Soft drinks category Opens More Business for GB retailers

Tuesday, March 15, 2011

One year on from Coca-Cola Enterprises Ltd's (CCE) launch of Open More Business, the Soft Drinks category is delivering new levels of growth for retailers in GB.  It is the second strongest growing category across total store in 2010 [1] proving its resilience in a difficult economic environment.

In GB the category is experiencing 6.6% growth [2] which is a significant improvement on the previous two years [3]. The rate of growth has tripled compared with 2009, and suggests good opportunities for further positive progress towards the £1.4bn incremental growth opportunity identified by CCE for the total Soft Drinks category.

• Across the Home Trade channels [4] which includes both Future Consumption and On-The-Go[5], the category grew £406m in 2010[6]
• On-The-Go performed particularly well in 2010, growing by £194m[7] . Energy is the largest On-The-Go sector within this, growing 20.3% and is now worth just under half a billion pounds[8]
• Challenging economic conditions did impact on the On-Premise channels, which declined very slightly in value from £4,074m in 2009 to £4,063m in 2010 [9]

The 2010 performance of the Soft Drinks category in GB can be attributed to a range of factors, including retailers taking an Open More Business category led approach to selling soft drinks.

Other factors included:
• Cola continued to be the largest sector growing at 8.5% and outperformed the Soft Drinks category, contributing £114.2m growth to the

category in 2010[10] 
• Energy which grew at 19%, a significant jump from 8.0% in 2009. The Energy sector contributed the most value growth (£m) to the category behind Cola in 2010[11]
• Sports gained momentum in 2010 growing at 9.7%[12] after declining -2.5% in 2009[13]
• Juice, Juice Drinks and Adult Special all returned to value growth, reversing their decline in 2009

Craig Smith, Vice President Marketing & Strategic Planning at CCE, comments:

"Our Open More Business report and approach sets a category agenda for retailers to target new growth opportunities in soft drinks. Our teams have been using the findings published last year to work with our customers to unlock their share of a £1.4billion incremental opportunity across the total category and to grow soft drinks sales in GB responsibly. In simple terms this would equate to existing Soft Drinks shoppers buying one extra soft drink every fortnight.

"It is very encouraging to see that the Soft Drinks category is already achieving new levels of growth and there is positive momentum across the category. Our aim in 2011 is to continue to make use of our research capabilities and insights to make the soft drinks category more engaging for shoppers, and more successful for our customer partnerships."

Simon Miles, Head of Shopper Marketing at CCE, comments:

"Open More Business in its first year has focused on CCE working with customers to implement the advice in the report, tailored by channel. We are continually investing behind this initiative in-store, in-depot, on-line, and across trade press. Our focus has been on bringing the report to life and making it an active commercial tool for our customers in real time, by offering a comprehensive suite of materials that CCE customers can use to help grow sales."

Ends

Notes to editors

For further information please contact Suzanne or Carly at Mercieca on 020 7485 0100 or email suzanne@mercieca.co.uk

Open More Business

In March 2010, Coca-Cola Enterprises Ltd (CCE) launched Open More Business, a report outlining evidence based insights on how people shop the Soft Drinks category.  The result of a £2million research programme, it identified a £1.4 billion incremental growth opportunity across the £11.4 billion total Soft Drinks category[14] which CCE is aiming to target as part of a five year vision for the Soft Drinks category in GB.

The £1.4bn incremental growth opportunity
The report identifies 16 environments with five of these key environments - Superstore Foodhall; Neighbourhood; Fuel; Bars, Pubs & Clubs and Canteen estimated to deliver 69%[1] of the £1.4 billion category opportunity.

Open More Business research
For Open More Business, CCE used detailed research to reach a new level of understanding of the Soft Drinks Category, and the integral elements required for continued growth. This research focused on four key areas of understanding:- consumer and shopper needs, shopper missions, the different environments in which Soft Drinks are bought, and what role Soft Drinks can play within those environments. Key findings included:

• The identification of 16[15] different shopping environments which have been divided into three main groups, Future Consumption[16], On-the-Go[17] and On-Premise[18]
• Eleven strategic Soft Drinks category drivers e.g. Category Availability; On the Go; Revive Me;  Better Quality on Tap; Drinking with Food[19]
• A  new shopper driven segmentation grouped by consumer need to include Wellness; Sports; Hydration; Stills; Refreshment; Energy; Adult Socialising

About Coca-Cola Enterprises:
Coca-Cola Enterprises, Inc. is the world's third-largest independent Coca-Cola bottler.  CCE is the sole licensed bottler for products of The Coca-Cola Company (TCCC) in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden.

In Great Britain (GB) Coca-Cola Enterprises Ltd (CCE) employs around 4,500 people across England, Scotland and Wales at manufacturing sites, regional offices and depots.

CCE is committed to minimising the environmental impact of its products and operations, with a particular focus on sustainable packaging, water stewardship, and energy and climate protection.

CCE makes, sells and delivers the following products in GB for The Coca-Cola Company (TCCC): Coca-Cola, diet Coke, Coke Zero, Fanta, Dr Pepper, Sprite, Schweppes, Schweppes Abbey Well, glacéau, Relentless, Powerade, Oasis and 5 Alive.  CCE in GB also makes, sells or delivers Monster, Appletiser, Ocean Spray and Capri-Sun on behalf of other brand owners.

CCE has the largest share of soft drinks in the UK  with on-going brand and product innovation continuing to reinforce this position of leadership within the category. Coca-Cola is the UK's number one selling soft drink  and remains one of the most innovative brands in the world today.

Sources:

[1] Nielsen Total Store Read MAT w/e 25.12.10
[2] Nielsen Total Coverage FY2010
[3] (1.8% FY2009 Nielsen) and 2008 (0.5% FY2008 Nielsen)
[4] Nielsen Total Coverage FY 2010 (Future Consumption and On-the Go)
[5] Future Consumption i.e. 'buy now, drink later'; On-The-Go - 'buy now drink now' - also known as immediate Consumption
[6] Nielsen Total Coverage FY 2010  On-The Go - 'buy now drink now'
[7] Nielsen FY2010
[8] Nielsen Total Coverage value sales FY 2010 (£497m)
[9] CGA MAT 25.12.10
[10]  Nielsen FY2010
[11] Nielsen FY2010
[12] Nielsen FY 2010
[13] Nielsen FY2010
[14] Source: Based upon total 'Off Premise' Soft Drinks sales of £6.2billion (Nielsen Total Coverage, Latest 52 Weeks to w/e. 13/02/10), total On-Premise Soft Drinks sales of £3.9 billion (Nielsen, Total On-Premise,  Latest 52 weeks to November 2009 and a CCE internal estimate of Cold Channel/'Other' channel sales of £1.3 billion
[15] The 16 environments include Superstore Food hall; Neighbourhood; Fuel; Bars, Pubs & Clubs; Canteen; Food-to- Go; Fast Food;  Restaurants; Bulk Buying; Concessions; Café/Coffee Shop; General Store; Vending. Five of these key environments - Superstore Foodhall; Neighbourhood; Fuel; Bars, Pubs & Clubs and Canteen are estimated to deliver 69%  of the £1.4 billion category opportunity
[16] Future Consumption i.e. 'buy now, drink later'
[17] On-the-Go - 'buy now drink now'
[18] On-Premise - 'buy now drink now' in a Pub & Club, Café/Coffee Shop or Canteen
[19] The 11 strategic drivers include- Category Availability; Soft Drinks for Social Occasions; On-the-Go Frequency; Wellness made Simple; Never Run Out at Home; Drinking with Food; Soft Drinks Kids Love and Mums Love to buy; Revive Me; Better Quality on Tap; Engaging with Teens
[20] Nielsen Total Coverage to 25.09.10
[21] Nielsen Total Coverage to 25.09.10