Table of Contents
Executive Summary
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- The market
- On-premise grows faster than retail 2015
- Sugar tax poses a threat going forward
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- Figure 1: Forecast of UK sales of carbonated soft drinks, by value, 2011-21
- Cola continues to dominate market but mixers see strongest growth
- Sugar tax is key challenge for industry to negotiate
- Companies and brands
- CCE loses sales and share while PepsiCo gains from Pepsi Max growth
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- Figure 2: Leading brands’ shares in the UK retail carbonated soft drinks market, by value, 2015/16*
- Coca-Cola reformulates and L/N/R sugar claims increase
- Advertising spend approaches 2013 high
- Coca-Cola most likely to be seen as worth paying more for but Shloer is the most likely to be recommended
- The consumer
- Usage of non-diet CSDs remains higher, but diet CSDs more likely to be drunk daily
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- Figure 3: Usage of non-diet and diet carbonated soft drinks, April 2016
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- Figure 4: Usage of non-diet and diet carbonated soft drinks, by location, April 2016
- Further promotion needed to build special-occasion associations
- Opportunities for both established and new players to innovate, while fortified CSDs could help to retain users
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- Figure 5: Carbonated soft drink product enticements, April 2016
- Consumer demand for action on sugar places onus on companies but potential pitfalls ahead
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- Figure 6: Attitudes towards carbonated soft drinks, April 2016
- A price rise would prompt more than half of sugary CSD drinkers to cut back or stop, but switching creates opportunities to maintain sales
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- Figure 7: Consumers’ expected response to the sugar tax, April 2016
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- Figure 8: How those cutting back due to the sugar tax expect to change their behaviour, April 2016
- What we think
Issues and Insights
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- Consumer call for sugar reduction presents companies with a challenge and an opportunity
- The facts
- The implications
- Sparkling fruit juice with added vitamins could help to retain users
- The facts
- The implications
- New and seasonal flavours could maintain interest in the category
- The facts
- The implications
The Market – What You Need to Know
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- On-premise grows faster than retail in 2015
- Further decline estimated in 2016
- Sugar tax poses a threat going forward
- Cola continues to dominate market but mixers see strongest growth
- Sugar tax is key challenge for industry to negotiate
Market Size and Forecast
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- On-premise grows ahead of retail in 2015
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- Figure 9: Forecast of UK sales of carbonated soft drinks, by volume, 2011-21
- Figure 10: Forecast of UK sales of carbonated soft drinks, by value, 2011-21
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- Figure 11: Forecast of UK sales of carbonated soft drinks, by value and volume, 2011-21
- Sugar tax to hit sales
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- Figure 12: Forecast of UK retail sales of carbonated soft drinks, by volume, 2011-21
- Figure 13: Forecast of UK retail sales of carbonated soft drinks, by value, 2011-21
- Figure 14: Forecast of UK retail sales of carbonated soft drinks, by value and volume, 2011-21
- Improved disposable incomes should boost on-premise sales
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- Figure 15: Forecast of UK on-premise sales of carbonated soft drinks, by volume, 2011-21
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- Figure 16: Forecast of UK on-premise sales of carbonated soft drinks, by value, 2011-21
- Figure 17: Forecast of UK sales of carbonated soft drinks, by value and volume, 2011-21
- Forecast methodology
Market Segmentation
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- Growth for low-sugar options buoys up cola sales
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- Figure 18: Retail value and volume sales of carbonated soft drinks and adult and traditional soft drinks, by segment, 2013-15
- Lack of focus on low-sugar options inhibits lemonade
- Spirits’ rising popularity boosts mixers
Market Drivers
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- Sugar tax is key challenge for the carbonated soft drinks industry
- Local government urges parents to switch away from CSDs
- Ageing population could inhibit category growth
- Improved incomes should facilitate trading up
- Summer weather plays a crucial role
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- Figure 19: Sunshine hours in the UK, by month, 2011-16
Key Players – What You Need to Know
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- CCE loses sales and share while PepsiCo gains from Pepsi Max growth
- Coca-Cola reformulates and L/N/R sugar claims increase
- Advertising spend approaches 2013 high
- Coca-Cola most likely to be seen as worth paying more for but Shloer is the most likely to be recommended
Market Share
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- Mixed fortunes for Coca-Cola brands
- Coca-Cola and Diet Coke falter but Coca-Cola Life continues to grow
- Schweppes fails to benefit from growth in mixers
- Pepsi Max benefits from sole marketing focus
- Increased distribution helps San Pellegrino to grow
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- Figure 20: Leading brands’ sales and shares in the UK retail carbonated soft drinks and adult and traditional soft drinks market, by value and volume, 2014/15 and 2015/16
- Fever-Tree reaps benefits of growth in mixers as distribution increases
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- Figure 21: Leading manufacturers’ sales and shares in the UK retail carbonated soft drinks and adult and traditional soft drinks market, by value and volume, 2014/15 and 2015/16
Launch Activity and Innovation
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- Coca-Cola reformulates and relaunches
- New flavoured waters blur boundaries with CSDs
- Sparkling Ice enters the UK market
- AG Barr extends into flavoured water
- Companies continue to focus on calories, not sugar in promoting diet drinks
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- Figure 22: New product launches in the UK carbonated soft drinks market, by top 20 claims, 2011-15
- Premium claims are on the up
- Further growth in pressés
- Taking inspiration from alcoholic drinks
Advertising and Marketing Activity
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- Adspend approaches 2013 peak
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- Figure 23: Above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by top 10 advertisers (sorted by 2015), 2012-15
- Coca-Cola evokes emotions in unified campaign
- Diet Coke receives largest proportion of Coca-Cola’s spend
- Forging links with sports and active lifestyles
- PepsiCo focuses on Pepsi Max range
- Suntory targets discerning adults with Orangina relaunch
- AG Barr draws on its Scottish heritage
- Fever-Tree unveils first ever television advert
- Nielsen Media Research coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 24: Attitudes towards and usage of selected drinks brands, March 2016
- Key brand metrics
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- Figure 25: Key metrics for selected drinks brands, March 2016
- Brand attitudes: Coca-Cola and Shloer seen as most worth paying more for
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- Figure 26: Attitudes, by drinks brand, March 2016
- Brand personality: Coca-Cola is seen as the most fun
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- Figure 27: Brand personality – Macro image, March 2016
- Shloer seen as sophisticated and stylish
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- Figure 28: Brand personality – Micro image, March 2016
- Brand analysis
- Shloer is the most recommended brand
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- Figure 29: User profile of Shloer, March 2016
- Coca-Cola seen most widely as worth paying more for
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- Figure 30: User profile of Coca-Cola, March 2016
- Pepsi Max seen as fun and vibrant but less associated with health than Diet Coke
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- Figure 31: User profile of Pepsi Max, March 2016
- Diet Coke remains more popular with women than men
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- Figure 32: User profile of Diet Coke, March 2016
- 7UP seen as refreshing but also as standing still
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- Figure 33: User profile of 7UP, March 2016
- Orangina is seen as the most pure but has lost out from lower visibility
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- Figure 34: User profile of Orangina, March 2016
- Coca-Cola Life favoured by parents with young children
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- Figure 35: User profile of Coca-Cola Life, March 2016
- Irn-Bru remains more popular in Scotland than elsewhere in the UK
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- Figure 36: User profile of Irn-Bru, March 2016
The Consumer – What You Need to Know
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- Usage of non-diet CSDs remains higher, but diet CSDs more likely to be drunk daily
- Further promotion needed to build special-occasion associations
- Opportunities for both established and new players to innovate, while fortified CSDs could help to retain users
- Consumer demand for action on sugar places onus on companies but potential pitfalls ahead
- A price rise would prompt more than half of sugary CSD drinkers to cut back or stop, but switching creates opportunities to maintain sales
Usage of Carbonated Soft Drinks
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- Carbonated soft drinks usage undiminished by sugar concerns
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- Figure 37: Usage of non-diet and diet carbonated soft drinks, April 2016
- Youth bias in usage limits market growth potential
- Rising incomes could encourage trading up
- Diet CSDs more likely to be drunk daily
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- Figure 38: Usage frequency for non-diet and diet carbonated soft drinks, April 2016
- Range of potential uses boosts at-home drinking
- Scope for pubs and restaurants to expand their selection of diet CSDs
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- Figure 39: Usage of non-diet and diet carbonated soft drinks, by location, April 2016
Usage Occasions for Selected Types of Carbonated Soft Drinks
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- Majority do not see carbonated soft drinks as suitable for formal occasions
- Role of CSDs in enhancing an everyday meal could be promoted further
- Pressés still unfamiliar to many consumers
- Smaller formats could encourage on-the-go usage
- Treat aspect of pressés and sparkling juice can be mined further
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- Figure 40: Usage occasions for selected types of carbonated soft drinks and other sparkling drinks, April 2016
- Few acknowledge flavoured sparkling water as offering hydration
Product Enticements
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- Opportunity for established and new players to innovate with flavours
- Introductory offers and sample size packs could help to drive trial
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- Figure 41: Carbonated soft drink product enticements, April 2016
- Carbonated soft drinks with added benefits interest a third of users
- Expansion of seasonal flavours could encourage all-year-round usage
Attitudes towards Carbonated Soft Drinks
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- Consumer demand for action on sugar places onus on companies but multiple issues to negotiate
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- Figure 42: Attitudes towards carbonated soft drinks, April 2016
- Brands and retailers take different approaches to reducing sugar
- Plant-derived sweeteners not the ‘magic bullet’ solution
- Potential for other sugar alternatives
- Meal deals and strategic positioning could harness associations of glass bottles with special occasions
- Stronger emphasis on fruit content could help fruit juice-based CSDs to differentiate themselves
- More than half of drinkers are interested in CSDs with a charity donation
Consumers’ Expected Response to the Sugar Tax
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- More than half of users of sugary CSDs would stop or cut back
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- Figure 43: Consumers’ expected response to the sugar tax, April 2016
- Reports of unchanged behaviour more common among infrequent users
- Higher earners more likely to cut back
- Consumer switching provides opportunities for brands to diversify
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- Figure 44: How those cutting back due to the sugar tax expect to change their behaviour, April 2016
- Opportunities for both premium and own-label
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Total market
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- Figure 45: Forecast of UK sales of carbonated soft drinks, by value, best- and worst-case, 2011-21
- Figure 46: Forecast of UK sales of carbonated soft drinks, by volume, best- and worst-case, 2011-21
- Retail
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- Figure 47: Forecast of UK retail sales of carbonated soft drinks, by value, best- and worst-case, 2011-21
- Figure 48: Forecast of UK retail sales of carbonated soft drinks, by volume, best- and worst-case, 2011-21
- On-premise
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- Figure 49: Forecast of UK on-premise sales of carbonated soft drinks, by value, best- and worst-case, 2011-21
- Figure 50: Forecast of UK on-premise sales of carbonated soft drinks, by volume, best- and worst-case, 2011-21
- Forecast methodology
Appendix – Advertising and Marketing Activity
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- Figure 51: Above-the-line, online display and direct mail advertising in the UK carbonated soft drinks market, by parent company and brand (sorted by top five advertisers in 2015), 2012-15
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