Premium soft drinks: A sector fizzing with innovation
It’s now easy to find soft drinks that command higher prices and boast more natural ingredients than many alcoholic beverages, and it seems consumers are crying out for even more choice.
For years the premium soft drinks category has been in a process of change but it’s taken some time for producers to understand the needs of the UK consumer while navigating legislation changes around sugar content.
The sector now seems to have found its feet, with many existing players investing heavily and confidently in NPD, while the wave of innovation has helped inspire newcomers.
Soft drinks, of course, are now also up against alcohol-free offerings but the growing number of products in both categories gives an indication of how big an opportunity the “drinking a refreshing premium drink without alcohol” occasion is.
The category Kantar data classifies as adult soft drinks looks like it has not only found its feet but has learnt how to run. Value sales in 2018 grew by 11.4%, with volume sales up 9.6%.
One of the challenges was the introduction of the sugar tax last year, but now that many products have been reformulated and reintroduced to consumers – along with a wave of new lower-sugar brands – the results have largely been positive, particularly for those at the premium end.
Raissa de Haas, co-founder of Double Dutch Drinks, says the government’s soft drinks industry levy has “definitely set a wave for people to become more health conscious”.
She says: “CGA data shows this has had an immediate impact on soft drink sales, with low-calorie options increasing their share of the market from 31.1% to 36.4% in the year after the introduction of the tax.”
Many producers have reported an uplift following recipe reformulations.
Luscombe Drinks, for example, reformulated its Hot Ginger Beer last year, dropping the sugar content from 8.5g to 7.7g per 10cl, and sales increased by 3%. Similarly Cawston Press sweetened its drinks with fruit juice to replace the added sugar, dropping the sugar content to 5.7g per 10cl. Sales have grown by 11% since, the producer says, mostly as a result of the change.
The latest addition to the Cawston range is Sparkling Orange, made with squeezed oranges, bitter orange extracts, Seville orange purée, sparkling water and apple juice for sweetness. Managing director Steve Kearns says: “For many of us, the words ‘fizzy orange’ bring back happy childhood memories. But to our adult palates, most of them taste syrupy and cloying. By swapping out the added sugar and fake stuff and balancing sweet against bitter, we have given fizzy orange a much-needed makeover.”
There has been plenty of activity in the soft drinks sector this year.
Shloer has launched Shloer Spritzed – a range of light, dry, aperitifs – and the Shloer Pressed range of canned drinks to “meet growing demand for more soft drink choices to consume in place of alcohol”.
Nick White, head of soft drinks at supplier SHS Drinks, says: “The new ranges build on the brand’s credibility as a respected wine and Prosecco substitute and replicate its alternative role for other key alcohol occasions, offering more choice for consumers who always want to have fun, but who don’t always want to have alcohol. The new ranges signal an important new era for the brand, being the first Shloer products not to have grape juice as their primary base.”
It is in the first phase of a £1.4 million marketing support package for the brand, including a high-profile consumer PR campaign for Shloer Spritzed.
Franklin & Sons recently launched three flavours from its premium core soft drink range in 25cl cans. Brand manager Rosie Crossman says: “The new format offers sophisticated flavours: Valencian Orange & Pink Grapefruit with Lemongrass; Sicilian Lemonade & English Elderflower with Crushed Juniper; and Cloudy Apple & Yorkshire Rhubarb with Cinnamon. The latter two contain just 60 calories and less than 5g of natural sugar per can.”
The producer also has a range of Infused Sodas, which take inspiration from craft distillers. The drinks are designed to be served over ice in a tall wine glass.
What's next for the premium soft drinks sector?
The health benefits of moving away from sugar and additive- filled drinks is obvious and now that some credible drinks are successfully filling this gap for healthy and refreshing beverages.
It begs the question: what’s next for the premium soft drinks sector?
One area that some industry experts think will see more activity is drinks that offer specific health-related benefits. After all, there was once a time when botanicals and herbal remedies were widely used for medicinal purposes, so why shouldn’t people consume plant-based functional ingredients in a drink? One issue is legislation around labelling and what health claims a manufacturer can actually make. But there is evidence that producers are starting to embrace the idea.
Chase Distillery founder William Chase moved into this space earlier this year with the launch of Willy’s, a “natural energy drink”, which contains on-trend ingredients such as apple cider vinegar, ginger and kombucha. The alcohol-free drink is the first of many fermented “good-for-you” drinks to come in the future, the company says.
Also earlier this year, Broadland Wineries announced it was exploring new avenues with the creation of a sister company, Live Kindly Drinks, which was set up to focus on alcohol-free drinks with social benefits.
Another company that’s new to the category is Unrooted, described as “the UK’s first high-fibre, caffeine-free energy drink based on the legendary African baobab fruit”.
The drink contains 10g of baobab, and is said to be rich with fibre and vitamin C. It is inspired by a 10,000-year-old tribal recipe from Tanzania.
Also new is Numba, which hit the UK at the end of January. It currently has four flavours: Hibiscus Original, Hibiscus Ginger, Baobab and Moringa. Co-founder Hiba El-Mohbi says: “The key purpose behind our drink is to include superfood ingredients and have clean and transparent labelling. Numba drinks are mainly tea-based with no caffeine and flavoured with natural ingredients.
“Our drinks are organic with sustainably sourced ingredients from Ghana, and produced in Denmark. We are on a journey to revolutionise the way we eat and drink so we can achieve a healthier and happier life through the nutritional power of superfoods.”
Numba’s drinks contain ingredients such as moringa, which is described as “a powerhouse of nutrients with 13 vitamins and minerals”. Baobab, spinach and ginger also feature.
Nick White at SHS Drinks believes future NPD will be driven more by health “associations” than by the direct nutritional benefits of individual drinks.
He says: “As consumers’ awareness of their alcohol intake continues to grow, we are likely to see more soft drink alternatives that directly mirror traditional alcohol-only occasions, formats or drink types.”
Vita Coca has launched Vita Coco Sparkling, with a coconut water base, in flavours of Lemon & Line and Pineapple & Passionfruit. The drink has just 20 calories with 3.7g of natural sugar a can.
Coca-Cola European Partners has its sights on the RTD coffee sector, which it says is set to more than double over the next 10 years, according to Nielsen data.
In March its Monster Energy brand unveiled its first range of RTD coffee drinks, called Monster Espresso, in two variants: Espresso & Milk and Vanilla Espresso.
Amy Burgess, senior trade communications manager, says: “It is the only cold coffee drink with a caffeine content that can rival a hot coffee and will enable us to attract new drinkers to both the energy and RTD coffee sectors.”
WATER IS RISING
Growing concerns about single-use plastics, combined with the trend for low-sugar and low-calorie refreshment, have kickstarted the emerging canned seltzer/infused water market in the US, which is starting to spill over to UK shores.
Two brands which have targeted the UK market over the past couple of years – Dalston’s and Ugly Drinks – are now reporting strong sales and a number of off-trade listings.
Premium soft drinks producers are also exploring this space. Earlier this year Cawston Press launched Cawston Dry, a two- strong range of canned sparkling water drinks.
The drinks, which hit the off-trade in April, come in flavours of Ginger & Lemon or Raspberry and are a blend of British sparkling spring water, Cawston’s pressed juice and natural extracts. They have just 10 calories a can.
Managing director Steve Kearns says: “We know shoppers are looking for drinks with low calories and less sugar without scrimping on flavour. They are also wary of artificial sweeteners.
“They want sustainably-sourced ingredients and recyclable packaging, all at a competitive price point. Cawston Dry is perfectly positioned to deliver on all fronts. It feels like a positive turning point in our sector that people are now demanding better-quality soft drinks and we are proud to be leading the charge in creating them.”
Something & Nothing makes seltzers using only natural ingredients that are low in calories. It uses grape juice and lemon juice to flavour the water-based drinks, then adds other ingredients to make flavours of Cucumber, Yuzu and Hibiscus & Rose.
While these are soft drinks, like other newcomers in the premium soft drinks sector they also straddle the mixers market as they have been designed to pair with premium spirits.
The producer says the Miranda nightclub in London’s Ace Hotel serves its Cucumber Seltzer with mezcal while The Gun in Hackney has a cocktail called Pink Lady, which pairs its Yuzu Seltzer with tequila and pink grapefruit.
Something & Nothing was created to connect with the “modern contradiction” of people striving for a healthy lifestyle who still want to enjoy social times with friends as well as the odd drink.
Co-founder Rupert Pugsley says: “You can drink a can post-yoga, on the sofa while you watch Netflix, or mixed with mezcal at a bar with friends. We don’t pass any judgment, we just know this is the way most people live their lives. We happen to make a delicious drink from good stuff that works in many scenarios.”
In the off-trade the brand has listings with Selfridges, Whole Foods, Sourced Market and independent stores.
When it comes to bottled water – still or sparkling – there are producers currently looking at how to circumnavigate the issue of single-use plastic, of which the category is one of the biggest offenders. Water is already increasingly appearing in cartons and cans. Sodastream recently launched a range of organic, vegan and gluten-free syrups in partnership with Soda Press to complement its Fruit Drops range.
A spokesperson says: “Both can be used, separately or in combination, to add a pop of flavour to your fizzy water or to whip up mocktails and cocktails in no time. “The most prevalent concern at the moment is, of course, the plastic waste involved in consuming sparkling water-based drinks, but that’s where your Sodastream machine steps in. Each one of our bottles will help you save 1,282 plastic cans and bottles, so you can enjoy the fizz guilt-free.”
Perfectly Clear will reveal a refreshed brand identity in September. Its zero-sugar drinks are made with water from its own natural spring.