Although there’s plenty of choice when it comes to soft drinks in the off-trade, when it comes to the on-trade are we stuck in a rut? Susan Young takes a look at the market.

Coke, Irn Bru, Red Bull and Schweppes splits – licensees were buying these brands for their customers a decade ago, and nothing much has changed. Ask just any licensee what their best selling soft drinks are, and these four still dominate. That doesn’t mean to say that you don’t have a carton of Cranberry behind the counter, but when it comes to anything out of the ordinary, consumers would be better served in their local sandwich shop.
Certainly when you talk to licensees the chances of them bringing up the subject of soft drinks voluntarily is just about nil, despite the fact that it accounts for a reasonable part of their turnover.  And soft drinks is still one of the few drinks categories that is growing.  In fact in the on-trade, according to the recent soft drinks report from Britvic the value of soft drinks increased 1% last year, despite the fact that volumes fell 3%. However you have to bear in the mind that generally speaking right across the board sales in pubs fell between 5% – 10%,  soft sales are holding up well.
The value of the on-trade market in the UK is £2.8bn, and if you take Scotland as roughly 10% of the total, it means that here the market is worth a substantial £280m.
In the on-trade, consumers are influenced because they are either drinking a soft drink as a mixer, or they are looking for an energy drink to give them a lift, or perhaps the drinker is a ‘designated’ driver. Although I have to say I have yet organised a night out with a designated driver. Do they exist?
There also appears to have been a move away from bottled soft drinks to drinks dispensed on the gun, as consumers try to be more economic with their spend in the pub. Paul Linthwaite, Britvic’s business unit director for on-trade, said that many cash-strapped consumers have traded down to carbonates, especially dispensed cola and lemonade. Draught soft drinks saw value growth of 3% last year, while packaged sales of comparable products fell 1%.”
Linthwaite also believes that customers are bored with the range available in pubs. He says, “If you’re not drinking alcohol, the choice of a carbonate, fruit juice or juice drink, or water, is actually quite boring.” I would agree with him. When you are not drinking alcohol in a pub, you actually get fed up with the range of soft drinks on offer, not only that bartenders never try to get you to trade up, or make a soft drink recommendation. The only occasion that has happened to me in the last year was at Buzzworks when boss Colin Blair introduced me to their mock Mojito – a non-alcoholic drink that was absolutely delicious. They make an effort no doubt because Elliots very often has customers that have cars, and what better way to maximise  sales than to have cocktails that that non-alcoholic, to cater for them. They do require a bit more work, but the GP is far greater too.
One range of drinks, particularly in Scotland, which is also relatively steady and still growing is energy. And Red Bull is way out in the lead. Coca Cola Enterprise may have taken Monster on last year, but the monster in Scotland is the Bull. That doesn’t mean to say it doesn’t have competition. You will find a plethora of energy drinks around, but in 80% of pubs it’s Red Bull that dominates.
Says Jim Rowan of Dunns Food and Drinks, “Red Bull now sells at a good price, and they give licensees great support through promotions. That’s why they are maintaining their market share.”
And it’s not as if they don’t have competition. In the last few years there have been around 100 energy drink launches – one of the most recent being Kick Ultra, from Global Brands, which is very much trying to persuade consumers to drink Kick Ultra in cocktails and long mixed drinks.  There’s also ‘Playboy Energy – promoted by Kelly Brook, there’s no doubt this drink is aimed at men… while Rockstar are bringing out Rockstar Pink a 10 calorie energy drink aimed at women.
One brand that promotes itself heavily, and successfully in Scotland, is our other national drink…Irn Bru. They have invested some £15m in the brand recently, and are now growing sales outside of Scotland. This year’s marketing includes a new ad which celebrates summertime. The 60-second seaside ad, includes a soundtrack from Scottish singing sensation Paolo Nutini and his hit ‘Pencil Full of Lead.’  At its launch, Adrian Troy, Head of Marketing for AG Barr said, “This commercial is another Irn-Bru classic and starts a summer-long campaign which will reinforce Irn-Bru’s position as a favourite choice for consumers. We feel this campaign has really captured the spirit of summer.”
Another soft drink which has been popular in Scotland in the past, and now seems to be making a comeback is ginger beer.
Claudia Flynn, Manager of Behind the Wall in Falkirk says, “Ginger beer and lime has become such a big seller lately that it now has its own button on the till.”
However she has also seen a lift in pineapple juice sales, she comments, “We had to get in cartons of pineapple juice because the baby bottles weren’t enough to meet demand.  Our most popular-selling soft drinks are without doubt fresh orange and lemonade and diet coke, followed by soda and lime. Bottled water isn’t selling so well – although we now put a bottle of tap water on every table in the restaurant, so this may have made a difference to the sales.”
While Clem Barrere, Assistant Manager at The Voodoo Rooms in Edinburgh comments, “In the last six months, ginger beer and grapefruit juice have become very popular soft drinks. But the biggest swing we have seen has been away from diet drinks and water towards full fat cola, and orange juice and lemonade.”
Brendan O’Neil of Morrisons Cold Beer Co in Stirling says, “Ginger beer is going great guns, but mainly as a mixer.” He adds, “I’ve also noticed that people tend to order a lot more tap water than bottled.”
The move to drinking tap water, has led to bottled water sales seeing a significant decline. That could be because YouGov research reveals that 71% of consumers believe that tap water is just as good as bottled.
There is a lot of opportunity out there for licensees when it comes to soft drinks. More so that you might realise, and in this economic climate a category that is showing growth in value is certainly worth paying more attention to. Perhaps licensees should be looking closer at what restaurateurs are doing to promote soft drinks this area of the licensed trade has seen a sales increase 26%.

Category: Features, News