Adult Soft Drinks - UK - January 2006

Premier Insight

Executive Summary

Market Drivers

Market Size and Trends

Market Segmentation

The Supply Structure

New Product Trends

Distribution

The Consumer

The Consumer – Detailed Demographics

The Consumer: Attitudes and Typologies

The Consumer: Attitudes and Typologies – Detailed Demographics

Future and Forecast

Adult Soft Drinks - UK - January 2006

Table of Contents

Introduction and Abbreviations

Definitions

Consumer research

ACORN

Abbreviations

Premier Insight

Designer soft drinks

Encourage amateur cocktail bartenders

Possibilities for new entrants

Executive Summary

Health concerns and NPD drive growth in the market

Growth outstrips soft drinks market

Flavoured water and premium drinks take largest shares

BSD takes the greatest share

NPD in packaging, flavours and function

Strongest growth in the on-trade

Young, mass-market appeal

Future promises continuing growth

Market Drivers

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The healthy proposition

Figure 1: Agreement with selected lifestyle statements, 2001-05

Figure 2: Penetration of soft drinks, 2002-04

NPD maintains consumer interest

An alternative to alcohol

Figure 3: Consumption of alcoholic drinks, 2000-04

The demise of the ‘lunchtime pint’

The importance of image

Seasonality and the weather

Figure 4: UK average summer temperature and sunshine hours, 2002-05

Coffee shop culture encourages home consumption

Figure 5: Number of coffee shops, by turnover, 2000-04

Rising disposable incomes mean consumers willing to pay more

Figure 6: PDI and consumer expenditure, at constant 2000 prices, 2000-09

Population trends and demographics

Figure 7: Trends and projections in UK population, by age group, 2000-09

Figure 8: Trends and projections in UK population, by socio-economic group, 2000-09

Market Size and Trends

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‘Healthy’ image driving healthy growth

Figure 9: UK retail sales of adult soft drinks, by volume and value, 2000-05

Growth outstripping soft drinks market

Figure 10: UK retail sales of adult soft drinks against total soft drinks, by volume and value, 2001-05

Market Segmentation

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Flavoured water takes highest share of volumes, but loses out in value

Figure 11: UK retail sales of adult soft drinks, by type, volume and value, 2003 and 2005

Growth in sales of flavoured water slows

Figure 12: UK retail sales of flavoured water, by volume and value, 2000-05

Sugar vs sweeteners

Fruit drinks offer a healthier alternative

Figure 13: UK retail sales of adult fruit drinks, volume and value, 2000-05

New product launches driving growth

Consumers seeking additional benefits

Exotic tastes ‘on the go’

Premium sector boosted by a willingness to pay more

Figure 14: UK retail sales of premium adult drinks, volume and value, 2000-05

Premium dilutables performing well

Health and convenience key to sector growth

Iced tea and coffee – an emerging segment

Figure 15: UK retail sales of RTD tea and coffee, volume and value, 2000-05

The Supply Structure

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Figure 16: Selected manufacturers/distributors and brands in the UK adult soft drinks market, 2005

Danone leads the market in volume terms

Figure 17: Estimated UK supplier shares of adult soft drinks, by volume, 2003 and 2005

BSD takes greatest value share

Figure 18: Estimated UK supplier shares of adult soft drinks, by value, 2003 and 2005

Companies and brands

AG Barr

Belvoir Fruit Farms

Bottlegreen Drinks

Britvic Soft Drinks

Amé

Aqua Libra

J2O

Other brands

Above-the-line investment across the board

Figure 19: Britvic, advertising expenditure on selected brands, 2000-05

Cadbury Schweppes

Coca-Cola Enterprises

Oasis

Appletiser

Other brands

Danone

Volvic Touch of Fruit

Shape

Del Monte Europe

The Feel Good Drinks Company

Fentimans

Gerber

Ocean Spray

Figure 20: Main media advertising expenditure in support of Ocean Spray, 2000-04

Welch’s

Kraft Foods

Matthew Clark Brands

Merrydown

Rubicon

The Silver Spring Mineral Water Company

Stock Vital

Tetley

Twinings

Unilever

Figure 21: Main media advertising expenditure in support of Lipton Iced Tea (£000), 2002-05

Own label

Others

New Product Trends

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Fruit-based drinks dominate

Blackcurrant and cranberry are leading flavours

RTD tea – an expanding category

Flavoured waters less prominent than juice drinks

Functionality and wellbeing are key features

Winter warmers

Convenience and packaging

New product briefs

Distribution

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All channels benefiting from strong demand

NPD encouraging growth in both impulse and take-home sectors

Figure 22: UK retail sales of adult soft drinks, by value and type of outlet, 2003 and 2005

On-trade looks to non-alcoholic revenue

The Consumer

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Purchasing of adult soft drinks

Figure 23: Adult soft drinks bought in the last six months, 2001-05

Consumption on the rise

Niche sectors grow in popularity

Consumption highest amongst middle socio-economic groups

A young consumer base

Figure 24: Consumption of adult soft drinks, by age, August 2005

The family factor

Opportunities to increase volumes

Targeting by media

Media usage reflects socio-economic profile

Consumers of adult soft drinks watch more television

Weight of consumption

Figure 25: Weight of consumption of flavoured water, herbal and premium soft drinks, 2001-05

Heavy usage on the rise

Light vs heavy usage – the demographic profile

Older consumers welcome alternatives to carbonates

ABC1s – the social drinkers

The influence of children

The Consumer – Detailed Demographics

Figure 26: Adult soft drinks bought in the last six months, by gender, age, socio-economic group and region, August 2005

Figure 27: Adult soft drinks bought in the last six months, by marital status, working status, presence of children, lifestage and Special Groups, August 2005

Figure 28: Adult soft drinks bought in the last six months, by media usage, household size, ACORN category, TV viewing and supermarkets, August 2005

Figure 29: Weight of consumption of flavoured water, herbal and premium soft drinks, by gender, age, socio-economic group, presence of children and marital status, 2005

Figure 30: Weight of consumption of flavoured water, herbal and premium soft drinks, by working status, household size, region, lifestage and Mintel’s Special Groups, 2005

The Consumer: Attitudes and Typologies

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Attitudes towards adult soft drinks

Figure 31: Attitudes towards adult soft drinks, 2003-05

Negative attitudes feature highly

A popular meal accompaniment

Strongest resistance among older consumers

The sceptical ABs

Young DEs buy into healthy image

Cross-tabulation – attitudes investigated further

Figure 32: Cross-tabulation of attitudes towards adult soft drinks by attitudes towards adult soft drinks, August 2005

Health and price concerns the main deterrents

Avoiding alcohol at dinner

Figure 33: Cross-tabulation of types of adult soft drinks by attitudes towards adult soft drinks, August 2005

Herbal drinks and iced tea – popular meal accompaniments

A question of taste

Correlation analysis

Figure 34: Cross-analysis of supermarket usage and consumption of adult soft drinks, August 2005

Fizzy fruit drinks ripe for growth

Figure 35: Correlation analysis of supermarket usage and consumption of adult soft drinks, August 2005

The Consumer: Attitudes and Typologies – Detailed Demographics

Figure 36: Attitudes towards adult soft drinks, by gender, age, socio-economic group and region, August 2005

Figure 37: Attitudes towards adult soft drinks, by marital status, working status, presence of children, lifestage and Special Groups, August 2005

Figure 38: Attitudes towards adult soft drinks, by media usage, household size, ACORN category, TV viewing and supermarkets, August 2005

Figure 39: Further attitudes towards adult soft drinks, by gender, age, socio-economic group and region, August 2005

Figure 40: Further attitudes towards adult soft drinks, by marital status, working status, presence of children, lifestage and Special Groups, August 2005

Figure 41: Further attitudes towards adult soft drinks, by media usage, household size, ACORN category, TV viewing and supermarkets, August 2005

Figure 42: Consumer target groups, by gender, age, socio-economic group, ACORN category and lifestage, August 2005

Figure 43: Consumer target groups, by detailed lifestage, region, presence of children, Mintel’s Special Groups and media usage, August 2005

Figure 44: Consumer target groups, by supermarket usage and TV viewing, august 2005

Future and Forecast

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Economic and demographic trends suggest continuing growth

On-trade sales set to take greater share

Health concerns will continue to drive the market

Big players to maintain dominance

Interest from other manufacturers to increase

Impressive growth to continue

Figure 45: Forecast of the UK adult soft drinks market, by segment, by value, 2005-10

Figure 46: Forecast of the UK adult soft drinks market, by segment, by volume, 2005-10