|Title:||United Kingdom carbonated soft drink take-home sales by category in pounds sterling, volume in liters, and percent change for year ending January 22, 2012|
Start of full article - but without data
TAKE HOME SHARE
Carbonated drinks: XX w/e XX January 2012
VALUE OLUME [pounds sterling] m y-o-y % litres (m) y-o-y %
Colas XXX XX.X X,XXX X.X Flavours XXX X.X XXX -X.X Lemonades XXX X.X XXX X.X Mixers XX X.X XXX X.X TOTAL X,XXX X.X X,XXX X.X
Growth of XX% is normally the preserve of young upstart categories, not a mature market like cola. But cola brands--led by Pepsi and Coca-Cola, with more than XXX years of history between them--have achieved just that.
Admittedly, some of that growth is down to price increases, forced upon the big players by cost inflation: sugar prices have risen XX% since the end of 2010. But stripping out price still leaves some impressive growth.
Cola volume sales surged by X.X% over the past year [Kantar Worldpanel], accelerating the progress made in 2010, when volumes rose by X.X%. Flavoured carbonates, on the other hand, have had rougher ride, experiencing a X.X% drop in volume over the same period, with mixers and lemonades pitched somewhere in the middle (see table, pXX).
So what explains the success of cola and comparatively weak performance of fruity e carbonates? And can cola keep its fizz in the coming year?
The weak economy has, in truth, benefited all carbonated drinks. To some extent this is due to consumers going out less and instead looking for affordable treats to enjoy at home. But the growth has also come at the expense s of pricier products, typically still drinks.
This is reflected in the data on squashes e and cordials (see pXX). But it isn't limited to the off-trade. Britvic reports that total sales e of its carbonates (in both on-trade and off-trade) grew by X.X% last year, while sales of s its still drinks, including its JXX and Robinson e brands, fell by X.X% [XX w/e XX October 2011].
Cola brands, especially, have been able to e capitalise on the downturn by entrenching consumer loyalties with the help of deeper and more frequent promotions. Flavoured carbonates, meanwhile, suffered in comparison with a strong 2010, when heavy promotions, especially in Tesco, grew volumes by X.X% - outpacing colas.
In 2011 the tables turned as a promotional and marketing bias influenced consumers to choose cola over flavours. "Investment from major brands in cola was disproportionate to flavoured carbonates," says Ian Forshew, grocery commercial director at Britvic, PepsiCo's UK bottler.
The depth of featured space promotions on Coca-Cola and Pepsi rose substantially: the average saving on Coca-Cola products grew two percentage points to XX.X%, while savings on Pepsi rose from XX% to XX%. Nor did the brands cut back on frequency of promotions. Pepsi's remained almost unchanged - and Coca-Cola ran XXX more deals to total X,XXX [Assosia XX m/e February 2012].
Major events and launches also gave cola a boost. Category leader Coca-Cola, in particular, had a big year. It celebrated its XXXth birth-day with a retro campaign and the launch, last April, of limited-edition vintage-style multipacks. For the occasion, Coca-Cola boosted its already sizable marketing budget by XX% to [pounds sterling] XX.Xm [Ebiquity]--an investment that paid off, as volume sales grew by X.X% and values by X.X% [SymphonyIRI].
But if any brand stole the show, it was Pepsi. Volume sales for the regular version rose by X.X% despite its policy of zero advertising support. Its sugar-free sister brand Pepsi Max had an even better year, with volumes leaping XX.X% [SymphonyIRI]--helped along by a X.X% increase in advertising spend, to [pounds sterling] X.Xm, for the diet versions of Pepsi [Ebiquity].
Pepsi Max also benefited from a multimillion-pound campaign from PepsiCo and Britvic cross-promoting the brand with Doritos crisps. During the promotion, which ran for eight weeks from i October, sales of Pepsi Max shot up by over Xo% compared with the previous year [Nielsen X w/e XX October 2011]. It was a clever move--and one the company plans to repeat, with a second Doritos tie-up planned for summer, this time in the impulse channel across Pepsi, Pepsi Max and Diet Pepsi (The Grocer, XX April 2012). There is also a cross-promotion with Walkers in the pipeline for later this year--and, following a collaboration in out-of-home in recent years, CCE has also started working with Ocado to cross-sell Coca-Cola with pizzas.
Although two-thirds of featured space promotions in the category have been multibuy offers [Assosia], insiders believe shoppers are increasingly favouring deals that reduce overall spend, such as cross-promotions and 'save' mechanics. "Consumers are looking to buy what they really need rather than buying in bulk to stock their pantry," says Stewart.
The trend for consumers buying only what they need prompted Britvic to bring out smaller XXXml multipack cans last September for Pepsi Max, Diet Pepsi and Pepsi (see left). The cans have proved a hit, adding [pounds sterling]X.Xm to multipack sales in their first X weeks on shelf.
Not to be outdone, CCE also rolled out a smaller pack size for its cola brands in March this year (see left). The XXXmX bottle is the first on-the-go pack launch from Coca-Cola in almost XX years. "We're making sure we have the right pack for the right consumer on the right occasion," says Jason Hood, CCE's associate director of category management.
NPD of this kind will help keep cola sales fizzing, but for Coca-Cola the big ticket is its official sponsorship of the Olympics. The brand certainly has a lot lined up, including Olympic on-pack promotions, PoS and concerts in Cardiff, Glasgow, Leeds and London's Hyde Park - the latter headlined by Dizzee Rascal and marking the end of the Olympic torch's journey through the UK.
Coca-Cola hopes the Olympics will provide a similar boost to sales as other major sporting events. Sponsorship of the 2010 World Cup, for instance, helped Coke grow value sales by XX.X% year-on-year for its duration. Coca-Cola's rivals, meanwhile, haven't been thrown by its exclusive sponsorship arrangement. Far from it - in fact, there is optimism that the high level of investment in the summer's events will deter the industry from competing heavily on price. "I would be encouraged to think there will not necessarily be a price-based platform - one would hope there would be rational pricing," Britvic CEO Paul Moody told investors recently.
Good news for other colas, but where does CCE's investment leave flavoured carbonates? Aside from the Olympics, getting some of its core flavoured brands back on track will be a priority for the company. Price hikes helped value sales of Fanta, Dr Pepper and Sprite stay buoyant last year, but their volume sales fell, with Fanta and Dr Pepper down a worrying X% and XX%, respectively [SymphonylRl].
CCE is now fighting to get its non-cola carbonates emulating some of Coke's success, unveiling new packaging in December for the Dr Pepper range, including a white look for the Zero variant to help consumers differentiate it from the original. The refresh is being supported by an on-pack promotion, Win Pants or Prizes, which runs from April to June and offers the chance to win electronic prizes--or novelty Dr Pepper pants.
For Fanta, CCE is pinning its hopes on a new recipe for Fanta Orange and a major marketing push, begun in March. The activity comprises a TV ad, sampling, PR and a digital game encouraging consumers to 'chase the great taste of Fanta'--and a new limitededition mango & passion fruit flavour is also planned for the summer (see pXX).
Irn-Bru will also be hoping for a better innings after value sales fell X.X%, despite the launch of its first limited edition, Fiery Irn-Bru, in September [SymphonyIRI]. Last month, the company kicked off a [pounds sterling] X.Xm campaign in Scotland, due to run for three months. Vimto, meanwhile, will be after more of the same--it bucked the downward trend in flavoured carbonates to grow volume sales by X.X% in the past year.
One obstacle to flavoured carbonates, and indeed colas, achieving meaningful growth this year will be the higher prices forced through the supply chain by rising costs, particularly sugar. Of the category's X.X% value growth last year, cost inflation accounted for almost two thirds. It's expected to weigh heavily over the next few years, too. Although Mintel expects carbonated value sales to increase by XX% in the next five years, it forecasts that at constant 2011 prices value sales would actually fall by X%.
It should be good news for cheaper own-label carbonates--but, despite consumers looking to save money, own label is not expected to win market share. Carbonated soft drinks remains a brand-dominated category--XX% of value sales are driven by brands, and own-label volume growth, at X.X%, lagged behind branded growth last year [Kantar Worldpanel]. The only exceptions were ownlabel mixers and lemonades, already more commoditised, which grew volumes X.X% and X.X%, respectively, as their branded equivalents declined.
As own label steals back share in many food & drink categories (The Grocer, XX April), this should offer some comfort to carbonated drinks brands. But with commodity price inflation forcing up prices and eating away at margins, brands and own labels alike will have their work cut out to protect volumes in the foreseeable future--even if the Olympics, Jubilee and Euro 2012 help keep colas and flavours in favour for the summer.
TOP XX BESTSELLERS
Carbonates: XX w/e XX February 2012
SALES CHANGE [pounds sterling]m y-o-y %
Coca-Cola XXX.X X.X Diet Coke XXX.X X.X Own label XXX.X X.X Pepsi Max XXX.X XX.X Pepsi XXX.X XX.X Fanta XXX.X X.X Schweppes XXX.X X.X Irn-Bru XX.X -X.X Dr Pepper XX.X X.X Sprite XX.X X.X
* The carbonated soft drinks market has grown by X.X% to [pounds sterling] X.Xbn, ahead of total soft drinks for the second year. This was primarily driven by price rises as shoppers paid an average of Xp more per litre.
* But price increases were not entirely responsible - volume sales rose by X.X% as the category recorded an increase in its buyer base, with shoppers switching from juices and squash.
* Brands dominate the carbonated soft drinks market, making up XX% of value and XX% of volume.
* Cola is the largest sector, making up Xo% of the category's overall value. It has had a particularly strong 2011, with growth ahead of the market in both value and volume terms.
* Flavoured carbonates have seen a fall in volume as shoppers put less, on average, in their baskets.
TAKE HOME SHARE
Carbonated drinks: XX w/e XX January 2012