Although the report does not give figures for vended soft drinks, the information it contains is useful as it paints a detailed picture of the market, the success stories, disappointments and, importantly, the trends. Most of these apply to vending as much as any other route to market.

Total soft drinks volume dropped by two per cent, making the increase in value a significant achievement in light of the impact of the poor summer, which was exacerbated by the introduction of the smoking ban in England in pubs and bars.

The Britvic report, based on data from Nielsen, shows that across all channels cola, pure juice and juice drinks remained market leaders in both value and volume. The strongest growth was seen in the glucose and stimulant drinks, smoothies and sports drink sub-categories, highlighting the continued importance of better-for-you choices, coupled with consumers' increasing desire for functional benefits such as enhanced vitamins, minerals, electrolytes or energy.

"2007 was a challenging year for the industry. However, soft drinks manufacturers are adept at anticipating and adapting to change and we gave ample proof of that in 2007, maintaining growth in sales value despite the difficult market conditions," said Andrew Richards, Customer Management Director, Britvic.

The report identified four major trends shaping the food and drink industry: health and wellbeing, indulgence, ethical values and convenience. New product innovation that address consumers on more than one of these levels performed particularly well in 2007 - 70 per cent of the top ten soft drink innovations in 2007 tapped into more than one of the four key trends with 18 of the top 20 offering a perceived health benefit.

"The health and wellbeing trend is still a key market driver, however consumers appear to be taking a more balanced and holistic view of health. It is no longer just about diet or avoiding sugar, consumers are increasingly looking for more natural products as well as those which offer functional benefits."

Within the 83 per cent of the UK population who say they want to live a healthier lifestyle, 41 per cent claim to be concerned about diet (ie low sugar/fat/salt) while 33 per cent now claim to be concerned about naturalness and 26 per cent claim to be interested in functional benefits. The trend towards naturalness has grown significantly, with 69 per cent of consumers claiming they prefer natural foods in 2007 versus 50 per cent in 2000.

In terms of future trends in soft drinks, research that tracks buzz on the internet revealed growing interest in two key topics: new functional ingredients such as antioxidants, selenium and calcium; and sustainability. Some 46 per cent of consumers now say that they're willing to pay more for products that are ethically produced or kinder to the environment.

"What's clear from 2007", continued Andrew, "is the soft drinks industry is resilient even in tough market conditions. But the increasingly complexity of consumer preferences is a very real challenge and the need for continued insight into the consumer and appropriate innovation looks set to be even greater in 2008 and beyond."

In the Foodservice/HORECA channel, soft drinks performed exceptionally well in 2007 with wholesaler invoices increasing by 12 per cent to £236m, demonstrating the growing importance of soft drinks consumption with food.

Workplace catering, fast food and hotels saw the biggest growth, (plus £17 million) driven by excellent fruit juice sales - increasing 22 per cent to £65m. Energy drinks, bottled still and sparkling water and cola also showed considerable growth in this market.

Vending

The picture painted of soft drinks sales through vending in the Automatic Vending Association's 2007 Survey of the industry (which, admitted covers the year 2006) was somewhat less rosy.

The number of can machines continued to trend downwards. In 2006 the base was 62,580 machines, a decline of 6,134 from the previous year - or 8.9 per cent. The number of bottle machines was slightly up at 28,250 from 27,155, while carton sales seem to be marking time. This all adds up to a segment which at 90,830 machines in the base is down 5,039 on last year, or 5.3 per cent.

Machines are concentrated on big sites, but it must be borne in mind that the ‘big two' operate a large proportion of their bases outside the workplace, whereas the bigger operators outside of the ‘big two' show around 20 to 25 per cent of sites outside the workplace. Interestingly the data suggests that the smaller operators do not follow this pattern, with well over 90 per cent of their machines in the workplace.

Data sources:

Nielsen Scantrack Impulse to MAT 29 Dec 07
Nielsen On-Premise Audit to MAT Nov 07
Nielsen Homescan Panel to MAT 29 Dec 07
Nielsen Buzzmetrics which tracks over 70m online forums blogs and messaging sites
AVA Vending Survey 2007

Some key facts about the UK soft drinks market in 2007

1. Despite the worst summer on record, sales of soft drinks grew by 2.4 per cent to £8.5 billion.
2. Over two years take-home sales increased by 11 per cent.
3. Healthy, premium and functional drinks drove take-home sales up by 2.8 per cent to £6.07 billion.
4. Cola sales grew in all channels and remains the largest soft drinks sub-category.
5. Drinks with functional benefits are booming in take-home, with glucose and stimulant drinks up 25 per cent and sports drinks 16 per cent.
6. Top trends are health and well-being, indulgence, ethical values, and convenience.

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