Overview

In 2009 the economy continued to cast a cloud over consumer confidence, as shoppers continued to search out value. With less money to spend, consumers compensat ed by changing their grocery buying habits and opting to stay in more.

OVERVIEW
Resilient performance in a challenging marketplace
In this tough climate, the soft drinks sector did well to weather the storm. As an affordable treat, soft drinks were well suited to the mood of the times; and with a wide range of sub-categories to choose from, the more cash-strapped consumers had no difficulty in finding alternative soft drink choices to suit their budgets. Overall sales in the UK totalled £8.5bn across all channels − 2% up on the £8.4bn in 2008.

At £6.2bn, take-home sales grew 2% in the challenging economic environment Shoppers switched their supermarket loyalties in the search for the best prices. They also bought fewer items more frequently. Sales of smoothies slipped again and the other big-ticket categories, pure juice and sports drinks, also saw a decline.

In responding positively to complex debates such as obesity, the UK industry is now widely acknowledged to be the leading the way through its efforts around nutrition labelling, reformulation and new product development
– all of which are making a real difference for consumers.
Julian Hunt, Director of Communications, Food and Drink Federation

Value was certainly top of mind with consumers, but enjoyment wasn’t far behind. While many consumers downsized from pure juice to juice drinks, others blazed a trail to the diet cola shelves. This new-found favour helped boost the cola sub-category’s lead position to take a 22% share of the market.

Other strong performers were glucose and stimulant drinks, squash, non-fruit and fruit carbonates, juice drinks and water plus. Plain water sales remained flat − suggesting that consumers are reluctant to buy what is readily available from the tap at home.

The licensed channel did rather better than the grocery retailers. Sales rose 3% to £2.4bn, turning around the 4% decline in 2008 to put soft drinks at number two behind beer in the channel's performance table. In a difficult year for the on-trade, which saw increased competition from supermarket meals and drinks deals, this performance was significant. Although volumes were down 1%, soft drinks continued to benefit from the growing emphasis on food, which tends to attract more families. The winners were the usual suspects of cola, lemonade, flavoured carbonates and squash, while energy drinks, juice drinks and water continued to decline in popularity.

Shoppers' cautious mood looks set to continue in 2010. The challenge for the soft drinks industry will be to continue meeting their needs for taste and enjoyment at an affordable price. But if the economic outlook continues to brighten, will consumers maintain their thrifty ways or return to the shopping habits of happier times?

2%

Total soft drinks
market value growth