Premium soft drinks and mixer trends: Fentimans
Low and no continue to grow
The low and no alcohol movement is gathering significant momentum. That in turn has contributed to a blurring of the boundaries between soft drink and mixer categories, says Fentimans.
Around a fifth (21%) of the UK’s adult population now say they don’t drink alcohol at all, according to stats from the Office for National Statistics, and moderation is especially apparent in the 18 to 24 year-old age group. Consumers are instead turning to no or low alcohol options: CGA research shows that one in three (32%) adults has tried a no or low alcohol beer, wine or spirit in the last six months.
The no and low alcohol category has increased by 48% in the last year, and is now a £60m-a-year category ($80.4m).
“Whether they are abstaining from alcohol either partly or completely, these consumers don’t want to compromise their out-of-home drinking experiences. For pubs, bars and restaurants, it is more important than ever to provide a compelling non-alcoholic range—and that, of course, includes premium soft drinks,” notes Fentimans.
“If a non-alcoholic offering isn’t appealing enough, consumers may opt for water or a standard soft drink, which represents a lost opportunity to trade up to more premium options.
“For operators, the perennial challenge is freeing up fridge space—finding the optimal range that satisfies a variety of customer needs. One obvious solution is to consider products that are versatile enough to serve as standalone drinks, mixed with a spirit or as an ingredient in a cocktail.
“Offering a different drink selection for earlier dayparts like breakfast and lunch, before adapting menus for evening occasions, can also help maximise the potential of both. Drinks that have always been in fridges, like juices, need to justify their place as new and more exciting entrants appear.”
Rum: the new gin
The big trends in spirits also inform the big trends in mixers. Gin is still strong: continuing to accelerate with on-trade volumes soaring 35.9% year-on-year — faster than other spirits. Growth is even higher in the flavoured gin category, as consumers become more adventurous and seek out new and differentiated flavour combinations, which has led to an increased range of premium and flavoured mixers.
Now rum is tipped to follow gin’s meteoric rise. Growth is currently being driven by standard golden and spiced brands, helping to lift the volume of rum sales by 3% year-on-year.
“Many of the new rum drinkers are millennials, who commonly consume it either with a mixer or as part of a cocktail. The versatility of rum positions it well for growth in the months ahead, and commands an entirely different mixer proposition to tonic waters that have become so familiar through the gin renaissance.
“This presents an opportunity for operators to review their mixer ranges and ensure they have a selection to meet the needs of darker spirits as well as gin and vodka.
"One of the many brands to identify rum as a growing market is Coca-Cola. With the launch of its new premium Signature mixer range, the company, which rarely markets itself as a mixer brand, is stepping into the premium mixer sector in competition with other leading brands.
“It has used credible industry experts, including a group of leading bartenders, to help with the creation and marketing of the range—a move that many other spirit and mixer brands are making because they see the value of getting insight and input from experts in the bar industry. The new Signature mixers are also a good example of the blurring of lines between mixers and standalone soft drinks.”
The health kick
By no means a new trend, the desire for healthy living will continue to shape beverage trends in 2021.
“This trend has been accelerated by both health concerns related to Covid-19 and the UK Government’s ‘sugar tax’, which has prompted many soft drinks suppliers to roll out new healthy options or rework recipes to reduce sugar,” notes the report.
For example, low-sugar cola drinks have seen sales jump 22.4% in the last twelve months, while full-sugar varieties have declined by 13.3%, according to CGA data.
“Consumers are savvy, and while they are increasingly seeking drinks with reduced sugar, they also look for no artificial ingredients—and above all want quality.
“We are also starting to see ‘added health benefits’ filter through into the premium adult drinks sector, with Kombucha and its antioxidants that support and nourish gut health the most well-known example. There has been an explosion in Kombucha brands over the last year, and they can now be found on soft drink menus in mainstream venues including Greene King and JD Wetherspoon. As consumers become more concerned with their physical and mental wellbeing, drinks that offer additional health benefits are likely to grow and become part of everyday life.
“But we must not forget that what matters most to consumers when choosing a soft drink is the same as ever: flavour. When asked about important attributes of a premium packaged soft drink, ‘great flavour’ is the top choice, with the number rising by five percentage points year-on-year. With the numbers of people abstaining from alcohol or moderating their intake increasing, there is a huge opportunity to capture new customers with drinks that provide great flavour experiences and act as a credible, healthier alternative to traditional sugary soft drinks.”
Crackdown on plastic
While COVID-19 has been the focus on attention in 2020, sustainability continues to be an important focus for both consumers and business leaders. In the soft drinks industry, the issue of plastic use is very much under the spotlight.
“The war on plastic bottles is intensifying, with debate focusing on the twin themes of recycling and the removal of plastic from the supply chain. More than half (54%) of consumers expect to see environmentally friendly packaging when they go out to eat or drink, and a quarter (25%) say they would pay a premium to receive it.”
The UK is due to introduce a plastic packaging tax in April 2022: applying to products with packaging that is made from less than 30% of recycled materials.
Another response is a Deposit Return Scheme (DRS): encouraging consumers to recycle drinks containers by either placing a monetary deposit upon purchase or receiving cash or other rewards upon recycling. Some UK-based companies have already trialled a DRS, including UK-based restaurant chain Leon. The Scottish government plans to introduce a DRS by July 2022, with the rest of the UK likely to follow in 2023. PET bottles, aluminium and steel cans as well as glass bottles are being considered for inclusion, though exact details are still to be worked through.
While brands support sustainability: the idea of DRS has faced both support and objections; and sustainability measures will create another thing for businesses to think about.
“Many brands and operators believe that these schemes may result in increased costs, at least in the short-term, which is a cause for concern in what has been the most challenging year in history for many businesses. For many small independents in particular, further regulations will add significant extra financial pressure.”