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Catman: pulling power

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New Nielsen figures for the category’s performance in the 12 months to 4 August 2018 show the levy has not stalled the progress of many of the big brands – despite the fears of retailers who were concerned the legislation would hit their business by pushing up retail prices.

It is the first set of annual sales statistics since the levy was introduced in April and suggests the category has proved resilient in the face of legislative change. It shows soft drinks sales across all retail sectors were up 4.9% in the period, but there are two important factors – the recent heatwave and the FIFA World Cup – that may also have been factors in the buoyant performance. Both provided a welcome boost for sales and may have helped counteract any downturn resulting from the levy.

Healthier alternatives
Soft drinks is a major contributor to the business of convenience outlets, which is why so many retailers were concerned about the impact of the government’s new tax. Many companies changed the formulation of their brands to lower the sugar content and ensure products were not subject to the new charge, so prices remained the same.

Suppliers have been aware for some time that consumer attitudes are changing and they are becoming more aware of the sugar content of products and shifting to healthier alternatives in some cases. This has come about amid growing concerns about obesity levels, which have prompted the government to consider new ways of clamping down on sugar intake. Growing dietary awareness and health concerns sparked an influx of low- and no-sugar brands in recent years. The arrival of the sugar tax merely speeded up the process, because it provided a financial incentive for suppliers to adjust the formulation of their brands.

Leading contenders
There were many strong performances among the leading contenders in the top 25 table. Coca-Cola retained its long-established category leadership with a 7.6% value increase and sales across all retail sectors of more than £1.2bn.

Coca-Cola European Partners (CCEP) unveiled an advertising campaign for its Diet Coke brand, including a new design, flavours and a TV ad in February 2018. The company updated the packaging with a design featuring a larger logo while two flavours – Exotic Mango and Feisty Cherry – were also added following consumer testing that saw 30 styles sampled by more than 10,000 people. A TV commercial entitled “Because I Can” was aired at the same time, supported by poster and digital advertising.

Brand research
A few months later, CCEP launched an on-pack promotion ahead of the 2018 FIFA World Cup, following brand research that found “more than half” of the population were planning to watch the games. The promotion offered consumers the chance to access in-game content within the FIFA 18 game for Xbox One and PlayStation 4 consoles and was supported by a £2.5m marketing campaign.

Second-ranked Pepsi also had a good year, with sales up 10.5%, giving it retail revenue of more than £500m during the 12-month period. Soft drinks supplier Britvic said its Pepsi Max had achieved a record market share in 2017 and claimed its “maximum taste, zero sugar” positioning had helped the brand lead the sugar-free category for several years. The company said Pepsi Max was now the biggest low- or no-sugar cola across the convenience and impulse sector at a time when consumers were becoming more health-conscious.

Love island
Third-placed Lucozade lost ground during the year, but is still worth £391m to retailers every year. Lucozade Zero launched a recent partnership with ITV2’s Love Island – one of the big hits of the summer of 2018. The link-up went live in June and included a new TV ad for Lucozade Zero, social and digital media support and in-store activation for retailers. Sarah Smart, brand manager at Lucozade Ribena Suntory, said: “Lucozade Zero is worth £500 a year to the average convenience store.”

Fourth-placed Red Bull enjoyed sales success with a 9% value increase during the year, when it generated retail business of £314m. Red Bull expanded its sugar-free range in April 2018 in order to “become more relevant with current health and category trends”. The brand offered a 355ml price-marked Red Bull Sugar Free can, as well as sugar-free versions of its 250ml Tropical and Orange flavours in both plain and price-marked packs.

Vitamin boost
Innocent moved one place up the rankings to fifth, thanks to a 7.3% value increase, earning it sales of £256m during the 12-month period. In the summer of 2017, Innocent added a trio of Super Juice fruit and vegetable juices boosted with vitamins. The company said the drinks were “packed full of nutrients” and were a source of antioxidant vitamins C and E to help reduce tiredness and fatigue.

Elsewhere in the top 10, there were strong sales performances from brands including Monster and Fanta, which both enjoyed double-digit rises during the year. There were also some notable showings further down the rankings from the likes of Schweppes, which was up 14.1%, and Highland Spring, which rose by 20.4% during the year.

The best showing among the top 25 brands came from Fever-Tree, which increased business by 90.6% during the year to pass the £100m sales mark for the first time, which moved it eight places up the rankings.

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