We investigate sales fluctuations in the soft drinks sector since the start of lockdown. View the full report here:
What was the situation we reported for Soft Drinks at the start of lockdown (we 15 May20)?
- Full lockdown – “Stay at Home, Protect the NHS, Save Lives”
- Stay at Home = Drink Later, Inc. Multi-Packs
- YTD Sales Value change
- Drink Now @ -14%
- Drink Later @ +13%
- Soft Drinks overall @ -4%
There are definite signs of recovery for Soft Drinks, mainly through the Drink Later segment, which is still massively outperforming Drink Now.
'Drink Later' gained in YTD TY almost 7ppt share off the back of DN; this share gap is now slightly narrowing and Drink Now is showing a ‘comeback’ in the last 4 weeks:
In terms of actual sales, Drink Later has a strong growth, ahead of its 2019 sales and also ahead of Drink Now; Drink Now is slowly recovering:
So, is the range more efficient now, as a result of the shift between consumption occasions?
Drink Later value is slowing in many categories, but not by very much despite Drink Now variants seeing an improvement.
So, what have we learned?
- Drink Now has been affected significantly by COVID social distancing restrictions; being more skewed towards a particular product segment or market sector might be profitable but could also be risky, long term.
- As the social restrictions are easing and Drink Now returns (eventually – but this might not happen right away) to its new ‘normal’ levels - if we maintain the momentum that Drink Later has gained recently, this would result in incremental sales for the Soft Drinks market.
- The shift between Drink Now and Drink Later has not resulted in a better/more efficient range – there is an imperative scope for a range rationalisation. The £ per Ltr/promo/pack size mix
has helped Drink Later grow. Smaller and more premium segments (Ice Tea & Coffee and Mixers) have continued their growth through the pandemic.
You may need to challenge your assumptions, re-evaluate (and simplify?) your short to medium term strategies to benefit in this continuing period of uncertainty
