Soft-drink sector hit by faltering sales in 2008

by Gemma Charles, marketingmagazine.co.uk 17-Mar-09, 08:30

LONDON - Soft-drink sales hit a plateau in 2008 as a combination of bad weather and a decline in consumer spending took its toll on the sector.

Total sales were down to £8.4bn across all channels, a fall of 1% in value, according to the Britvic Soft Drinks Report 2009. This contrasts with 2007, when value sales grew by 2.4%. Despite there also being a 2% drop in volume sales, Britvic chief executive Paul Moody said last year's results were 'resilient', given market conditions.

The report revealed smoothies and water were the hardest-hit categories. Smoothies' sales dropped 15%, with sales of the market-leading brand Innocent falling by more than a quarter (26%).

For the second year in a row, sales of plain, non-flavoured water also declined, by 9%. Vittel posted a 55% drop in sales, while those of Evian and Volvic fell 7% and 13% respectively. The report attributed water's poor performance to the downturn, poor weather last summer and environmental concern among consumers.

The big winners were energy drinks. Glucose and stimulant drinks increased sales by 12% to hit £522m. The category is now the third-biggest behind cola and pure juice. Relentless, Red Bull and market leader Lucozade, all recorded growth, as did the sports-drink category, which grew by 7% in value sales.

Soft-drink companies cut adspend during 2008 by 6%, from £128m to £103m, with Britvic/PepsiCo International reducing its outlay to £19.6m, a drop of 30%.

Britvic marketing director, Simon Stewart, claimed the lower adspend was caused by a shift away from above-the-line advertising to digital.

'Britvic actually increased its marketing spend overall in 2008, but did it in a way that was more effective than using traditional media alone,' he said.