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Cold Drinks Analysis

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Brand View Insights reviews price and promotional trends. This report takes a closer look at trends within the Cold Drinks category and the sub-categories that fall within it – i.e. Carbonates, Energy Drinks, Flavoured Water, Juice Drinks & Smoothies, Squash Drinks and Water.

Market Trends by Sub-category

The Brand View Core Index measures the shelf price of products in Tesco, Asda, Sainsbury’s and Waitrose. The analysis includes all items that have been stocked since July 2008 and which remain in stock today, to ensure an accurate measure of inflation.

Price Changes

Compared to August of last year, Brand View data shows that prices in Cold Drinks have risen at a growth rate of 1.8%, which has been relatively low compared to the overall rate of inflation. The Water sub-category has seen the most significant rise in price (up 4.3%), with Carbonates (3.9%) and Squash Drinks (3.7%) following close behind. In contrast, Energy Drinks and Flavoured Water sub-categories have seen decreases in price.

Annual Trends

Over the last four years, Carbonates have exhibited the greatest price increases – particularly in 2010 – before peaking at the start of 2012. Energy Drinks have seen a much more volatile pricing profile, with sharp peaks and troughs in an overall rising trend. Squash Drinks and Juice Drinks & Smoothies have remained relatively consistent, with the Water sub-category showing flat or dipping trends before recovering to show price increases.

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Promotional Activity

The Cold Drinks category has seen more promotional activity in recent months using the ‘Buy 2 For’ mechanic – a shift from the Save Amount mechanic used in the same period last year. The ‘Buy 2 For’ mechanic is hugely important for the category, as it represents 45% of all promotional activity in August. The general trend this year indicates that 70% of all products on promotion have used either the ‘Buy 2 For’ or ‘Buy 3 For’ mechanics, with the Save Amount mechanic representing 10-15% each month.

Data over the last four years indicates that overall promotional activity within the Cold Drinks category has risen significantly. This increase is due to more products being introduced into the market. The most noticeable trend each year sees a drop off in promotions in January before slowly increasing for Spring.

Trends by Sub-category

As indicated on the chart below, Multibuy promotions are the predominant mechanic used across the Cold Drinks category, with Flavoured Water and Juice Drinks & Smoothies using these more than others. The Squash Drinks and Water categories often use Price Reduction mechanics such as Save AmountSave a Third and Half Price.

Integrating Brand View’s Promotional History data with Sales data can give a greater understanding on whether this price and promotional mix is resulting in an overall growth in value sales. Click here for more information.

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Soft Drink Market Trends by Sub-Category

The largest sub-categories (Carbonates and Juice Drinks & Smoothies) have offered more promotions than other subcategories within Cold Drinks because they have a larger range; however, their promotional strategies varied greatly by length of promotion and depth of cut. Carbonates utilised shorter promotions and deeper discounts than the market average, whereas Juice Drinks & Smoothies opted for much longer promotions with a shallower rate of discount.

Even though the Flavoured Water sub-category is small, trends show that they are running approximately 25% more products on promotion than the Water sub-category, as well as longer periods on promotion – even when compared to other Cold Drinks sub-categories.

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