The soft touch

Soft drinks consumption is on the increase and the category looks set to play a larger role in the on-trade. Ben McFarland investigates​ The pub trade may not welcome the reluctance of magistrates to extend licensing hours for the forthcoming World Cup, but their "bah humbug" attitude augurs well for soft drink companies. If, as expected, applications continue to be turned down, the vast majority of pubs will be unable to serve alcohol before 11am meaning football fans will have to make do with something softer while gawping and shouting at the big screen.This gives licensees an excellent opportunity to get their soft drink house in order and expand their offering beyond the dispense gun and traditional range of bottled mixers. According to the Britvic Soft Drinks Category Report 2002, more than 520million litres of soft drinks were sold in an on-trade market now worth a massive £1.8bn.Soft drinks consumption is increasing as society becomes more aware of the importance of water consumption to health and well being, the dehydrating properties of tea and coffee and the many issues associated with alcohol. However, while the overall soft drink market grew by four per cent, on-trade sales remained static in what was a particularly challenging year for the pub industry.Tenanted and leased pubs performed extremely well over the last 12 months, taking their volume share of the on-trade market to 25 per cent and value share to 27 per cent."Another year's value growth in the face of tough conditions, including the implications of foot-and-mouth disease, illustrates that soft drinks remain core to the on-trade channel and are highly profitable," said Britvic's category director Andrew Marsden."Leased and tenanted outlets are largely behind this success, possibly a reflection of increased investment by the leased pub group operator. They supported the industry with a phenomenal 10 per cent value and eight per cent volume growth - the best sub-channel performance in the entire soft drinks market."However, declining soft drink volumes in the managed pub and independent sector checked this growth. "The five per cent value losses experienced by independent pubs and wine bars indicate that they have been slow to respond to changing leisure time choices," said Britvic sales director Paul Moody. "However, the potential for soft drinks in pubs is considerable as new soft drinks occasions emerge, in particular family food opportunities and the increasing presence of women in pubs. Outlets that have focused on tailored ranging to target specific customer groups have already reaped the rewards," he said.One specific target group that is set to play an increasingly important role in the on-trade is adult drinkers. "Having grown-up on soft drinks as children, people are continuing to drink soft drinks in their adulthood and they are becoming an increasingly vital part of the soft drink market," added Andrew.Britvic has successfully tapped into this growing demand with the launch of J20, an adult-oriented still fruit juice introduced exclusively into pubs and bars.The brand was one of the major climbers in this year's Brands Report and has grown in value by a massive 80 per cent in the last year.This increased demand for premium packaged, still soft drinks and adult juice-based products is reflected in the proliferation of coffee bars and cafés offering exotic fruit juices, blends and fruit smoothies to an increasingly health conscious consumer.When faced with such an eclectic choice available just yards down the high street, pubs can ill afford to treat soft drinks as a mere accompaniment to alcohol. Andrew believes the sheer range of soft drinks will continue to grow as it meets a demand increasingly based on need, occasion and mood. He said: "The key to future success is in still drinks as adults become even more soft drinks consumers."The benefits of soft drinks over simple refreshment will see significant development over the next few years, and people will begin to transfer what they think about food in terms of health properties and ingredients into the soft drink market."The market is nowhere near maturity so the future for soft drinks is looking extremely bright."Water​Mineral water is up 16 per cent in the take-home sector with more than 60 per cent of households in the UK now buying it in bottled form on a regular basis. In the on-trade however, mineral water only grew by three per cent in value terms.Although bottled water consumption has more than doubled in the last five years, pubs have yet again showed the smallest growth in 2001 and according to the 2002 Well Well Well Bottled Water Report, only 12 per cent of the total UK bottled water volume was sold through the on-trade.One of the most striking variations between pubs and the take-home sector is that for the on-trade, sparkling water commands 76 per cent of the sales compared with 21 per cent in the take home sector.However, the balance is slowly being redressed with sparkling water declining by four per cent and still water showing a 22 per cent increase on last year.With all the growth within the pub arena coming from still water, the major water brands are encouraging publicans to stock a 50cl single serve bottle or a sportscap bottle in addition to the larger format traditionally served with food.On-trade sub category performance: volume​

On-trade sub category performance: value​

The on-trade channel​

Draught vs packaged​