Each c-store could rake in extra £812 from functional wellness drinks, Britvic report finds

The consumer focus in health and wellness presents each conveneince store with an £812 opportunity, a new report from Britvic has found.

Britvic’s latest Soft Drinks Review has identified this opportunity through the functional wellness drinks segment as almost half of people (47%) agree they will eat more foods to support their immune systems going forward.

One in five people have begun taking vitamins since the start of the first lockdown, with 66 per cent of consumers stating ‘added ingredients to make it healthier’ as important vs 60 per cent pre-Covid and 27 per cent want to reduce sugar.

Consequently, the report forecast a £27m opportunity this year for the convenience channel from the functional wellness drinks segment, equating to an additional £812 per store.

“After the challenges retailers have faced in the past year, we’re dedicated to support our customers as they navigate changing shopper needs, and that includes looking ahead and making them aware of growing soft drink trends,” commented Phil Sanders, out of home commercial director at Britvic.

“The functional wellness market is currently worth an impressive £240.1m, and what’s more, shoppers are willing to pay more than double the average price for premium soft drinks with added benefits than a soft drink or 34 per cent more than the average single serve, which is already priced at a premium. It’s vital that retailers are adapting their ranges accordingly to take advantage of this shift in consumer demand.”

While categories traditionally associated with food to go were heavily impacted as a result of the changing shopper behaviour during the pandemic, a focus on wellness as restrictions continue to ease is set to help retailers regain sales in this area of soft drinks, the report noted.

As millions switched to working from home, it has also created a change in dynamic for shopper missions, with planned top up shops becoming more important at the expense of on-the-go food and drink.

The top up mission accelerated its position as the number one reason to visit a convenience store and the share of planned top ups grew. Unsurprisingly, as the pandemic set in, out of home soft drinks declined as fewer shoppers (-23%) bought less often (-12%).

“Shopping habits shifted sharply from little and often, to less frequent, bigger baskets, with planned top up missions growing in importance from 18 per cent in 2019, to 24 per cent by October 2020 – indicating consistency of new shopper habits even after the initial period of lockdown. Good news for retailers who have adapted their stores and offerings to cater to the needs of local communities,” Sanders said.

While overall the category experienced value and volume declines in total convenience last year, take home, larger format soft drinks were one of the channel’s outstanding performers. Reaching a third of soft drinks sales and growing 19 per cent (+£117.9m), the performance cements 2020 as a year of two halves for the category.

The report has identified three key soft drink needs that emerged last year, with ‘energy boost’, ‘in-home refreshment and socialising’ and ‘a new stance of hydration’ heavily impacting category winners. The top five soft drink segments remained as cola, stimulants, fruit carbs, plain water and juice drinks – the former three added £80.3m growth alone – but stimulants was the star contributor by far.

“As they adjusted to the ‘new normal’, consumers sought ‘pick me ups’ and stimulants, the leading soft drinks category in convenience, were well placed to benefit. As the channel’s biggest success story, stimulants grew in both take home and on the go, bucking the single serve trend and adding £57.2m in value. Outgrowing all other soft drinks combined, the segment attracted shoppers to buy more volume per trip at a higher price26, performing especially well in symbols and forecourts,” Sanders said.

Carbonates and mixers also outperformed soft drinks overall, playing a key role in refreshment and socialising at home. Plain water and flavoured hydration – such as juice drinks, ice tea and water plus - had a more difficult 2020, traditionally strong in on the go formats and transient channels and locations like high street and travel, both hit hard by the pandemic.

The Soft Drinks Review identifies three steps to soft drinks success:

• Protect loyalty in take home - Take home soft drinks shoppers are hugely valuable to convenience versus an average shopper, spending £894 a year versus £446 on average, with spend growing by £58 in 2020. Retailers must work to retain long term loyalty, offering good value versus competitor channels on these formats
• Recover and reset food to go sales – with soft drinks as the leading category bought on food to go missions, it is well placed to support retailers recover and reset sales by having the right range to meet new consumer needs
• Hero functional wellness to drive more value per drink - provide a range of great tasting drinks for consumers to manage their health, whether that be sugar free, low calorie or natural options, or through functional wellness drinks with added benefits that offer a chance for retailers to drive up the cost per drink