‘Soft drinks sales won’t return to pre-pandemic levels until 2023’

07-May-2021 - Last updated on 07-May-2021 at 10:39 GMT

Customer demand: since the trade reopening for outside service last month (April), soft drinks have been the third biggest category in sales

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Sales of non-alcoholic drinks aren’t predicted to hit 2019 levels for another two years, one soft drinks producer has revealed.

The owner of brands including Robinson’s, Pepsi Max and 7Up, Britvic unveiled its latest statistics on how the soft drinks category has performed over the past year.

The Soft Drinks Review Licensed 2021 revealed sales were flat during January and February 2020 before falling sharply in March, when the first cases of Covid-19 hit the UK and the World Health Organisation (WHO) declaring a pandemic, before pubs were forced to close for the first time.

This resulted in first quarter sales for soft drinks falling by 7.1% in value and 7.5% in volume.

During the summer months (July to October), soft drinks sales contracted by almost half (45.3%) against the same period the previous year in value and volume.

However, upon reopening in July, after the first lockdown, the VAT cuts for non-alcoholic drinks and the inclusion in the Eat Out to Help Out scheme in August, meant a boost for the category.

Results for the soft drinks sector for the year ending 31 December 2020, compared to the previous year, showed volume sales fell by 60.5% and volume by 60.6%.

Speaking to The Morning Advertiser following the launch of the report, Britvic senior channel development managed for foodservice and licensed Katy Watts further outlined the impact of reopenings has had.

Third biggest category purchased

Watts said: “If I take us back to the first reopening in July last year. We saw a massive spike in soft drink sales during that period, a lot of that was due to the Eat Out to Help Out scheme included soft drinks within the promotion.

“That really did help to boost sales, soft drinks sales saw the biggest spike, out of all of the other drinks categories.

“Soft drinks over index when they are food occasions and when they are families present. During that time was the summer holidays, so that helped to boost it.

“The data we have had through for the recent reopenings (12 April), soft drinks has been the third biggest category purchased and we have seen more beer purchases.

“A lot of that goes down to experience and drinks you can't necessarily replicate at home. There's been a huge demand for the British pint and rightly so. That's what people have been looking for.”

Watts went on to highlight how the weather not only impacts footfall in the pubs with outdoor trading only permitted at present, but also how it affects soft drink demand.

She added: “We also know in the initial reopenings previously, people have tended to go to their local community pubs because they have been nervous about travelling further afield.

“We have seen that happening again this time, which means the local pint, the occasion and the mission people are on is 'let's just go, have a quick pint and then go home'.

“We do anticipate the beer category will continue to grow over the next couple of weeks and as that starts to plateau and people feel more comfortable going out with family and friends again, we expect soft drinks to start peaking.

“The other great thing, when the weather improves, that naturally has a knock on impact on all drinks categories, but soft drinks perform especially well when the weather is nice.

“We are expecting growth to come back through for soft drinks.”

Overall trajectory

Looking to the future, while soft drinks sales aren’t expected to return to growth for another two years, the loosening of restrictions will benefit the category, alongside other drinks sectors.

Watts said: “The overall trajectory for the market is we won't stabilise until probably 2023 so sales will naturally be down against 2019 and it will take a while to stabilise but we do know soft drinks perform well during the [good] weather, summer holidays and with food,” Watts said.

“When people can eat inside again [from Monday 17 May], that will have a positive impact on all categories.

“As much as we have seen a big proportion of consumers going out to trade, it does hinder you when you're stuck with the British weather, stuck in the cold, wind and rain.

“Whereas when people can eat and drink inside again, it encourages more consumers, more footfall, which will then have a natural impact on the category sales.

“We believe the category will return to growth as the market returns to growth. We are hopeful over the summer months, we will see soft drinks return to growth again but it won't be until 2023 we stabilise against pre-Covid.”

While fellow drinks producers such as brewers have been hit with reported supply issues, Watts stated this wasn’t something that was concerning Britvic for its own supply.

She added: “We produce everything ourselves in our own factories, with a brilliant supply chain team who manage everything from a supply and demand perspective.

“We have helped the trade out when reopening, previously we had a programme called Reopen Right, which gave advice to operators on setting equipment up and getting the drinks coming through. I don't anticipate any supply issues.”