Market insight: Softly does it
Britvic has released its annual Soft Drinks Review, offering advice on how to navigate the post-pandemic market...
The foodservice market is at a crossroads, according to the latest Britvic Soft Drinks Review, with current economic pressures continuing to have an impact on the channel. At a time when the market is experiencing polarisation between value and premium when it comes to consumer preferences, soft drinks provide a refreshing opportunity for growth, particularly in light of the food-to-go market being set to reach a value of £22.2bn in 2023. Soft drinks sales throughout Britain's foodservice sector surged by 66.1% on 2020 levels to hit a value of more than £2.9bn.
Overall, the foodservice market is in volume decline on pre-pandemic levels, with value up just 4% on 2019 and 38% of consumers saying they are eating out less frequently due to finances. While this paints a challenging picture for operators, the food-to-go market is showing signs of recovery post-pandemic which Britvic highlights as an area of opportunity.
In 2022, the overall value of the eating-out market hit £95.2bn, up 44% on 2021, when trade was stifled by lockdowns and restrictions on socialising. However, the food-to-go revival looks set to continue with the market expected to reach a total value of £24.3bn by 2026.
This is being driven partly by technology – more consumers are expected to cut spend on dining out and order through delivery apps in 2023. The rise in hybrid working could also benefit foodservice outlets; with people spending fewer working days in the office, they’re likely to spend more on lunch and drinks when they do.
Offering greater choice, paying close attention to how drinks are served and encouraging people to trade up are just a few of the key takeaways from the Britvic Soft Drinks Review that can pay big dividends for operators. Britvic calculates that simply encouraging 10% of diners to trade up from tap water to a soft drink could deliver an extra £170m.
One of the key trends highlighted in the report is a growing demand for elevated experiences. Despite the squeeze on discretionary spend, Britvic believes that consumers still want to indulge when they go out to eat and drink, so it’s crucial that operators continue to give diners experiences that cannot be replicated elsewhere. This is especially important for younger consumers – research shows that 69% of those aged 16 to 24 and 64% of those aged 25 to 34 would rather spend their money on experiences than physical goods, in comparison to just 41% of those aged over 55.
The report also highlights health as another consumer trend that is gaining momentum. In 2022, 46% of British adults described themselves as being ‘very health conscious’, up from 43% in 2021. And foodservice operators are changing their menus in response. Natural, low-caffeine and energy-boosting ingredients with added health benefits, such as supporting immunity and reducing stress and fatigue, are increasingly featuring in hot and cold beverages.
Dino Labbate, GB commercial director for hospitality for Britvic, says: “The soft drinks category is supremely versatile and the value it can bring to the sector shouldn’t be underestimated. Whether consumers are looking for a meal deal that includes an on-the-go drink, a more premium experience when dining in, or healthier alternatives that continue to perform well in light of a renewed focus on wellbeing, there is something for everyone.”