' drinks, such as Aquajuice 67, are seeing huge increases because they fit the bill. They are inexpensive and can provide a healthier and more affordable alternative to energy brands or other premium drinks."

The company states that health will continue to be a priority for juice drinks aimed at kids.

"Health remains an increasingly important issue, particularly for childrens' drinks, as education continues and nutritional awareness becomes mainstream," says Cooke.

And he is adamant that c-store retailers should constantly review their product lines to ensure that they are providing a healthy juice offering at a reasonable price.

"It's no good just educating kids and parents on healthier drinks in school," he says. "It's also imperative that retailers stock them outside schools and make them available at affordable prices."