The current drinks industry within the UK brings roughly £81 billion of sales with forecasts reaching up to £96 billion in 2021. For a company to be successful within this growth, they must re-evaluate their strategic position as it is no longer enough to be the bestselling brand. Brands must also take an ethical conscious and be a responsible manufacturer that will consider a wide array of external influences.
With brand and own label revolutionising themselves to match the future consumer’s wants and desires, a thorough market overview must be undertaken to understand where the gap in the market lies.
Market Share of Drinks
Alcoholic drinks grew in volume and value sales in 2016, slowly recovering from the aftermath of the recession . Consumers now perceive them as affordable via supermarket price wars and duty freezes. However, value sales are more successful than volume sales with consumers paying a higher price per litre in the hospitality sector. This reflects the idea that consumers are drinking outside of the home less often and shifting towards the in home experience .
Bottled Water has evolved to be a global business where growth is constant with increasing accessibility to drinking water. As a result of this, bottled water is a staple product for the FMCG as it monitors effects of economic factors into consumer purchasing behaviours. According to Mintel, 2016, 46% of consumers will cut back on bottled water when money is tight.
Carbonated Soft Drinks
The soft drinks category is undeniably a large sector of the category, however in the last year it has taken a slow growth of only 0.8%. This is associated with the heightened media attention around sugar levels.
Despite this perception, a third of product launches carried Low/ Reduced/ No Sugar claim within brand and own label.
Cordials and dilutes has shown an area of concern in the last 12 months with sales declining by 9.3%.
This drop in sales highlights that consumers are increasing concerned about the level of sugar within the drinks sector.
Sports and Energy Drinks
Sports and Energy has faced its biggest dip in value sales since 2012 – 18%. However, the sub-category is expected to grow by 22% in sales in 2022. For the category to validate this expected growth, it must have an effective marketing and strong new product development to address any issues with sugar, caffeine and artificial ingredients.
Current Trends in The Drinks Industry
Premiumisation has taken a predominant focus within the latest NPD launches, for example M & S launching premium carbonated soft drinks in their Taste of Summer Range – Sparkling Mandarin and Grape and Sicilian Lemon drinks.
It is not only ingredients that are being used for premiumisation but also the packaging style. Attractive packaging is a significant issue for premium drinks as 12% of consumers will base their decision on the way a product is presented especially with a younger target audience who believe that high quality packaging should represent high quality ingredients. Companies need to use this perception to their advantage as seen with Diet Coke and their partnership with popular fashion designers such as Marc Jacobs and Jean Paul Gautier.
Lo and No Alcohol
The drinks sector is setting the standard to be a solely morally responsible industry. This is especially seen within the alcohol sub sector which is exploring heavily into the development of low alcoholic drinks. More than ever, consumers now feel the need to moderate consumption due to saving money, managing weight and the heightened focus from the media living a healthy life. This provides an opportunity for a company to enter a new market. 60% of consumers could potentially be swayed to try a lower alcohol or non-alcoholic variant of their choosing such as Gordon’s new launch of low gin and tonic drink.
A further 30% of consumers would be encouraged to explore into the category if the drinks tasted similar to the standard strength variants. This would set numerous challenges but if the market was strategic with their thinking, they would be able to push the soft drinks category dominant share out of the hospitality sector.
The UK consumer now has a desire to explore texture differentiation within the drinks category. Adding texture to soft drink interests 25% of consumers. Consumers now want sensual experiences that test their comfort zone.
This product will be mainly aimed at a younger generation as they are willing to be adventurous and the popularity of being into food and trying out the latest trends.
Soft drink texture variations are a common place in Asia as high abundance of bubble tea products. This style of cold tea beverage has captured an audience that now wants adventure with every experience.
The drinks manufacturing industry and drinks hospitality sector will pay close attention to one another. This is to understand the consumer’s desired experience and re- illustrate the involvement of innovative products .
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