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Carbonated Soft

Drinks - UK, June 2011

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Table of contents Carbonated Soft Drinks UK, June 2011

© Mintel Group Ltd. All rights reserved. i

INTRODUCTION ..................................................................................................................................... 1

Definition ............................................................................................................................................................ 1 Excluded ............................................................................................................................................................. 1 Abbreviations ...................................................................................................................................................... 2

EXECUTIVE SUMMARY ......................................................................................................................... 3

The market ...................................................................................................................................... 3 Figure 1: Market size and forecast for value sales of carbonated soft drinks, 2006-16 ....................................... 3

Market factors ................................................................................................................................. 4 Figure 2: Trends in yearly price inflation (RPI) changes for UK soft drinks compared to all items, 2000-10 ........ 4

Companies, brands and innovation ................................................................................................ 5 Figure 3: UK take-home brand share of the carbonated soft drinks market, 2010 .............................................. 5

The consumer ................................................................................................................................. 6 Figure 4: Occasions people buy carbonated soft drinks for, April 2011 .............................................................. 7

What we think.................................................................................................................................. 7

ISSUES IN THE MARKET ...................................................................................................................... 9

Where are the future growth opportunities in such a mature market?............................................ 9 Do energy drinks pose the greatest threat to the CSD market? ..................................................... 9 Which usage occasions represent the greatest opportunities for growth? ................................... 10 What are currently the key purchase drivers for carbonated soft drinks? .................................... 11

FUTURE OPPORTUNITIES .................................................................................................................. 13

Premiumisation and indulgence .................................................................................................... 13 A Simple Balance for Health ......................................................................................................... 13

INTERNAL MARKET ENVIRONMENT ................................................................................................ 15

Key points ..................................................................................................................................... 15 Raw costs of soft drinks are rising exponentially… ...................................................................... 15

Figure 5: Trends in yearly price inflation (RPI) changes for UK soft drinks compared to all items, 2000-10 ...... 16 …but carbonated soft drinks remain a cheap option for consumers ............................................ 16

Figure 6: Price comparison for standalone soft drinks, May 2011 ..................................................................... 17 Economic downturn puts health worries in perspective ................................................................ 17

Figure 7: Agreement with healthy lifestyle statements, December 2008-March 2011 ....................................... 18 Are soft drinks starting to replace alcohol? ................................................................................... 19

Figure 8: Total UK value sales (in £ billions, at constant 2006 prices) of alcoholic versus non-alcoholic beverages, 2000-10 .......................................................................................................................................... 19

More sunshine means more sales ................................................................................................ 20 Figure 9: Annual sunshine hours 2003-10, compared to the 1971-2000 average ............................................. 20

The rising importance of ethical branding ..................................................................................... 20 Figure 10: Consumer attitudes towards packaging and recycling, July 2009 .................................................... 21

BROADER MARKET ENVIRONMENT ................................................................................................ 23

Key points ..................................................................................................................................... 23 Consumers‟ squeezed income benefits cheaper categories… .................................................... 23

Figure 11: % change in average weekly earnings compared to inflation in the UK, January 2005-April 2011 ... 24 …and drinks remains fairly high up on people‟s list of spending priorities… ............................... 24

Figure 12: Trends in what extra money is spent on, May 2011 ......................................................................... 25 …not to mention those of kids ...................................................................................................... 25

Figure 13: Trends in how 7-14-year-olds spend their pocket money, 2010 ....................................................... 26 Manufacturers are staying ahead of the legislatory curve ............................................................ 26 Growth of 25-34s will benefit category .......................................................................................... 27

Figure 14: Trends in the growth of the UK 25-34-year-old population, 2006-16 ................................................ 27 Growth of AB population means premiumisation remains important............................................ 27

Figure 15: Forecast adult population trends, by socio-economic group, 2006-16 ............................................. 28

COMPETITIVE CONTEXT .................................................................................................................... 29

Key points ..................................................................................................................................... 29 Carbonated soft drinks dwarf the increasing competition ............................................................. 29


© Mintel Group Ltd. All rights reserved. ii

Figure 16: Trends in drink types consumed in the past 12 months, 2006-10 .................................................... 30 Economic downturn changes market dynamics ........................................................................... 30 Energy drinks hone in on young men ........................................................................................... 30

Figure 17: Index of consumption of the major soft drink categories – 15-24-year-olds versus all adults, 2010 ................................................................................................................................................................. 31

Mainstream health options fail to take off ..................................................................................... 31 Fruit juice/smoothies give way to fizzy drinks among teenagers .................................................. 32

Figure 18: Trends for consumption of fizzy and other drinks amongst kids, by age, 2006-10 ........................... 32

STRENGTHS AND WEAKNESSES IN THE MARKET ........................................................................ 33

Strengths ....................................................................................................................................... 33 Weaknesses.................................................................................................................................. 33

WHO'S INNOVATING? ......................................................................................................................... 35

Key points ..................................................................................................................................... 35 Colas lead innovation… ................................................................................................................ 35

Figure 19: NPD, by flavour (top 6), 2008-10 ..................................................................................................... 35 ...and there is a general lack of exciting new flavours .................................................................. 35

Figure 20: Trends in flavours of fizzy soft drinks (excluding cola) drunk most often, 2007-10 ........................... 36 Environmental packaging comes to the fore ................................................................................. 36

Figure 21: Most popular claims for new carbonated soft drink products, 2008-10 ............................................ 37

MARKET SIZE, FORECAST AND SEGMENTATION ......................................................................... 39

Key points ..................................................................................................................................... 39 Market performs steadily but will increasingly be impacted by high inflation ............................... 39

Figure 22: Market volume and value forecast for the total carbonated soft drinks market, 2006-16 .................. 39 Take-home sales will continue to rise but margins are becoming squeezed ............................... 40

Figure 24: Market volume and value forecast for take-home carbonated soft drinks market, 2006-16 .............. 40 Diet/low-calorie brands are fuelling take-home sales ................................................................... 41

Figure 25: Value sales in the take-home sector, by sugar content, 2008-10 ..................................................... 41 Despite its potential in the on-trade, growth is likely to remain slow ............................................ 41

Figure 26: Market volume and value forecast for on-premise carbonated soft drinks market, 2006-16 ............. 42 Forecast methodology .................................................................................................................. 42

MARKET SHARE .................................................................................................................................. 43

Key points ..................................................................................................................................... 43 Coca-Cola accounts for just under a half of take-home revenue... .............................................. 43

Figure 27: UK take-home brand share of the carbonated soft drinks market, 2008-10 ..................................... 44 …but Pepsi is going head to head in the on-trade........................................................................ 44

Figure 28: UK on-premise brand value share of the carbonated soft drinks market, 2008-10 ........................... 44

COMPANIES AND PRODUCTS ........................................................................................................... 45

Key points ..................................................................................................................................... 45 AG Barr plc.................................................................................................................................... 45

Background ...................................................................................................................................................... 45 Product range ................................................................................................................................................... 45 Recent activity .................................................................................................................................................. 45

Britvic ............................................................................................................................................ 46 Background ...................................................................................................................................................... 46 Product range ................................................................................................................................................... 46 Recent activity .................................................................................................................................................. 46

Coca-Cola ..................................................................................................................................... 46 Background ...................................................................................................................................................... 46 Product range ................................................................................................................................................... 46 Recent activity .................................................................................................................................................. 46

PepsiCo ......................................................................................................................................... 47 Background ...................................................................................................................................................... 47 Product range ................................................................................................................................................... 47 Recent activity .................................................................................................................................................. 47


© Mintel Group Ltd. All rights reserved. iii

BRAND RESEARCH............................................................................................................................. 49

Brand map..................................................................................................................................... 49 Figure 29: Attitudes towards and usage of fizzy drink brands, March 2011 ...................................................... 49

Brand attitudes .............................................................................................................................. 50 Figure 30: Attitudes, by fizzy drink brand, March 2011 ..................................................................................... 50

Brand personality .......................................................................................................................... 51 Figure 31: Fizzy drink brand personality – macro image, March 2011 .............................................................. 51 Figure 32: Fizzy drink brand personality – micro image, March 2011 ............................................................... 52 Correspondence analysis ................................................................................................................................. 52

Brand experience .......................................................................................................................... 53 Figure 33: Fizzy drink brand usage, March 2011 .............................................................................................. 53 Figure 34: Satisfaction with various fizzy drink brands, March 2011 ................................................................. 54 Figure 35: Consideration of fizzy drink brands, March 2011 ............................................................................. 55 Figure 36: Consumer perceptions of current fizzy drink brand performance, March 2011 ................................ 56 Figure 37: Fizzy drink brand recommendation – Net Promoter Score, March 2011 .......................................... 57

Brand index ................................................................................................................................... 58 Figure 38: Fizzy drink brand index, March 2011 ............................................................................................... 58 Figure 39: Fizzy drink brand index versus recommendation, March 2011 ........................................................ 59

Target group analysis ................................................................................................................... 59 Figure 40: Target groups, March 2011 ............................................................................................................. 60 Figure 41: Fizzy drink brand usage, by target groups, March 2011 .................................................................. 61 Group One – The Conformists .......................................................................................................................... 61 Group Two – Simply the Best ........................................................................................................................... 62 Group Three – Shelf Stalkers ........................................................................................................................... 62 Group Four – Habitual Shoppers ...................................................................................................................... 63 Group Five – The Individualists ........................................................................................................................ 63

CHANNELS TO MARKET .................................................................................................................... 65

Key points ..................................................................................................................................... 65 The take-home channel is more dominant than ever ................................................................... 65

Figure 42: Volume sales in the total carbonated soft drinks market, by channel, 2008-10 ................................ 65 Supermarkets draw in value-conscious customers… ................................................................... 65

Figure 43: Volume and value sales in the take-home carbonated soft drinks market, by channel, 2008-10 ..... 66 …but impulse is starting to pick up ............................................................................................... 66 Challenging on-trade environment ................................................................................................ 66

Figure 44: Number of pub outlets, 2005-15 ...................................................................................................... 66

BRAND COMMUNICATION AND PROMOTION ................................................................................. 67

Key points ..................................................................................................................................... 67 Adspend declines as revenues pick up ........................................................................................ 67

Figure 45: Above-the-line spend for the total carbonated soft drinks market, 2006/07-2010/11 ........................ 68 Original Coke advertising is omnipresent… .................................................................................. 68

Figure 46: Above-the-line spend for the top ten brands in the carbonated soft drinks market, 2008-11 ............ 69 …but low-calorie brands are increasingly seeing support ............................................................ 69 Diet Coke embraces fashion ......................................................................................................... 69

CONSUMER USAGE OF CARBONATED SOFT DRINKS.................................................................. 71

Key points ..................................................................................................................................... 71 A recessionary boost – particularly for non-colas ......................................................................... 71

Figure 47: Trends in drink types consumed in the past 12 months, 2006-10 .................................................... 72 Colas benefit from greater frequency of usage............................................................................. 72

Figure 48: Number and frequency of occasions for drinking fizzy carbonates, 2010 ......................................... 72 Fizzy carbonates mainly drunk by younger C2DEs ...................................................................... 73

Figure 49: Average drinking occasions per month for carbonated soft drinks, by gender, age and socio-economic group, 2010 ...................................................................................................................................... 74

Diet drinks overtake standard ....................................................................................................... 74 Figure 50: Carbonated soft drinks bought or drunk in the past 12 months, April 2011 ...................................... 75

Low-calorie colas find right combination between taste and dieting ............................................ 76 Figure 51: How attitudes towards taste and price of carbonated soft drinks have changed now compared to a year ago – standard drinkers versus low/no-calorie drinkers, April 2011 ....................................................... 76

Premium soft drinks are the logical next step for low-calorie drinks ............................................. 76


© Mintel Group Ltd. All rights reserved. iv

Figure 52: Index of standard, low/no-calorie and premium carbonated soft drinks bought or drunk in the past 12 months, by gender, age and socio-economic group, April 2011 ................................................................... 77 Figure 53: Major three reasons people would pay more for a premium soft drink, December 2009 .................. 78

Cans are king – but there is a lack of flexibility around smaller formats ....................................... 78 Figure 54: Trends in types of colas drunk most often, 2007-10 ........................................................................ 78 Figure 55: Trends in kinds of fizzy soft drinks (excluding colas) drunk most often, 2007-10 ............................. 79

CONSUMER OCCASIONS FOR CARBONATED SOFT DRINKS USAGE ........................................ 81

Key points ..................................................................................................................................... 81 Carbonated soft drinks remain largely for in-home consumption ................................................. 81

Figure 56: Occasions people buy carbonated soft drinks for, April 2011 .......................................................... 82 Expanding their focus more towards out-of-home occasions… ................................................... 82

Figure 57: Occasions people buy carbonated soft drinks for compared to occasions that people buy bottled water for, April 2011 ......................................................................................................................................... 83

…particularly when targeting young drinkers ................................................................................ 84 Figure 58: Occasions people buy carbonated soft drinks for – 16-24-year-olds versus all drinkers, April 2011 ......................................................................................................................................................... 84

CONSUMER ATTITUDES TOWARDS CARBONATED SOFT DRINKS ............................................ 85

Key points ..................................................................................................................................... 85 Consumers increasingly care about the calories they consume .................................................. 85

Figure 59: Attitudes towards carbonated soft drinks now compared to a year ago, April 2011 ......................... 86 Figure 60: Attitudes towards carbonated soft drinks now compared to a year ago, by gender, April 2011 ........ 87

Consumers put their trust in the big brands .................................................................................. 87 Being cheap and a treat makes carbonates a compelling proposition ......................................... 88

Figure 61: General attitudes towards carbonated soft drinks, April 2011 .......................................................... 88 Young drinkers love the fact that carbonates are a „guilty pleasure‟ ............................................ 88

Figure 62: Net agreement in general attitudes towards carbonated soft drinks – 16-34-year-olds versus over-35s*, April 2011 ........................................................................................................................................ 89

Variety keeps young drinkers interested… ................................................................................... 89 …and is a key appeal of premium soft drinks ............................................................................... 90

Figure 63: General attitudes towards carbonated soft drinks – all drinkers versus premium drinkers, April 2011 ................................................................................................................................................................. 91

APPENDIX – INTERNAL MARKET ENVIRONMENT .......................................................................... 93

Figure 64: What extra money is spent on, selected statements, by demographics, May 2011 ......................... 93

APPENDIX – BROADER MARKET ENVIRONMENT .......................................................................... 97

Figure 65: GDP, PDI, consumer expenditure and savings, at constant 2006 prices, 2006-16 .......................... 97 Figure 66: Trends in the age structure of the UK population, 2006-16 .............................................................. 97

APPENDIX – COMPETITIVE CONTEXT.............................................................................................. 99

Figure 67: Drink types consumed in the past 12 months, by demographics, 2010............................................ 99 Figure 68: Drink types consumed in the past 12 months, by demographics, 2010.......................................... 101

APPENDIX – BRAND RESEARCH .................................................................................................... 103

Figure 69: Brand usage, March 2011 ............................................................................................................. 103 Figure 70: Brand commitment, March 2011 .................................................................................................... 103 Figure 71: Brand momentum, March 2011 ..................................................................................................... 104 Figure 72: Brand diversity, March 2011 .......................................................................................................... 104 Figure 73: Brand satisfaction, March 2011 ..................................................................................................... 105 Figure 74: Brand recommendation, March 2011 ............................................................................................. 105 Figure 75: Brand attitude, March 2011 ........................................................................................................... 106 Figure 76: Brand image – Macro image, March 2011 ..................................................................................... 106 Figure 77: Brand image – Micro image, March 2011 ...................................................................................... 107 Figure 78: Profile of target groups, by demographics, March 2011 ................................................................. 108 Figure 79: Psychographic segmentation, by target groups, March 2011 ........................................................ 109 Figure 80: Brand usage, by target groups, March 2011 .................................................................................. 111 Figure 81: Brand index, March 2011 ............................................................................................................... 113

APPENDIX – CONSUMER USAGE ................................................................................................... 115

Figure 82: Frequency of drinking colas, by demographics, 2010 .................................................................... 115


© Mintel Group Ltd. All rights reserved. v

Figure 83: Frequency of drinking fizzy soft drinks (excluding cola), by demographics, 2010 .......................... 117 Figure 84: Frequency of drinking fizzy minerals as mixers for alcoholic drinks, by demographics, 2010 ........ 119 Figure 85: Volumetric for drinking colas, by demographics, 2010 ................................................................... 121 Figure 86: Volumetric for drinking fizzy soft drinks (excluding cola), by demographics, 2010 ......................... 122 Figure 87: Most popular carbonated soft drinks bought or drunk in the past 12 months, by demographics, April 2011 ....................................................................................................................................................... 124 Figure 88: Next most popular carbonated soft drinks bought or drunk in the past 12 months, by demographics, April 2011 ............................................................................................................................... 127 Figure 89: Most popular carbonated soft drinks bought or drunk in the past 12 months, by demographics, April 2011 ....................................................................................................................................................... 130 Figure 90: Next most popular carbonated soft drinks bought or drunk in the past 12 months, by demographics, April 2011 ............................................................................................................................... 133

APPENDIX – CONSUMER OCCASIONS FOR CARBONATED SOFT DRINKS USAGE ............... 137

Figure 91: Occasions people buy carbonated soft drinks for, by demographics, April 2011 ............................ 137 Figure 92: Most popular general attitudes towards carbonated soft drinks, by demographics, April 2011 ...... 140 Figure 93: Next most popular general attitudes towards carbonated soft drinks, by demographics, April 2011 ....................................................................................................................................................... 143

APPENDIX – CONSUMER ATTITUDES TOWARDS CARBONATED SOFT DRINKS .................... 147

Figure 94: Most popular attitudes towards carbonated soft drinks now compared to a year ago, by demographics, April 2011 ............................................................................................................................... 147 Figure 95: Next most popular attitudes towards carbonated soft drinks now compared to a year ago, by demographics, April 2011 ............................................................................................................................... 150 Figure 96: Most popular attitudes towards carbonated soft drinks now compared to a year ago, by demographics, April 2011 ............................................................................................................................... 153 Figure 97: Next most popular attitudes towards carbonated soft drinks now compared to a year ago, by demographics, April 2011 ............................................................................................................................... 156

APPENDIX: UK RESEARCH METHODOLOGY ................................................................................ 161

Statistical Forecasting ................................................................................................................. 168 Statistical modelling .................................................................................................................... 168 Qualitative insight ........................................................................................................................ 168 The Mintel fan chart .................................................................................................................... 169 Weather analogy ......................................................................................................................... 170


© Mintel Group Ltd. All rights reserved. vi

Introduction Carbonated Soft Drinks UK, June 2011

© Mintel Group Ltd. All rights reserved. 1

Introduction The carbonated soft drinks market has in many ways been helped by the economic downturn because

of being a ‘cheap indulgence’. However, it is hugely dependent upon the multiples, meaning that it

remains a commoditised market that relies on huge volumes to make profits. With inflationary

pressure increasing, it needs to capitalise on its brand equity to charge a higher premium and make

more margin from what is essentially a mature market.

Definition

For the purposes of this report, Mintel defines the carbonates market as covering all carbonated soft

drinks sold in either the off- or on-trade. Energy/sports drinks are excluded.

The basic ingredients of soft drinks are water, a sweetener, an acid and flavouring. Under European

regulations, carbonated drinks are “a manufactured drink, optionally sweetened, acidulated,

carbonated and which contain fruit, fruit juice and other salts; the flavour may derive from vegetable

extracts or flavourings”.

Optional ingredients include fruit, carbon dioxide, preservative and colouring. Water is always the

major ingredient and represents 86% of any carbonate. In order to maintain consistency with previous

Mintel reports, the following categories are used:

colas

lemonades (including lemon-and-lime flavours)

mixers (including tonic water, ginger ale, soda water and bitter lemon); soda water differs from

fizzy water with the addition of sodium and its status as a mixer rather than a drink to be

consumed on its own

other (including general fruit-flavoured carbonates, flavoured waters, ‘traditional’ carbonates such

as ginger beer and shandy, and products such as root beer, carbonated iced teas, etc).

All mainstream carbonated soft drinks are covered, although some specialised markets (such as

premium, or adult, soft drinks) are covered by the separate titles indicated above.

Diet carbonates are included. Products that state ‘reduced sugar’ on labels must contain at least 25%

less sugar than the normal full-sugar variant of the drink: such products are not sugar-free. Products

which state ‘no added sugar’ on labels are drinks which have had no additional sugar added. As with

reduced sugar drinks, these products are not sugar-free as they may have natural sugar derived from

one of their ingredients, such as the sugar from natural orange juice.

Excluded

Specifically excluded are energy drinks, natural bottled waters and premium (adult) soft drinks,

including carbonated herbal drinks; these are covered in separate reports.

A flavoured still water is not water but what is commonly known as a clear soft drink. Under EU

bottled water regulations, nothing may be added to water, except carbon dioxide. As soon as any other

ingredient is added, whether it is a colour, flavour or sugar, the product becomes a soft drink.

Value figures throughout this report are at retail selling prices (rsp) unless otherwise stated.

Introduction Carbonated Soft Drinks UK, June 2011


Abbreviations

BBPA British Beer & Pub Association

BDA British Dietetic Association

BOGOF Buy One Get One Free

CCE Coca-Cola Enterprises

CSD Carbonated Soft Drinks

FMCG Fast-Moving Consumer Goods

FSA Food Standards Agency

GDP Gross Domestic Product

GNPD Global New Products Database

ONS Office for National Statistics

PDI Personal Disposable Income

RPI Retail Price Index

RTD Ready to Drink

SPSS Statistical Package for Social Sciences

TGI Target Group Index. For further details concerning this information, including data

regarding readership patterns of users/purchasers and details of brands, please contact

Daniel Flynn ([email protected] 020 8433 4081) at Kantar Media

BMRB

VAT Value Added Tax

Executive Summary Carbonated Soft Drinks UK, June 2011


Executive Summary “The market has been helped by a number of levers: people are drinking less alcohol meaning

that soft drinks as a whole have been gaining in „share of throat‟; the British climate has

improved since 2000 creating a greater demand for refreshing drinks; people have become less

concerned about being healthy since the economic downturn; and the product is more

competitively priced than all its competitors but for bottled water (which is available for free at

home, so hardly a like-for-like comparison).”

– Jonny Forsyth, Senior Drinks Analyst

The market

Since 2006, the carbonated soft drinks market has shown all the signs of being mature, with volume

sales remaining constant over this period. The market does, however, remain a huge revenue driver:

worth £4.45 billion in 2011.

Mintel forecasts that – helped by its value indulgence proposition, strong branding and the increasing

popularity of low-calorie variants – the market will see an improved performance over the next five

years, with volume sales increasing by 8%.

FIGURE 1: MARKET SIZE AND FORECAST FOR VALUE SALES OF CARBONATED SOFT DRINKS, 2006-16

(£m)

4,448

Best case (£m)5,929

Worst case (£m)4,499

Mintel forecast (£m)5,214

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Market

valu

e (

£m

)

95%

Confidence intervals

90%

70%

50%

Actual Forecast

Est.

SOURCE: SYMPHONYIRI GROUP/MINTEL ESTIMATE

A problem for the market is its huge reliance on the take-home channel (88% of total volume sales)

and in particular the major multiples (80% of take-home volume sales). This has meant that over the

past ten years, prices of carbonated soft drinks have grown considerably below the rate of inflation and

subsequently of other goods.



With inflation currently running high and the cost of raw materials increasing significantly, the bigger

brands such as Coca-Cola and Pepsi have become more aggressive in pushing higher prices. However,

although Mintel forecasts the market will grow by 17% in value sales between 2011 and 2016, the

expected high levels of inflation mean that in real terms the market will actually shrink by 4%, putting

further pressure on margins.

The on-trade is a growing opportunity for the market as pubs become more food-oriented and as

people increasingly look for alternatives to alcohol when out in licensed premises, be it bars or

restaurants. As a result, volume sales in the on-premise channel will reverse the decline seen from

2006-10, with Mintel forecasting a 7% increase in volume sales between 2011 and 2016.

Low-calorie carbonated soft drinks rather than standard variants are now the key drivers of sales,

having increased by 21% in value sales between 2008 and 2010, with value sales rising to over £1

billion.

Market factors

A key challenge for the market is the rising costs of raw goods such as sugar, something which has

meant that in 2010 carbonated soft drinks (as with soft drinks as a whole) saw their largest price

increase in over a decade (7 pence per litre sold).

While its cheap price point has helped the market to perform well during the economic downturn, it

has also commoditised the category and diluted the brand equity built up though significant levels of

marketing activity.

FIGURE 2: TRENDS IN YEARLY PRICE INFLATION (RPI) CHANGES FOR UK SOFT DRINKS COMPARED TO ALL ITEMS, 2000-10

SOURCE: OFFICE FOR NATIONAL STATISTICS/MINTEL



The market has been helped by a number of levers: people are drinking less alcohol meaning that soft

drinks as a whole have been gaining in ‘share of throat’; the British climate has improved since 2000

creating a greater demand for refreshing drinks; people have become less concerned about being

healthy since the economic downturn; and the product is more competitively priced than all its

competitors but for bottled water (which is available for free at home, so hardly a like-for-like

comparison).

The combination of high inflation and low wage rises has meant that UK consumers are more cash-

squeezed than at any time since the onset of the economic downturn, meaning discretionary spend is

becoming even more constricted. However, Mintel’s research shows that carbonated soft drinks have

been less impacted than more expensive luxuries among both adults and kids.

Ethical branding remains key and is an area that the large carbonated multinationals need to continue

developing. Consumers may not be the best role models themselves when it comes to being green

and/or ethical but they increasingly expect companies to do the legwork for them.

Companies, brands and innovation

Coca-Cola dominates the market in sales. Not only does it command three and a half times the value

sales of nearest rival Pepsi in the take-home market, but it also scores significantly higher among

consumers on the key brand dimensions: trust and differentiation.

This is unsurprising given its huge levels of marketing spend. Not only are Coca-Cola products more

discounted in supermarkets than any other soft drink brands, but Diet Coke and Original Coke alone

have invested £45 million in above-the-line spending in the carbonated soft drinks market in the past

three years, more than whole competitive sectors such as bottled water.

FIGURE 3: UK TAKE-HOME BRAND SHARE OF THE CARBONATED SOFT DRINKS MARKET, 2010




The story is very different in the on-premise channel where Pepsi has caught up with Coca-Cola in

terms of sales, helped by Britvic’s excellent on-trade distribution network. However, this market

represents just 12.2% of all volume sales in the market.

Pepsi Max has, however, breathed new life into its parent brand, providing Pepsi with TV support after

some years of abstinence in this medium. Coke Zero is struggling to have the same impact and has

launched an ‘ad offensive’ to steal share of 20-40-year-old males from its rival.

Own-label has seen a 7.6% decline in take-home value sales over the past three years, reflecting how

consumers have been particularly drawn towards brands they see as a guarantee of quality during the

economic downturn and the fact that the product is so affordable that it is difficult to undercut.

The consumer

Mintel’s research shows that, despite low-calorie versions selling less than standard carbonated soft

drinks, penetration-wise this segment has now overtaken standard (52% versus 51%). This is a

reflection of the increasing trend towards calorie counting combined with the popularity of the taste of

low-calorie colas.

While more people drink low-calorie colas (46%) than standard (40%), the reverse is true for low-

calorie fruit-flavoured carbonates (26%) versus standard versions (32%).

The core consumer of low-calorie carbonates is 16-54-year-old female consumers. In contrast,

standard versions have a core target audience of 16-34-year-old men.

In-home usage of carbonated soft drinks dominates, with people twice as likely to buy the product to

drink at home as for when outdoors and/or out and about. Given that UK consumers have one of the

longest commutes in Europe and young people spend much of their time out and about, on-the-go

occasions are an area that can be targeted much more efficiently, in the same way as bottled water has

achieved.

Another opportunity is to increase consumption at work. Currently only 28% buy carbonated soft

drinks to drink at this location but there are currently 31.8 million workers in the UK and the majority

of them spend more time at work than anywhere else during the week, and are often keen for small

indulgences which break up the day.



FIGURE 4: OCCASIONS PEOPLE BUY CARBONATED SOFT DRINKS FOR, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months

SOURCE: TOLUNA/MINTEL

While drinkers of carbonated soft drinks seem unbothered whether the product is unhealthy, they are

increasingly intolerant of high calorie content, with 45% more likely to consider drinking low/no-

calorie versions of carbonated soft drinks than a year ago.

This is a market where 47% of people place more trust in big and well-established rather than niche

brands which suggests that brand extensions are key to maximising revenues and smaller, niche brands

and new entrants have their work cut out.

What we think

It is vital that the market develops other revenue channels to offset its current over-reliance on

multiples, where price is hard to move and brand equity is vulnerable to commoditisation. As well as

continuing to invest and develop its on-trade proposition, this means growing distribution through

vending machines and online/digital shopping.

It is surprising that more people do not buy carbonated soft drinks to drink on the go, which seems a

perfect environment for a cheap, portable and – in the case of colas – an energy-boosting product.

Perhaps consumers need to be convinced – or reminded – of the benefits and fun in consuming these

drinks on the go and the results also suggest a need for more ‘touch points’ for the consumer to buy or

be reminded to buy carbonated soft drinks when out of home.



Coca-Cola has such dominance of the carbonated soft drinks market that, Pepsi aside, brands need to

offer something different and target a different type of consumer to succeed. Premium soft drink

brands such as Bottlegreen and Fentimans have done this really well: while they may be carbonated,

they are packaged in a much more upmarket way, and their lack of artificial ingredients means they

appeal to a different and more upmarket consumer/occasion.

People may have limited discretionary spend at the moment but you only have to look at the current

success of iPhones (penetration is up from 9% in April 2009 to 28% in October 2010; see Mobile

Phones and Network Providers – UK, January 2011) despite a standard monthly contract starting at

£35 per month to see that people are still prepared to pay more for premium items that offer them

something above and beyond what they have.

The market needs to innovate more to keep its young consumer base engaged. For example, the spirits

and cider sectors are constantly having to evolve, particularly around flavour but also packaging to

keep young (18-34-year-old) drinkers coming back for more. Yet, examples of limited edition bottles

and flavours of carbonated soft drinks are the exception rather than the norm.

Issues in the Market Carbonated Soft Drinks UK, June 2011


Issues in the Market Almost nine in ten (87%) people drink carbonated soft drinks at home, more than twice the

amount that buy them to drink on the go (38%). While the market‟s infiltration of the in-home

domain is a considerable strength, offering numerous opportunities for drinking occasions, it

seems strange that such a portable product, which seems so compatible with a quick on-the-go

indulgence, is not more popular when people are out and about. Indeed, impulse sales currently

account for only one in five units sold.

– Jonny Forsyth, Senior Drinks Analyst

Where are the future growth opportunities in such a mature market?

The carbonated soft drinks market has seen static sales for the past five years but in real terms

experienced an actual decline over this period (of £486 million at constant 2011 prices). Not only this

but its penetration has been steadily declining (from 83% of over-15s to 79% between 2006 and 2010)

as more soft drinks competitors – such as energy drinks, smoothies and bottled water – have emerged.

Given this context, the question is can manufacturers kick-start market growth or is it a question of

managing its decline?

Mintel’s report finds that when the market innovates and leverages its brand strengths through

extensions it thrives, so Pepsi Max and to a lesser extent Coke Zero have helped bring more young

men into the low-calorie category. In fact, Mintel’s research shows that the growth of low-calorie colas

has been such that the penetration of low-calorie carbonated soft drink consumers is now higher than

for standard variants.

Premium carbonates have also grown value sales (see Premium Soft Drinks – UK, January 2010) but

remain under-exploited, with none of the major brands having developed alternatives to niche brands

such as Bottlegreen, Belvoir and Fentimans.

There are good reasons to encourage people to pay more for carbonated soft drinks: the continued

growth of the AB population over the next five years; the fact that soaring costs of raw materials mean

that retaining low prices is impacting on margins; and lastly, the fact that despite the current climate of

austerity there still remains a clear underlying trend for premiumisation and indulgence. This is

especially the case for small everyday treats such as drinks: hence why premium soft drinks have

grown their value sales by 34% between 2007 and 2010 and over the same period, the growth of coffee

shops (18%) outstripped in-home coffee (10%) as people were reluctant to give up on their daily

coffee on the go.

The on-trade also has significant and so far under-utilised potential. This channel accounts for only

12% of carbonated soft drink value sales despite there being an increasing consumer demand for

healthier options in pubs, as well as the popularity of drinking soft drinks with meals – an area pubs

are increasingly pushing. However, currently consumers are put off by limited range, poor quality of

serve (mostly draught) and high price compared to take-home.

Do energy drinks pose the greatest threat to the CSD market?

Energy drinks continue to perform extremely well, and are a particular threat to traditional carbonated

soft drinks brands because they are a similar product – fizzy and flavoursome, and mostly sold in cans

– and targeting a similar core audience: 18-24-year-old men. However, they are able to command

higher prices by providing young people with extra functionality: helping to maintain their energy

levels. Functionality is an area that carbonated soft drinks have not really developed sufficiently,

something which could be remedied with innovation such as superfruit-flavoured variants.



However, perhaps a greater potential threat to the market is the wider consumer trend that is the

increasing importance to consumers of ethical branding. The CSD market has so far had quite an easy

ride when it comes to adverse publicity about its environmental impact, something which hit bottled

water sales hard and forced the market to address consumer concerns that being seen with certain

bottled water brands made them appear unethical.

It is also important to continue to invest in social responsibility in spite of the short-term budget

constrictions resulting from the adverse economic context. Coffee is an example of an industry which

responded to criticism about its dealings with ‘third world’ farmers a decade ago by creating strong

links to fair trade which is now paying off and giving the market a ‘halo effect’ relative to other

categories.

Another concern must be the market’s heavy reliance on the take-home channel – and in particular the

increasing power of the supermarkets. The conflict between Britvic and Pepsi over price rises is

evidence of how difficult it is for carbonated soft drink manufacturers to command healthy margins in

this channel, despite the benefits of shifting the product on such a large scale. However, of more

detriment to the market in the long term is the damage to brand equity and the creation of consumer

resistance to price rises which results from the commoditisation of brands such as Coca-Cola in

supermarkets. This can undermine the considerable marketing investment of brands such as Pepsi Max

and Original Coca-Cola.

The increasing popularity of low-calorie options means that health worries are no longer the threat to

sales they appeared to be a few years ago, prior to the economic downturn. The report shows that

people like to have some guilty pleasures and do not worry about having the odd indulgence as long as

it is in the context of a healthy diet. Younger consumers, in particular, are actually much more

concerned about calories.

Which usage occasions represent the greatest opportunities for growth?

Almost nine in ten (87%) people drink carbonated soft drinks at home, more than twice the amount

that buy them to drink on the go (38%). While the market’s infiltration of the in-home domain is a

considerable strength, offering numerous opportunities for drinking occasions, it seems strange that

such a portable product, which seems so compatible with a quick on-the-go indulgence, is not more

popular when people are out and about. Indeed, impulse sales currently account for only one in five

units sold.

This finding is especially surprising given that the market’s core audience of young drinkers spend

much of their time out and about, and UK consumers have one of the longest commutes to work of any

European country. Bottled water is an example of a market which has capitalised on outdoor usage by

promoting its hydration benefits and there is no reason why carbonated soft drinks cannot do the same,

as hydration requires consumption of fluids rather than necessarily water, as many falsely assume.

Another opportunity is to more aggressively target the work arena. This is a place where 31.8 million

UK people spend much of their week and mini indulgences such as a bottle of Pepsi Max can provide

people with a fun treat to break up the day and ‘keep them going’. Currently only 28% of drinkers buy

carbonated soft drinks to consume at work, and there is an opportunity for companies to pursue a more

aggressive strategy of providing and stocking company vending machines.



What are currently the key purchase drivers for carbonated soft drinks?

There are three main levers currently driving sales of carbonated soft drinks: calorie counting means

that low-calorie variants are increasingly the mainstream choice; trusted brands are comforting at a

time when money is tight, something which is helping to drive sales of colas at the expense of fruit-

flavoured carbonates; and people enjoy the ‘guilty pleasure’ of small indulgences.

Young people also like variety, and while there are plenty of brands around to choose from, many feel

it is a case of quantity over quality. That people have such faith in big brands gives the likes of Coca-

Cola and Pepsi licence to continue developing brand extensions, and to innovate more around flavours.

One way to do this is through limited edition versions, which Diet Coke has experimented with, but

which can and should be developed much further. This is something which the alcohol market has

done to good effect (eg flavoured cider/vodka, guest ales, etc).



Future Opportunities Carbonated Soft Drinks UK, June 2011


Future Opportunities Mintel‟s approach in this section goes beyond merely identifying trends. We apply trends from

Mintel‟s trend tool, Inspire, to understand the wider implications of cultural changes, gaining insight

into how retailers and brands can translate these into on-the-ground opportunities relevant to the

carbonated soft drinks market.

Premiumisation and indulgence

Mintel’s Inspire trend Premiumization and Indulgence shows how, despite the current climate of

austerity, there is still a strong underlying desire for premium products; hence the continued success of

Champagne and the coffee shop market's outperformance of the in-home coffee market.

Despite investing hugely in brand equity, fizzy carbonates is a highly commoditised market, a

reflection of its huge reliance on the take-home channel (88% of total UK volume sales) – and in

particular supermarkets (80% of take-home volume sales). This has resulted in the retail price

remaining constant rather than following inflationary price increases over the previous decade. In the

supermarket discounting culture, the likes of Coca-Cola are able to shift huge volumes, but often at the

expense of brand equity. This is despite CCE (Coca-Cola Enterprises) and Pepsi investing heavily in

marketing activity to make the brand appear more special to consumers.

Mintel’s consumer research shows how the reliance on take-home sales means that 87% of people buy

carbonated soft drinks to drink at home, with only two in five doing so either for outdoor occasions (ie

picnics) or to drink on the go. By developing more of a retail presence outside of supermarkets,

carbonated soft drink brands can take more control of their brand and pricing, and market themselves

in more premium ways.

For example, Coca-Cola could capitalise on its uniquely iconic cultural status to develop a range of

Coca-Cola bars which justify higher prices through superior ‘theatres of serve’, and provide a range of

different cocktails/‘mocktails’. It could also build on its recent recipe book by serving a menu of items

which include Coca-Cola as an ingredient. It can replicate the feel of a 1950s/60s-style US diner to tap

into nostalgia and the interest in US culture, and use its heritage as a cultural tour of the brand, ie a

history of coke adverts could be shown on loop, showing the development of the brand and how this

reflected the wider cultural landscape.

A Simple Balance for Health

Mintel’s Inspire trend A Simple Balance for Health is about how over the last few decades we’ve seen

a progression from extreme dieting to people taking a more sensible and balanced approach to eating

and drinking, ie a recognition that it is OK to indulge within the confounds of a healthy overall diet.

This trend has helped fuel the rise of low-calorie carbonates which Mintel’s research shows have for

the first time overtaken standard variants in terms of penetration (52% versus 51%) as UK consumers

justify having a regular ‘guilty pleasure’ by cutting out or reducing their sugar intake. Colas in

particular are leading the way with 46% of people now drinking low-calorie cola compared to 40%

who drink standard. Such has been its transition to mainstream status that even male-focused brand

extensions such as Pepsi Max have found a profitable market among (secretly) calorie-conscious

younger men.

In contrast, flavoured carbonates have not seen the same trend towards low calorie consumption, with

26% of people drinking low-calorie versions compared to 32% who drink standard fruit-flavoured

fizzy drinks.

Future Opportunities Carbonated Soft Drinks UK, June 2011


This is almost certainly because brands such as Sprite Zero and 7UP Free lack the same kind of brand

recognition due to smaller marketing budgets.

Therefore, rather than go head-to-head with low-calorie colas, these brands can look to develop brand

extensions which justify indulgence in other ways: for example, using extracts of superfruits, or ginger

beer containing more extracts of raw ginger rather than flavouring, as well as potentially creating

energy drink hybrid versions such as ‘7-Up Guarana’. In this way, fruit carbonates can say to

consumers if you are worried about calories drink colas, while will give you more sugar (but also

flavour) but offset that by giving you more nutrients/energy to get through the day.

Internal Market Environment Carbonated Soft Drinks UK, June 2011


Internal Market Environment

Key points

The spiralling cost of raw materials is leading to rising retail prices of carbonated soft drinks

in 2011, something which has created conflict with supermarkets.

However, compared to other soft drinks competitors, the category remains excellent value

and with major brands having an impressive brand equity, rising prices should not

adversely affect sales.

Soft drinks – of which carbonated drinks represent the major proportion – have increasingly

taken ‘share of throat’ from alcohol as people in the UK adopt healthier lifestyles and are

put off by the punitive tax-driven price rises within the alcohol market.

This has opened up a major opportunity in the on-trade, where draught carbonated colas

dominate – however, the soft drinks proposition is currently well short of what consumers

expect.

Carbonated soft drink sales have been aided since the recession by people becoming less

worried about being healthy, and more interested in having small, indulgent treats.

Sales have been buoyed generally by the UK seeing a rise in temperature since 2000, which

has helped drive the desire for refreshing soft drinks.

Ethical branding remains key and is an area that the large carbonated multinationals need

to continue developing. Consumers may not be the best role models themselves when it

comes to being green and/or ethical but they increasingly expect companies to do the

legwork for them.

Raw costs of soft drinks are rising exponentially…

The rising costs of sugar, oil and steel plus spiralling transport and utilities costs have meant that

carbonated soft drinks have had to increase prices to ensure they continue to achieve a viable

margin. Coca-Cola and Pepsi have successfully pushed price rises through and others have already

– or are looking to – follow suit.

This is not to say that all soft drinks have pursued such a strategy. Mintel’s report on Bottled

Water – UK, May 2011 showed how the price per litre of this product has actually decreased over

the past few years as the category has had to respond to consumers turning more to tap water.

Smoothies – basically, Innocent – is another market that has had to discount heavily to stem

spiralling losses in sales.

Key analysis: Nevertheless, the timing of price increases in the midst of a climate of austerity jars

with supermarket strategy to keep costs down and differentiate themselves from other multiples on

price. This has recently led to a stand-off between Britvic and Sainsbury’s over the price of Pepsi. A

similar situation has been observed in the US, where Walmart has been in conflict with major

carbonated soft drinks manufacturers over their determination to discount.



The Figure below shows that until the past two years, soft drinks prices have hardly shifted at all,

with changes well below the annual rate of inflation. This has been especially the case for

carbonated soft drinks due to the market’s heavy reliance on the multiples as a retail channel (see

Channels to Market). This long-term adherence to virtually the same price is dangerous for brand

equity and in making consumers notice and be more resistant to price rises when they do happen,

not to mention its adverse impact on margins.

FIGURE 5: TRENDS IN YEARLY PRICE INFLATION (RPI) CHANGES FOR UK SOFT DRINKS COMPARED TO ALL ITEMS, 2000-10


…but carbonated soft drinks remain a cheap option for consumers

Being a cheap item has been one of the most important factors in carbonated soft drinks

performing well throughout the economic downturn and – if you take bottled water out of the

equation on account of the fact that people can drink tap water for free at home – it is the cheapest

of all its main competitors.



FIGURE 6: PRICE COMPARISON FOR STANDALONE SOFT DRINKS, MAY 2011 Category A brand leader within that category price per 100 millilitres (£)

Smoothies Innocent (250ml) 0.72 Energy drinks Red Bull (250ml) 0.48 Juice Tropicana (330ml) 0.33 RTD squash Ribena juice (500ml) 0.20 Carbonated soft drinks Coca-Cola (330ml) 0.16 Bottled water Evian (500ml) 0.10 All prices sourced from tesco.com on 31 May 2011 SOURCE: MYSUPERMARKET.COM/MINTEL

Mintel’s consumer research for this report shows that the brand equity of the carbonated soft

drinks sector – in particular brand leader Coca-Cola – has built up through its long heritage and

ubiquitous marketing activity, meaning that consumers are more influenced by trusted, well-

known brands when purchasing than whether a brand is discounted.

Key analysis: This suggests that even accounting for sharp price increases, consumers are unlikely

to be deterred from buying a product that remains highly affordable relative to its competitors.

Britvic’s interim results for the 28 weeks ended 17 April 2011 suggest that – in the short term at

least – the price increases negotiated at the start of 2011 have not had an adverse impact on sales,

with take-home market volumes of carbonated beverages (ie also including energy drinks) growing

by an impressive 5.9% year on year.

Economic downturn puts health worries in perspective

Much like the UK crisps market, the carbonated soft drinks market has actually, if anything,

benefited from the economic downturn: firstly by providing a cheap everyday indulgence, and

secondly because worries about their finances have overridden and diminished people’s obsession

with being healthy.

Prior to 2007/08, health concerns had been attracting consumers away from carbonated soft drinks

and towards healthier alternatives such as bottled water and smoothies. Even though the latter was

much more expensive, people saw it as worth the considerable premium for the health benefits

provided.



FIGURE 7: AGREEMENT WITH HEALTHY LIFESTYLE STATEMENTS, DECEMBER 2008-MARCH 2011 Base: 2,000 16+ adults


Key analysis: Mintel’s tracker study shows that health concerns have by no means gone away: for

example, Mintel’s consumer research shows that calorie concerns have arguably never been higher.

However, it does show that people have relaxed their stance on health, a result perhaps of an

inundation with contradictory health advice/warnings but also the fact that money matters have

overridden all other consumer worries.



Are soft drinks starting to replace alcohol?

With alcohol sales in long-term decline, non-alcoholic drinks – of which carbonated soft drinks

account for by far the greatest share of sales – have increasingly gained in ‘share of throat’. For

example, at constant 2006 prices soft drinks’ share of total UK drinks expenditure rose from 15%

in 2000 to 20% in 2010.

FIGURE 8: TOTAL UK VALUE SALES (IN £ BILLIONS, AT CONSTANT 2006 PRICES) OF ALCOHOLIC VERSUS NON-ALCOHOLIC

BEVERAGES, 2000-10


This has been driven by a desire for healthier options relative to alcohol. Soft drinks have also

been helped by a cultural change which has meant less cultural lenience towards drink/driving as

well as less tolerance of drinking alcohol at lunchtime. For example, Mintel’s On-Trade Soft

Drinks – UK, December 2009 found that four in five UK drinkers of alcohol prefer to drink soft

drinks rather than alcohol at lunchtimes.

Meanwhile, soft drinks are not subject to the punitive taxation which has seen alcoholic drinks –

particularly in the on-trade – rise to increasingly high and inflation-busting levels.

Key analysis: The shift towards consumption of soft drinks provides greater opportunities for more

upmarket and healthier variations, particularly given the UK’s love of carbonated drinks.

Companies such as Bottlegreen and Belvoir have capitalised and already the premium soft drinks

market has grown to be worth £105 million (see Premium Soft Drinks – UK, January 2010).

However, greater uptake in the on-trade channel has thus far been undermined by lack of choice,

poor quality of draught serve and high mark-ups charged by pubs and bars seeking to recover

diminishing alcoholic drinks revenue. Until this is remedied, potential revenue from this channel is

a fraction of what it could be. For example, in spite of record closures there are an estimated 52,000

pub outlets in the UK, turning over £21 billion per year (see Pub Visiting – UK, September 2010)

and this channel provides a valuable alternative revenue- and brand-building opportunity from the

cost-driven culture of the supermarkets.



More sunshine means more sales

One of the factors which has helped soft drink sales to continue growing is the weather. While

perceptions are that the last two or three summers have been below par, Met Office data actually

show that in terms of annual sunshine hours, weather conditions have become markedly hotter

since 2000.

FIGURE 9: ANNUAL SUNSHINE HOURS 2003-10, COMPARED TO THE 1971-2000 AVERAGE

* provisional figure SOURCE: MET OFFICE/MINTEL

Key analysis: The result is an increase in the amount of time people in the UK spend outdoors and a

greater desire for soft drinks to keep them hydrated/refreshed. This has encouraged an already

weather-hardy UK consumer to spend more time outdoors, a trend evidenced by the explosion in

music/wider arts festivals over the past ten years. For example, in August 2010, a report

commissioned by sound insulation company Rockwool found that Britain will host 715 music

festivals in 2010.

The rising importance of ethical branding

Concern about personal finances has led many people to worry less about being green, with

Mintel’s Ethical and Green Retailing – UK, September 2009 report finding that one in five

consumers believe ‘I’m not in a financial position to think about ethical or environmental issues’.

However, paradoxically this continues to be a key and growing trend: particularly with mistrust

over institutions such as banks and parliament arguably at an all-time high.



Mintel Inspire’s trend Eco and Ego trend looks at how being green is increasingly a way of being

seen as trendy. However, most consumers expect companies to do the work for them rather than

putting in the legwork themselves (see Figure below). Hence the popularity of brands such as

Innocent (despite recent adverse publicity), which claims to donate a proportion of its profits to

charity.

FIGURE 10: CONSUMER ATTITUDES TOWARDS PACKAGING AND RECYCLING, JULY 2009 Base: 1,030 adults aged 15+

SOURCE: ETHICAL AND GREEN RETAILING – UK, SEPTEMBER 2009/BMRB/MINTEL

Coca-Cola is an example of a multinational that has been targeted for so-called ‘unethical’

practices, for example in Mark Thomas’s book about Belching out the Devil which critiques what

it sees as anti-union practices in Latin America.

Key analysis: To control public perception it is increasingly important to publicise a brand’s socially

responsible credentials. For example, Coca-Cola’s Designated Driver campaign was an excellent

example of a campaign which combined a successful sales mechanic with social responsibility. Over

the past few years it has run throughout December, allowing people to ‘buy one, get one free’ on

Coca-Cola or Diet Coke in over 8,000 UK bars. It is claimed that those establishments which took

part in the scheme experienced an uplift in both soft drink sales and dwell time.



Broader Market Environment Carbonated Soft Drinks UK, June 2011


Broader Market Environment

Key points

With wages failing to keep pace with inflation, consumer incomes are currently more

squeezed than at any point since the start of the economic downturn: the result being that

competition for discretionary income is tougher than ever.

However, Mintel’s research shows that cheap treats such as snacks, plus going out to eat or

drink, are still high up on people’s list of priorities when it comes to spending any spare

money they have at the end of the month. It is a similar story for children aged 7-14, who

remain a key source of revenue.

The industry has generally managed to stay ahead of the legislative curve through the

success of low/no-calorie versions and by providing consumers with a range of format sizes

to choose from, however, controversy around Aspartame remains.

The double-digit growth of the 25-34-year-old age group will help boost sales within the

category over the next five years as they are a key target.

Despite economic conditions being much tougher, the population of AB adults is expected to

continue growing sharply, hence the continued importance of premiumisation within this

market.

Consumers’ squeezed income benefits cheaper categories…

Consumers’ actual incomes are currently more squeezed than at any point since the economic

downturn (even the nadir of the recession), due to the fact that inflation is floating around the 5%

level due to greater import demand from developing economies. This combined with a slow

growth in wages means that the disposable income that people have left by the end of the month

has shrunk dramatically.

With this pattern now firmly established since the end of 2010, the likelihood is that it will last

throughout 2011 and into 2012. Currently, low interest rates have freed up money from those with

mortgages but much of that is being eroded by the higher cost of living and greater urge to save

money given the likelihood that interest rates will at some point increase.



FIGURE 11: % CHANGE IN AVERAGE WEEKLY EARNINGS COMPARED TO INFLATION IN THE UK, JANUARY 2005-APRIL 2011*

* average weekly earnings figures are 3 months average and inflation is based on RPI SOURCE: OFFICE FOR NATIONAL STATISTICS/MINTEL

…and drinks remains fairly high up on people’s list of spending priorities…

With less disposable income, consumers are increasingly having to prioritise which discretionary

items they can afford over others.

Key analysis: While saving any spare money is favoured by 31% of the UK population, people are

actually more likely to use it for dining out, and just as likely to go out generally (ie to the pub)

meaning there are still huge opportunities for soft drinks in the on-trade particularly for lunch

deals, given that four in five people prefer to drink soft drinks rather than alcohol at lunchtime (see

On-Trade Soft Drinks – UK, December 2009).

Mintel’s research also shows that with people spending more time indoors as a money-saving

strategy over a fifth divert discretionary spend towards food/drink for ‘special occasions’, creating a

niche for premium carbonated soft drinks such as Shloer and Fentimans as people seek to impress

guests and take advantage of cheaper supermarket prices (relative to the on-trade) by trading up

from what they might normally buy.

Indulgent snacks such as sweets, chocolate and carbonated soft drinks are also still relatively

popular as affordable everyday treats.



FIGURE 12: TRENDS IN WHAT EXTRA MONEY IS SPENT ON, MAY 2011 Base: 2,000 internet users 16+

SOURCE: GMI/MINTEL

…not to mention those of kids

Drinks remains high up on kids; priority, being the third most popular means for 7-14-year-olds to

spend their pocket money, with only snack food such as crisps, sweets and chocolates being more

popular.



FIGURE 13: TRENDS IN HOW 7-14-YEAR-OLDS SPEND THEIR POCKET MONEY, 2010 Base: 7-14-year-olds

Taken from the Youth TGI survey of around 6,000 youths aged 7-19 SOURCE: YOUTH TGI, AUTUMN 2010 KANTAR MEDIA UK LTD/MINTEL

Manufacturers are staying ahead of the legislatory curve

Advertisers of carbonated soft drinks have had to tread lightly to avoid further restrictive

legislation on their access to kids. While fizzy drinks are currently banned from being sold in

schools, the carbonated soft drinks sector has generally been successful in staying ahead of the

legislator curve, for example by not advertising on TV channels which target children such as

Nickelodeon.

Key analysis: Manufacturers have also agreed with the government to provide a range of different-

sized variants so that people can opt for smaller sizes, as the UK looks to tackle the problem of

obesity. The success of low/no-sugar variants of carbonated soft drinks has been such that this is on

target to become a bigger revenue driver than standard versions and PepsiCo has pledged to make

65% of its carbonated soft drinks sugar-free by 2012. Initiatives such as these mean that the

category can legitimately claim to be proactively responding to the obesity issue.

While the controversy about the adverse impact of Aspartame – an intense sweetener used in soft

drinks and especially low-calorie or sugar-free versions – has been quietened by studies showing it

to have no long-term health impacts, it still remains a source of minor controversy.



For example, the FSA (Food Standards Agency) has recently conducted a controversially

expensive study into the additive designed to address ‘anecdotal reports’ from consumers of

adverse reactions to Aspartame. As Mintel’s focus group for this report showed, there are still a

number of consumers who view the additive with suspicion.

Growth of 25-34s will benefit category

While the sharp projected growth of over-65s (see Appendix) is reflective of an ageing society, the

25-34-year-old demographic will see double-digit growth in the next five years, meaning a larger

pool of core consumers of carbonated soft drinks.

FIGURE 14: TRENDS IN THE GROWTH OF THE UK 25-34-YEAR-OLD POPULATION, 2006-16

SOURCE: OFFICE FOR NATIONAL STATISTICS/GAD/MINTEL

Growth of AB population means premiumisation remains important

Mintel has recently ‘downgraded’ its forecast of the growth of ABC1s, a population which has

risen exponentially since the 1970s and the shift in the UK economy from manufacturing-

dominated to service-led.

Key analysis: The economic downturn means that ABs are no longer forecast to grow as sharply

(with C2s now expected to see the greatest percentage change) as was the case in 2010 but will

nevertheless still experience a sharp 6% rise, meaning they will account for 14.8 million by 2016.

The number of those in social grade E is expected to rise by just under 3%, a result of

unemployment expected to continue creeping up throughout 2011.

The healthy growth of the high-income AB group is partly explained by older workers staying in the

employment market longer but also the fact that there are now more senior ‘white collar’ jobs

available within the economy than ever before. This confirms the continued importance and

potential for premiumisation in carbonated soft drinks despite the current economic context.



FIGURE 15: FORECAST ADULT POPULATION TRENDS, BY SOCIO-ECONOMIC GROUP, 2006-16 2006 2011 (proj) 2016 (proj) % change % change 000s 000s 000s 2006-11 2011-16

AB 12,944 13,927 14,759 +7.6 +6.0 C1 14,410 14,901 15,141 +3.4 +1.6 C2 10,340 11,058 11,913 +6.9 +7.7 D 8,082 7,721 7,388 -4.5 -4.3 E 4,074 4,151 4,268 +1.9 +2.8 Total 49,850 51,758 53,468 +3.8 +3.3

SOURCE: OFFICE FOR NATIONAL STATISTICS/TGI/MINTEL

Competitive Context Carbonated Soft Drinks UK, June 2011


Competitive Context

Key points

Carbonated soft drinks have comfortably the highest penetration among UK adults, with

fruit squash/cordials their nearest competitor.

However, the increasing range of soft drink sub-categories over the past ten years has meant

that all but energy drinks are seeing their user base shrink, despite the fact that the soft

drinks market as a whole continues to grow in the UK.

The economic downturn has drawn consumers back towards less healthy but indulgent soft

drinks like fizzy carbonates and away from drinks which are considered expensive for what

they are, ie bottled water and smoothies.

Mainstream carbonates made from natural ingredients such as Pepsi Raw have simply not

found a market, a reflection that people want the product to be a fun treat and will go

elsewhere to supplement a healthy diet.

Energy drinks’ success has been in targeting young 15-24-year-old men with their

functionality and edgy branding and this is a threat to fizzy carbonates.

Fizzy drinks usage takes off among 11-14-year-olds who are more independent from the

control of their parents.

Carbonated soft drinks dwarf the increasing competition

Carbonated soft drinks have comfortably the highest penetration of all soft drink types, a result of

appealing to a wide user base and having a long history and strong branding.

Like all soft drinks categories it is experiencing a shrinking user base as the category becomes

more crowded with sub-categories such as the relatively recent smoothies, flavoured water and

energy drinks markets.



FIGURE 16: TRENDS IN DRINK TYPES CONSUMED IN THE PAST 12 MONTHS, 2006-10 Base: adults aged 15+ 2006 2007 2008 2009 2010 % point change % % % % % 2006-10

Carbonated soft drinks* 83 81 80 80 79 -4 Energy drinks 30 31 32 32 31 +1 Fruit squashes/cordials 68 65 65 64 64 -4 Ready-to-drink fruit/vegetables drinks/smoothies 58 56 51 50 48 -10 Bottled mineral water 56 56 52 50 50 -6 Flavoured water, herbal and premium soft drinks 25 23 21 21 21 -4 * cola or fizzy soft drinks (excluding cola) or fizzy minerals as mixers for alcoholic drinks Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2007-11 (OCT-SEP)/MINTEL

Economic downturn changes market dynamics

The economic downturn has led consumers to readjust their spending priorities, meaning that soft

drinks which are considered expensive for what they are, ie bottled water and smoothies, have

struggled as consumers re-evaluate what is and is not good value.

Interestingly, premium soft drinks and flavoured water have actually maintained their pools of

users, a result of consumers being prepared to pay more for functionality and better-quality

ingredients, something which continues to benefit the energy drinks market.

Energy drinks hone in on young men

The energy drinks market has provided real competition for carbonated soft drinks and is likely –

to an extent – to have cannibalised usage among younger male consumers.

Key analysis: However, Mintel’s consumer research shows that it is used for different occasions

than energy drinks (see Consumer Occasions for Carbonated Soft Drinks Usage) – being mainly

drunk in the home rather than on the go and also seen as a cheap indulgence rather than

something to help people through the day/physical activity (see Consumer Attitudes towards

Carbonated Soft Drinks).

Much of the appeal of energy drink brands is that they have adopted an edgy communication style:

Red Bull in a mainstream way and Monster and Relentless in a more extreme fashion. One of the

reasons that Pepsi Max has outperformed rival Coke Zero is likely to be because its marketing has

followed a similar route.



FIGURE 17: INDEX OF CONSUMPTION OF THE MAJOR SOFT DRINK CATEGORIES – 15-24-YEAR-OLDS VERSUS ALL ADULTS, 2010 Base: adults aged 15+

Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2007-11 (OCT-SEP)/MINTEL

Mainstream health options fail to take off

As this report shows, while the popularity of low-calorie drinks has increased markedly (see

Consumer Usage of Carbonated Soft Drinks), consumers have been less keen on some of the

attempted natural ingredient offerings from the mainstream brands.

This is evidenced by the fact that Red Bull Cola – a ‘natural’ cola – has seen very disappointing

sales since its launch in 2008 while Pepsi Raw has been discontinued. Also, Diet Coke Plus, which

augmented the calorific benefits of Diet Coke with added vitamins and minerals (eg Vitamins B6,

B12, zinc and magnesium) and also included a green tea variant, was also withdrawn from market.

Key analysis: This reflects the fact that carbonated soft drinks are seen in the main as a cheap

indulgence and that people tend to look elsewhere for healthy options. Attempts to merge the two

are therefore problematic unless the flavour is right and this is incredibly difficult without the

intensity of flavour that sweeteners afford and that consumers are used to.



Fruit juice/smoothies give way to fizzy drinks among teenagers

Among 7-10-year-olds, fruit juices, smoothies and fruit drinks have the highest penetration but as

people reach 11-14 this changes to fizzy drinks (including energy).

Key analysis: This is likely to be because kids become more independent and have more control over

what they drink and what they spend their pocket money on (see Internal Market Environment).

Fizzy drinks (including energy) have seen a dramatic decline (7 percentage points) in their pool of

users since 2006 as parents have become more aware of health issues, in particular the problem of

obesity among children in the UK. In contrast, the fizzy drinks segment has retained its user base

among the older 11-14-year-olds.

FIGURE 18: TRENDS FOR CONSUMPTION OF FIZZY AND OTHER DRINKS AMONGST KIDS, BY AGE, 2006-10 Base: 7-14-year-olds 2006 2008 2010 % point change % % % 2006-10

All: Fizzy drinks 87 86 83 -4 Fruit juices, smoothies and fruit drinks 87 86 84 -3 Bottled water 74 71 68 -6 Flavoured milk drinks 57 59 55 -2 Flavoured bottled water 29 30 24 -5 7-10: Fizzy drinks 87 84 80 -7 Fruit juices, smoothies and fruit drinks 96 96 94 -2 Bottled water 82 80 74 -8 Flavoured milk drinks 65 67 62 -3 Flavoured bottled water 33 39 28 -5 11-14: Fizzy drinks 87 88 86 -1 Fruit juices, smoothies and fruit drinks 79 76 75 -4 Bottled water 66 63 62 -4 Flavoured milk drinks 50 51 49 -1 Flavoured bottled water 26 22 21 -5 Taken from the Youth TGI survey of around 6,000 youths aged 7-19 SOURCE: YOUTH TGI, AUTUMN 2006-10 KANTAR MEDIA UK LTD/MINTEL

Strengths and Weaknesses in the Market Carbonated Soft Drinks UK, June 2011


Strengths and Weaknesses in the Market

Strengths

The carbonated soft drinks market is worth more than any other soft drinks category, with value

sales in 2011 estimated to be £4.5 billion.

The most popular occasion consumers buy carbonated soft drinks for is to drink at home (87%)

which allows many opportunities for frequent drinking.

While the overall market is mature, there are areas of growth, most notably low/no-calorie

versions and premium soft drinks such as Bottlegreen.

The economic downturn has played to the market’s advantage, meaning consumers are looking for

established brands, are more liable to want an indulgent treat and have put health worries into

context.

Weaknesses

An over-dependence on multiples for sales means that the market has become increasingly

commoditised and the price point has grown well below the rate of inflation in the past ten years.

Prices of raw goods such as sugar are soaring, meaning that manufacturers are having to raise

prices to protect margins at a time when consumer incomes are particularly squeezed.

The on-trade remains under-utilised as a channel and consumers do not rate the soft drinks

proposition they receive in terms of healthy options, price and quality.

The market is so dominated by Coca-Cola that it is difficult for other, smaller brands to develop

any kind of significant market share.

Strengths and Weaknesses in the Market Carbonated Soft Drinks UK, June 2011


Who's Innovating? Carbonated Soft Drinks UK, June 2011


Who's Innovating?

Key points

Lack of innovation is a feature of the market. For example, despite a host of potential fruit

flavours to target younger consumers with, cola and lemonade dominate.

The category can take the lead from the alcohol industry in experimenting with new

flavourings to keep its younger user base engaged in the category.

Superfruits are an obvious area where more flavourings can develop: they combine

interesting flavours with health functionality such as high nutrient density. This kind of

functionality can be used to defend sales against the popularity of energy drinks among a

young audience.

Packaging is increasingly promoting environmental claims, but promoting no additives is the

most common claim. This is reflective of the niche but growing premium soft drinks market

which has been constantly innovating around healthier claims and flavours.

Colas lead innovation…

The majority of new products released into the carbonated soft drinks market continue to be

dominated by colas, followed by lemonade. Fizzy orange juice has become more popular in the

past couple of years.

FIGURE 19: NPD, BY FLAVOUR (TOP 6), 2008-10 2008 2009 2010 % % %

Cola 17 19 14 Lemon 12 10 13 Orange 3 12 9 Lemon & lime 1 8 4 Apple 3 2 3 Ginger beer 4 3 3 SOURCE: GNPD/MINTEL

...and there is a general lack of exciting new flavours

Looking at flavours excluding the dominant cola, ginger beer accounted for 10% of new products

in 2009 and 2010. Otherwise, flavours remain highly fragmented, reflecting the market’s rather

conservative mindset when it comes to innovating around a more diverse set of flavours.

There have been some exceptions, especially in the premium soft drinks sector where the likes of

Bottlegreen, Belvoir and Shloer provide a range of exotic flavours. However, Tesco’s own-label

chilli-tinged Fiery Cola is one of the few interesting recent innovations within the more

mainstream sector, as well as fizzy Ribena.

Of surprise has been a lack of innovation around superfruits such as açaì and pomegranate – which

not only have an appealing flavour but also health properties. The term ‘superfruit’ has become

synonymous with certain fruits that offer excellent health benefits – antioxidants and high nutrient

density.



Key analysis: Mintel’s GNPD (Global New Products Database) shows that these ingredients are

increasingly popping up in non-carbonated soft drinks and food, reflecting the increasing trend

towards consumers wanting health/functional benefits from what they consume – something which

has helped sales of energy drinks.

Baobab, one of the new-generation superfruits, has now made inroads into carbonates in Japan.

For example, from Suntory/Pepsi is a baobab-flavoured variety for the Pepsi brand: it is said to

have a spicy and refreshing taste with the African baobab fruit reportedly containing six times more

Vitamin C than oranges and twice as much calcium as milk.

Flavour innovations have been increasingly used by the UK alcohol industry to keep younger (ie 18-

34-year-old) consumers engaged in the category. For example, flavoured vodka has helped revive a

maturing sector, pear- and fruit-flavoured versions have maintained momentum in the cider

category and recently bourbon has tried to consolidate its appeal among younger consumers by

adding flavours such as Jack Daniel’s honey-flavoured whiskey and Jim Beam bourbon whiskey,

infused with natural black cherry flavours.

FIGURE 20: TRENDS IN FLAVOURS OF FIZZY SOFT DRINKS (EXCLUDING COLA) DRUNK MOST OFTEN, 2007-10 Base: adults aged 15+ who drink fizzy soft drinks 2007* 2008 2009 2010 % point change % % % % 2007-10

Lemonade 46 46 45 44 -2 Orangeade 17 16 16 15 -2 Ginger beer 9 8 10 10 +1 Dandelion and burdock 9 10 9 8 -1 Lemon and Lime 7 8 8 8 +1 Cherryade 7 7 6 7 - Blackcurrant 6 6 6 6 - Cream soda 6 6 6 6 - Bitter lemon 6 6 6 5 -1 Pineapple 4 5 4 5 +1 Limeade 2 3 3 3 +1 Passion fruit 3 3 3 3 - Grapefruit 2 3 3 2 - Other 15 16 16 17 +2 * filtered by fieldwork period (January-September 2007) Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2008-11 (OCT-SEP)/MINTEL

Environmental packaging comes to the fore

The market has increasingly embraced environmentally friendly packaging in the past three years,

with most claims focusing on the recyclability of the format.

Meanwhile, SodaStream has seen a revival due to gaining shelf space in Asda and Sainsbury’s. Its

renaissance is due to being both cheaper and more environmentally friendly than buying packaged

soft drinks. SodaStream is supporting its green credentials with a marketing campaign based

around the idea of a world with no bottles.

http://oxygeneditor.mintel.co.uk/sinatra/oxygen/display/id=546336/display/id=28583



The popularity of ‘no additives’ claims is reflective of the highly innovative premium soft drinks

niche market. Brands such as Bottlegreen have been constantly innovating around flavour as they

try to appeal to a more discerning drinker who wants a different, healthier and more upmarket soft

drink experience.

FIGURE 21: MOST POPULAR CLAIMS FOR NEW CARBONATED SOFT DRINK PRODUCTS, 2008-10

SOURCE: GNPD/MINTEL



Market Size, Forecast and Segmentation Carbonated Soft Drinks UK, June 2011


Market Size, Forecast and Segmentation

Key points

The carbonated soft drinks market is expected to see steady but unspectacular volume and

value growth over the next five years, with Mintel forecasting that the market will grow from

£4.45 billion in 2011 to £5.2 billion by 2016.

However, with inflation running high and the cost of raw materials increasing significantly,

in real terms the market will actually shrink by 4%, with a potentially adverse impact on

margins.

The take-home and on-premise sectors will experience remarkably similar levels of growth,

however, the on-trade – a market with much greater growth potential – remains problematic

and growth is not expected to outstrip take-home.

Market performs steadily but will increasingly be impacted by high inflation

The total UK carbonated soft drinks market is forecast by Mintel to grow by 8% in volume sales in

the next five years having remained static for the previous five-year period. It will also experience

a 17% value sales increase.

However, these figures mask the fact that inflation is currently running high and rising costs of

raw materials mean that carbonated soft drinks manufacturers are having to increase their prices to

retain their margin. Mintel forecasts that in real terms, this margin will actually erode in the next

five years, with value sales at constant 2011 prices – ie neutralising the effects of inflation –

declining by 4%.

FIGURE 22: MARKET VOLUME AND VALUE FORECAST FOR THE TOTAL CARBONATED SOFT DRINKS MARKET, 2006-16 Total Index Total Index £m at Index

m litres £m 2011 prices

2006 3,617 100 3,788 85 4,985 112 2007 3,541 98 3,844 86 4,836 109 2008 3,496 97 3,801 85 4,378 98 2009 3,541 98 3,957 89 4,327 97 2010 3,586 99 4,243 95 4,499 101 2011 (est) 3,606 100 4,448 100 4,448 100

2012 (fore) 3,658 101 4,678 105 4,534 102 2013 (fore) 3,701 103 4,883 110 4,524 102 2014 (fore) 3,759 104 5,032 113 4,486 101 2015 (fore) 3,811 106 5,134 115 4,390 99 2016 (fore) 3,879 108 5,214 117 4,284 96 SOURCE: SYMPHONYIRI GROUP/MINTEL ESTIMATE



FIGURE 23: MARKET SIZE AND FORECAST FOR VALUE SALES OF CARBONATED SOFT DRINKS, 2006-16

(£m)

4,448

Best case (£m)5,929

Worst case (£m)4,499

Mintel forecast (£m)5,214

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Market

valu

e (

£m

)

95%


90%

70%

50%

Actual Forecast

Est.


Take-home sales will continue to rise but margins are becoming squeezed

As with the total market, in volume terms, the take-home carbonates market has remained largely

static for the last five years (ie 2006-11), a sign that the market has reached saturation and that it is

failing to command a greater share of shelf space as its increasing number of competitors – such as

energy drinks – vie for space.

FIGURE 24: MARKET VOLUME AND VALUE FORECAST FOR TAKE-HOME CARBONATED SOFT DRINKS MARKET, 2006-16 Total Index Total Index £m at Index m litres £m 2011 prices

2006 3,135 99 2,068 81 2,721 106 2007 3,073 97 2,089 82 2,628 103 2008 3,057 97 2,141 84 2,466 96 2009 3,103 98 2,237 88 2,446 96 2010 3,140 100 2,408 94 2,553 100 2011 (est) 3,156 100 2,556 100 2,556 100

2012 (fore) 3,205 102 2,703 106 2,619 102 2013 (fore) 3,243 103 2,825 110 2,616 102 2014 (fore) 3,294 104 2,909 114 2,594 101 2015 (fore) 3,339 106 2,963 116 2,534 99 2016 (fore) 3,397 108 2,995 117 2,460 96 SOURCE: SYMPHONYIRI GROUP/MINTEL ESTIMATE

However, the uncertain economic climate has led to more people shopping in supermarkets and an

upturn in sales of carbonated soft drinks due to their strong branding (with people looking for a

guarantee of quality in times of austerity) and the fact that it represents a good value indulgence

(see Consumer Attitudes towards Carbonated Soft Drinks).



Inflationary pressures mean that cost per litre will increase from £72p in 2009 to £87p in 2013,

however, supermarkets will be highly resistant to this getting out of control and it will be difficult

for all but the biggest brands to consistently push through the price increases they want should

inflationary pressures in the sector remain high.

Key analysis: The most revealing statistic in the forecast is that at constant 2011 prices – ie

controlling from the inevitable price rises created by yearly inflation – value sales will actually

decrease by 4% over the next five years, while volume sales will see an 8% uplift. This shows how

margins will be further squeezed as a combination of consumers being cash-squeezed and

supermarkets being resistant to price changes will eat into the margins of soft drinks

manufacturers. As a result, the latter will be under increasing pressure to make further efficiency

savings in their chain of production and we could see further consolidation in a market already

dominated by CCE.

Diet/low-calorie brands are fuelling take-home sales

Diet/low-calorie brands have seen a 21% uplift in value sales over the past three years, helped by

the launch of male-targeted brands such as Pepsi Max and Coke Zero as well as the continued

popularity of Diet Coke.

FIGURE 25: VALUE SALES IN THE TAKE-HOME SECTOR, BY SUGAR CONTENT, 2008-10 2008 2009 2010 2008-10

£m % share £m % share £m % share % change

Standard 1,306 61 1,342 60 1,397 58 +7.0 Diet/low calorie 835 39 895 40 1,011 42 +21.1 Total take-home 2,141 100 2,237 100 2,408 100 +12.5

SOURCE: MINTEL

Despite its potential in the on-trade, growth is likely to remain slow

Carbonated soft drinks have seen volume sales fall from 482 million litres to an estimated 450

million between 2006 and 2011. This is despite a growing interest in soft drinks within the on-

trade, due to many pubs placing greater emphasis on food and people drinking less alcohol and

wanting healthier alternatives.

While this is an incredibly challenging market, with pubs – the bulk of the channel – seeing such

dramatic rates of closures (see Channels to Market), the decline has been a result of consumer

disaffection with the quality (especially draught), range and price of the on-trade soft drinks

proposition (see On-trade Soft Drinks – UK, December 2009).

Key analysis: While the situation is improving, with both Britvic and PepsiCo putting more

resources into improving the standard of pub soft drinks, Mintel does not expect the market to fully

exploit its potential yet. The problem is that CCE and Britvic dominate distribution to such an extent

that pubs are limited in the amount of soft drinks choice they can provide.

Not only this, but with pubs/bars struggling to turn over a profit on alcohol, a result of increasingly

punitive duty, they are looking to capitalise on the higher margins they can command for soft drinks

and food. As a result, carbonated soft drinks remain priced too high for what they deliver in terms

of quality. Consumers can – and do – compare their experience and cost of buying soft drinks for

take-home – and understandably feel short-changed.



Nevertheless, the fact that prices at constant 2011 figures will decrease from £1.21 per litre in

2011 to £1.10 in 2016 is good news for the sector and will result in an expected 7% increase in

volume sales over the next five years.

FIGURE 26: MARKET VOLUME AND VALUE FORECAST FOR ON-PREMISE CARBONATED SOFT DRINKS MARKET, 2006-16 Total Index Total Index £m at Index

m litres £m 2011 prices

2006 482 107 1,720 91 2,263 120 2007 468 104 1,755 93 2,208 117 2008 439 97 1,660 88 1,912 101 2009 438 97 1,720 91 1,881 99 2010 446 99 1,835 97 1,946 103 2011 (est) 450 100 1,892 100 1,892 100

2012 (fore) 453 101 1,976 104 1,914 101 2013 (fore) 459 102 2,059 109 1,907 101 2014 (fore) 465 103 2,123 112 1,893 100 2015 (fore) 472 105 2,171 115 1,856 98 2016 (fore) 482 107 2,219 117 1,823 96 SOURCE: SYMPHONYIRI GROUP/MINTEL ESTIMATE

Forecast methodology

Mintel has produced these forecasts based on an advanced statistical technique known as ‘multivariate

time series auto-regression’ using the statistical software package SPSS.

The model, based on historical market size data taken from Mintel’s own market size database and

supplemented by macro- and socio-economic data sourced from credible organisations (eg Office for

National Statistics, HM Treasury, Bank of England), searches for relationships between actual market

sizes and a selection of key economic and demographic determinants (independent variables) in order

to identify those predictors having the most influence on the market. The factors deemed most

important for the carbonated soft drinks market were 18-24-year-olds and 25-34-year-olds. While the

former group will experience a dip in numbers over the next five years, 25-34-year-olds will see

double-digit growth (see Broader Market Environment).

Next to historical market sizes and a current-year estimate, the fan chart illustrates the probability of

various outcomes for the market value of the carbonated soft drinks market over the next five years.

The future uncertainty within this market is illustrated by the coloured bands around the five-year

forecast. The widening bands successively show the developments that occur within 95%, 90%, 70%

and 50% probability intervals. Statistical processes predict the central forecast to fall within the darker

shaded area which illustrates 50% probability, ie a five in ten chance.

At a 95% confidence interval, we are saying that 95 out of 100 times, the forecast will fall within these

outer limits, which we call the best- and worst-case forecast as these, based on the statistically driven

forecast, are the highest (best case) and lowest (worst case) market sizes the market is expected to

achieve.

For example, for carbonated soft drinks, the best- and worst-case forecasts take the value from an

expected £4.4 billion in 2010 to £5.9 billion (best case) and £4.4 billion (worst case) in 2015. Mintel

forecasts the market to achieve sales of £5.2 billion in 2015.

Market Share Carbonated Soft Drinks UK, June 2011


Market Share

Key points

Coca-Cola completely dominates take-home sales, accounting for 48% of all value sales with

sales worth over £1 billion.

The story is very different in the on-trade, however, where Pepsi, aided by Britvic’s superior

distribution, has caught up with Coca-Cola in sales.

Own-label has performed poorly in the past three years as people gravitate towards brands

which represent a good value option in themselves.

Coca-Cola accounts for just under a half of take-home revenue...

Coca-Cola’s dominance of the take-home sector is immense, with the product worth over £1

billion and having 48% share of all value sales.

Coca-Cola has performed steadily but no better than the total category in the past three years. Its

sales were given a boost by a sales uplift from the 2010 football World Cup throughout June and

into July 2010, due to its many tie-ups with football.

It has been a strong three years for Pepsi, aided by the success of Pepsi Max which has breathed

new life into the brand and provided Pepsi with TV support after some years of abstinence in this

medium.

Irn-Bru is the fifth-bestselling take-home brand despite selling only a fraction of its overall units in

the South of England. Its performance is instead reflective of its extremely strong Scottish sales.

The decline of own-label reflects how consumers have been particularly drawn towards brands

they know during the economic downturn (see Consumer Attitudes towards Carbonated Soft

Drinks), and the amount carbonated soft drinks invest in promoting themselves relative to other

soft drink categories (see Brand Communication and Promotion).

Market Share Carbonated Soft Drinks UK, June 2011


FIGURE 27: UK TAKE-HOME BRAND SHARE OF THE CARBONATED SOFT DRINKS MARKET, 2008-10 2008 2009 2010 2008-10 £m % share £m % share £m % share % change

Coca-Cola 1,028 48.0 1,072 47.9 1,156 48.0 +12.5 Pepsi 270 12.6 284 12.7 325 13.5 +20.4 Schweppes 133 6.2 134 6.0 140 5.8 +5.3 Fanta 124 5.8 114 5.1 116 4.8 -6.5 Irn-Bru 96 4.5 101 4.5 106 4.4 +10.4 Dr Pepper 70 3.3 74 3.3 79 3.3 +12.9 Sprite 64 3.0 67 3.0 72 3.0 +12.5 7UP 33 1.5 36 1.6 41 1.7 +24.2 Tango 24 1.1 27 1.2 31 1.3 +29.2 R Whites 11 0.5 13 0.6 14 0.6 +27.3 Other 99 4.6 135 6.1 153 6.3 +54.5 Own-label 189 8.8 180 8.0 175 7.7 -7.4 Total 2,141 100 2,237 100 2,408 100 +12.5

SOURCE: MINTEL

…but Pepsi is going head to head in the on-trade

While Pepsi’s distribution in supermarkets pales in comparison to that of Coca-Cola, the story is

very different in the on-trade where it now has equivalent market share to Coca-Cola having had

an excellent three years.

Pepsi’s strong performance – particularly within pubs – has been facilitated by its partnership with

Britvic which has superior distribution to its main rival CCE (see Channels to Market).

Colas have performed particularly well in the on-trade at the expense of still drinks such as

Britvic’s J2O.

FIGURE 28: UK ON-PREMISE BRAND VALUE SHARE OF THE CARBONATED SOFT DRINKS MARKET, 2008-10 2008 2009 2010 2008-10 £m % share £m % share £m % share % change

Coca-Cola 499 30.1 493 28.7 553 30.1 +10.8 Pepsi 477 28.8 525 30.5 552 30.1 +15.7 Schweppes Lemonade 173 10.4 175 10.2 184 10.0 +6.4 R Whites 214 12.9 231 13.4 216 11.8 +0.9 J2O 197 11.9 192 11.2 185 10.1 -6.1 Other 100 6.0 104 6.0 145 7.9 +45.0 Total 1,660 100 1,720 100 1,835 100 +10.5

SOURCE: MINTEL

Companies and Products Carbonated Soft Drinks UK, June 2011


Companies and Products

Key points

Diet Coke has collaborated with Karl Lagerfeld in 2011 to create a new Diet Coke can and to

launch the Diet Coke Limited Edition Bottle Collection.

Limited edition flavours Pepsi Max Twist and Pepsi Cino – cola with lime and coffee

flavours respectively – were launched in the UK in 2010.

In September 2010, the company continued to focus on ‘health’ even as it withdrew its

health-oriented Pepsi variant, Raw, following decreased sales.

Irn-Bru launched a nine-week animated TV ad campaign in Q2 2010 focusing on the drink’s

‘power to lift people’s moods’

AG Barr plc www.agbarr.co.uk

Background

The company manufactures and distributes soft drinks mostly concentrating on Scotland and the

North of England with an increasing customer base across the UK and an annual revenue of more

than £200 million.

Product range

In the UK carbonated soft drinks market, AG Barr offers brands such as Tizer, Orangina, Rubicon

sparkling and Sun Exotic sparkling, Ka and Barr Flavour Range, in addition to its major brand,

Irn-Bru. AG Barr also has a regular and diet Big Cola can, priced at 49p.

In January 2011, the company launched a new variety/range extension of Ka Sparkling Fruit

Punch flavoured drink with a ‘Caribbean’ taste.

Diet Irn-Bru has been renamed Irn-Bru Sugar Free and all packaging of the product has been

redesigned since January 2011.

Recent activity

The company, in collaboration with The Sunday Mail and Morrisons, sponsored the Great Scot

Awards in September 2010.

AG Barr has ties with the Scottish Football League to promote its brand Irn-Bru. In August 2010,

the brand launched the ‘Ginger Boot’ initiative. As part of the ‘Tops for Youth Teams’ initiative

for 2011, the youth football club that collects the maximum number of plastic bottle caps by 7

May 2011 will be offered £10,000 in cash.

Irn-Bru launched a nine-week animated TV ad campaign in Q2 2010 focusing on the drink’s

‘power to lift people’s moods’.

http://www.agbarr.co.uk/



Britvic www.britvic.com

Background

Britvic plc is one of Europe’s leading soft drinks companies and owns Britvic Soft Drinks, which

is one of the leading manufacturers and distributors of soft drinks in the UK.

Product range

In the carbonated sugar drinks market, the company offers Tango, in apple, cherry and orange

flavours (the orange variant is also available as a ‘no added sugar’ option); the company’s own-

brand lime cordial and R Whites lemonade (also diet lemonade) and Indian tonic water; and

Shandy Bass beer.

Britvic holds a franchise agreement with PepsiCo for producing and bottling Pepsi and 7UP in the

UK. This includes Pepsi Max, Pepsi Diet and 7UP in sugar-free and cherry variants.

Recent activity

To promote Pepsi’s drinks and to make the most of the music festival, in April 2011, Britvic in

collaboration with PepsiCo launched a ten-week on-pack promotion backed by TV, radio, digital,

outdoor and in-store campaigns.

Keeping in mind its rising female clientele and targeting families that prefer a soft drink to an

alcoholic beverage, Britvic spent £11 million to promote its soft drinks in 2010 for a 12-month

campaign to launch a training programme (ExSellence) on the primary factors that boost soft drink

sales. The company offered glassware (1.1 million glasses) incorporating the new Pepsi smile logo

through pubs and bars from February 2010.

In 2010, in-store promotions for Tango saw a 15% value growth that was four times the value

growth of Fanta, following the launch of the 600ml bottle.

Coca-Cola www.coca-cola.co.uk

Background

Established in 1886, The Coca-Cola Company, based in Atlanta, US manufactures and distributes

more than 400 brands of non-alcoholic beverages with operations in over 200 countries.

In the UK, two different companies manage the business: Coca-Cola Great Britain develops and

markets new brands (it manages over 21 brands, which comprise about 100 products), and Coca-

Cola Enterprises (CCE) manufactures, markets and distributes Coca-Cola brands.

Product range

The company’s carbonated soft drink brands comprise Coca-Cola, Diet Coke, Coke Zero,

Schweppes, Sprite, Fanta, Fanta Zero, Dr Pepper, Lilt and their respective variants.

Recent activity

Diet Coke has collaborated with Karl Lagerfeld in 2011 to create a new Diet Coke can and to

launch the Diet Coke Limited Edition Bottle Collection.

http://www.britvic.com/

http://www.coca-cola.co.uk/



Coca-Cola periodically launches a number of campaigns to promote its products. For example,

Live Positively was launched in 2009 as a move towards sustainability with goals such as offering

a variety of beverages, recycling packaging and reducing its carbon footprint. The company

launched the Open Happiness campaign to promote Coca-Cola in February 2011 targeting

teenagers and young adults. Diet Coke mixes fun and fashion in the course of its Love it Light

campaign of 2011.

The company has also been building its products around sports including events such as 2010

FIFA World Cup and has been preparing for 2012 Olympics in London. It signed a three-year deal

with StreetGames, a charity that promotes sports among differently abled young people.

On 8 May 2011, Coca-Cola celebrated its 125 years of existence, and as part of the campaign, in

London and other cities in Europe, passers-by were offered a free Coca-Cola on 9 May 2011. A

TV ad campaign was launched on 19 April 2011, featuring a combination of images of previous

ads. A branded fridge magnet was also offered to its customers with every pack of Coca-Cola.

CCE launched Schweppes Lemonade, Tonic, Canada Dry and Bitter Lemon packs in celebration

of the Royal Wedding to be sold throughout April.

PepsiCo www.pepsico.co.uk

Background

PepsiCo UK & Ireland (PUK) manufactures and distributes soft drinks among other products.

Britvic manufactures, bottles and distributes all PepsiCo products in the UK and Ireland.

Product range

Pepsi Cola is the cola brand offered by the company, and its sugar-free variants include Diet Pepsi

and Pepsi Max. Its other major brand is 7UP/7UP Free.

Pepsi Max Twist and Pepsi Cino – cola with lime and coffee flavours respectively – are the

company’s limited edition flavours launched in the UK in 2010.

Recent activity

In September 2010, the company continued to focus on ‘health’ even as it withdrew its health-

oriented Pepsi variant, Raw, following decreased sales.

As of July 2010, the company’s aim was to have the sugar-free variants contribute to 65% of sales

in the carbonated drinks segment by 2015.

Directed at sustainability, as of January 2011, PepsiCo declared aims of becoming fossil-free by

2023; using only sustainable sources of energy within 15 years and eco-friendly packaging by

2018; decreasing its carbon footprint by 50% using iCrop; and eliminating water emissions in ten

years.

To increase revenue from and to promote the no-sugar cola category, the company launched

600ml single-serve bottles of the sugar-free variants in February 2010.

http://www.pepsico.co.uk/



Working in tandem with its sustainability goals, PepsiCo Global announced its first PET bottle

made from plant-based products in April 2011 and the company plans to pilot produce the same in

2012.

Brand Research Carbonated Soft Drinks UK, June 2011


Brand Research

Brand map

The Mintel Brand Research Map below illustrates a three-dimensional brandscape based on:

Differentiation: an indication of vitality and profitability. Taken from consumer perceptions of a

brand’s standout from others in its competitive sphere.

Trust: an indication of brand integrity and stature. Derived from agreement with the statement ‘a

brand that I trust’.

Experience: consumers who have ever used/visited/bought the brand, an indication of presence in

the category.

This map gives a snapshot of the current strength and quality of selected brands, where they are in

their growth and how healthy they are.

FIGURE 29: ATTITUDES TOWARDS AND USAGE OF FIZZY DRINK BRANDS, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

Coca-Cola

Pepsi

FantaSchweppes

Dr. Pepper

Irn-Bru

Shloer

20

30

40

50

60

70

10 20 30 40 50

Dif

fere

nti

ati

on

(%

)

Trust (%)

Bubble size represents usage (% ever drunk) SOURCE: GMI/MINTEL

Despite the range of tastes and flavours available in the carbonates market, there is comparatively little

brand differentiation. Trust levels vary more significantly reflecting product usage.

Coca-Cola stands out from the rest of the market having the brand with the greatest levels of trust and

differentiation. In this regard, it is a significantly stronger brand than close rival Pepsi.

Of the other brands, Schweppes has the greatest levels of trust. While Coca-Cola is the dominant cola

brand, Schweppes is the dominant lemonade and mixer brand.



The other brands fall into two groups. Irn-Bru and Dr Pepper make up one group and collectively they

might be thought of as the two quirky brands on the market based on their distinctive tastes.

The remaining three brands are seen as offering little differentiation, despite the range of tastes they

offer. Pepsi, Shloer and Fanta are finding it hard to carve out unique positions for themselves.

Brand attitudes FIGURE 30: ATTITUDES, BY FIZZY DRINK BRAND, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

A brand that I trust

cares for the environment

has consistently high quality

has a good reputation

is socially responsible

is innovative

offers good value

is worth paying

more for I am proud to be associated with

expresses my personality

This chart shows the level of association of each brand surveyed with a set of key performance attributes core to fizzy drink brands overall. The more significant an attribute is as part of a brand’s image relative to other attributes, the nearer it will be to that attribute. If a brand is between a number of attributes, it is reasonably closely associated with each of these SOURCE: GMI/MINTEL

In terms of brand attributes, many of the carbonate brands occupy similar positions in the market.

Coca-Cola is the brand with the strongest personality and the one consumers feel most closely

associated with: it’s a brand that expresses something about the drinker and adds to their sense of

pride. Dr Pepper sits close to Coca-Cola and like Coke instils a sense of pride in its drinkers; it is also

a brand which expresses something about the drinker’s personality.

Schweppes is a more traditional, British brand which helps build a sense of trust and quality and also a

strong reputation. However, it is also a brand which sits away from many of the key brand attributes

suggesting consumers are clearer about what it doesn’t stands for rather than what it does stand for.

Shloer is a premium carbonate brand associated with fresh fruit and its premium status is reflected in

the fact that it is a brand consumers feel is worth paying more for.



The remaining three brands sit close together; these are more value-oriented than the other brands.

They lack a close association with many core brand attributes apart from social responsibility (mainly

something that Irn-Bru has) and caring for the environment.

Brand personality FIGURE 31: FIZZY DRINK BRAND PERSONALITY – MACRO IMAGE, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

Boring

Fun Tired

Vibrant

Exclusive

Accessible Unappealing

Engaging

Unethical

Ethical

This chart shows all fizzy drink brands in relation to a set of broad image attributes applicable to all categories SOURCE: GMI/MINTEL

In terms of macro brand personality, the main carbonate brands fall into three clusters. In the first

cluster are Irn-Bru and Dr Pepper, which despite some quirky advertising, are seen as rather tired and

boring brands. Their unique tastes also result in a love-it-or-hate-it attitude, with many adults finding

their tastes unappealing.

Pepsi, Coke and Fanta are closely associated and seen as fun, accessible and vibrant. In some senses

these are the core of the carbonate market, being widely distributed with major investment in

advertising.

Schweppes and Shloer sit close together, but away from the three core brands. These brands are seen

as similar to but slightly more upmarket compared with the above three brands. Their brand images

and price points make them a more selective buy.



FIGURE 32: FIZZY DRINK BRAND PERSONALITY – MICRO IMAGE, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

Authentic

Cool

Genuine

Healthy

Inspiring

Natural

Nostalgic

Reassuring

Refreshing

Special Stylish

Youthful

Delicious

Indulgent

Unhealthy

This chart complements the wider brand image display, using a set of image traits specific to the fizzy drink sector SOURCE: GMI/MINTEL

Carbonate brands are by their nature mass market and often youth-focused, which explains why most

brands sit in the left hand side and towards the bottom of the Figure above. The brands are positioned

towards the youthful micro personality trait and close to the cool and inspiring traits.

The exceptions to this positioning are Shloer and Schweppes. Shloer, being more fruit-based, has a

healthier and more natural image and is considered as tastier and indulgent, even special.

Schweppes in contrast is seen as more refreshing, with the brand closely associated with lemonade and

tonic drinks.

Of the other brands, the heritage of Coca-Cola and Irn-Bru gives them more authenticity in the market,

which helps set them apart from the other main carbonate brands.

Correspondence analysis

In order to display brand images (and/or consumer attitudes towards brands), related to each brand

covered in this survey, in a joint space that is easy to understand, Mintel has conducted

correspondence analyses. Correspondence analysis is a statistical visualisation method for picturing

the associations between rows (image, attitudes) and columns (brands) of a two-way contingency

table. The significance of the relationship between a brand and its associated image is measured using

the Chi-square test. If two brands have similar response patterns regarding their perceived

images/attitudes, they are assigned similar scores on underlying dimensions and will then be displayed

close to each other in the perceptual map.



Brand experience FIGURE 33: FIZZY DRINK BRAND USAGE, MARCH 2011 Base: 1,023 internet users aged 16+

* usage = % ever drunk SOURCE: GMI/MINTEL

The two big cola brands tend to dominate the market in terms of the proportion of consumers who

have ever drunk them. As the two archetypical carbonate brands, usage is bias towards younger adults.

Fanta is the mass-market leading orange-flavoured brand and like Pepsi and Coke its usage is bias

towards younger adults. Dr Pepper, the cherry alternative to coke, has a similar profile to these

carbonate brands.

Compared with the above brands, Irn-Bru has a more even distribution of drinkers by age and is a

more working-class Scottish drink.

The bias in consumption towards younger adults does not hold for Schweppes or Shloer. Shloer has a

fairly even appeal across the age brands and is also a relatively upmarket brand in terms of socio-

economic group consumption.

Like Shloer, Schweppes also has a strong appeal among mature adults but it is more mass-market in

the sense of appealing to adults from all socio-economic grades.



FIGURE 34: SATISFACTION WITH VARIOUS FIZZY DRINK BRANDS, MARCH 2011 Base: internet users aged 16+ who have ever used the brand

0

5

10

15

20

25

30

35

40

45

50

Coca-Cola Pepsi Irn-Bru Fanta Dr. Pepper Schweppes Shloer

Excellent

Good

Average

Poor

Unsatisfactory

SOURCE: GMI/MINTEL

Positive endorsement of carbonate brands is high, indicating that the main brands are largely satisfying

their consumers. All carbonate brands enjoy a positive endorsement exceeding 40%, with Coca-Cola

having 68% of its customers rating it as excellent or good. No other brands gets an endorsement

exceeding 60%.

Shloer, Schweppes, Pepsi and Fanta are all similar, having endorsement levels from 59% (Shloer) to

53% (Fanta).

Only Dr Pepper and Irn-Bru, the two brands with the less appealing tastes, receive endorsements of

below 50%.



FIGURE 35: CONSIDERATION OF FIZZY DRINK BRANDS, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Irn-Bru

Dr. Pepper

Shloer

Schweppes

Fanta

Pepsi

Coca-Cola

This is a favourite brand

I prefer this brand over others

I have no preference for this brand over others

I would only consider using this brand if I had no other option

I would never consider using this brand

SOURCE: GMI/MINTEL

Reflecting their wide distribution, heavy marketing support and heritage, the four carbonate sector

leaders – Coca-Cola, Pepsi, Fanta and Schweppes – also have the greatest levels of brand preference.

Having said that, even for these brands less than half their drinkers are firmly committed to the brand,

with Coca-Cola having the most loyal customers with a brand commitment of 45%.

Repertoire drinking is an established phenomenon in the carbonates market, especially between

various flavour and taste categories. This sector is prone to consumers changing drink flavours and

brands depending on the occasion and this is reflected in the fact that for all brands most drinkers have

no strong preference for one brand over another.

The smaller the level of committed brand preference, the more likely the brands are to attract impulse

buyers and this indicates the importance of building and maintaining a strong brand image and shelf

position in the retail sector.



FIGURE 36: CONSUMER PERCEPTIONS OF CURRENT FIZZY DRINK BRAND PERFORMANCE, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

SOURCE: GMI/MINTEL

The carbonates sector is a dynamic and forward-moving drinks category: most of the brands are

considered to have net forward momentum.

There is clearly a head of steam building behind the cola sector. The cola drinks are seen as the most

dynamic brands. Along with Fanta, these brands are the favourites of children.

Coca-Cola, despite its longevity, is appealing to a young, metropolitan audience suggesting

momentum in both supermarkets and catering outlets, supported by its authentic and vibrant image.

Views about the forward progress of Pepsi and Fanta are similar to that of Coke’s, being led by young

metropolitan adults.

Schweppes is the largest lemonade and alcoholic drink mixer brand on the market. It is most likely to

be considered as moving ahead by both the youngest (16-24) and oldest (55+) age groups. This

perception could be based on the heavy TV advertising undertaken for the brand, aimed at appealing to

families. Its 2010 ads follow a suburban, middle-class couple as they blindly ignore the chaos of their

daily lives, content in the knowledge that 'at the end of the day, there's always a Schweppes'.



FIGURE 37: FIZZY DRINK BRAND RECOMMENDATION – NET PROMOTER SCORE, MARCH 2011 Base: internet users aged 16+ who have ever used the brand

Green: % net positive promotion Red: % net negative detraction SOURCE: GMI/MINTEL

Mintel identified three groups of customers, based on the likelihood to recommend a brand to

colleagues or friends, measured on a scale from 0-10 with 0 ‘not at all likely’ and 10 ‘extremely

likely’.

Promoters (9-10): Loyal enthusiasts who will keep buying and refer others, fuelling growth.

Passives (7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

Detractors (0-6): Unhappy customers who can damage your brand and impede growth through

negative word of mouth.

The Net Promoter Score is based on a netting of positive ‘promotion’ against negative ‘detraction’.

This results in a net positive or negative percentage.

In the carbonates market all brands, with the exception of Coca-Cola, all brands have a negative NPS.

Carbonates are all about taste and image, resulting in adults who have tried a brand but not stuck with

it becoming either indifferent or more likely detractors. It’s the Marmite syndrome – you either love it

or hate it. This is especially true of the two brands with the most unique tastes, Irn-Bru and Dr Pepper.



The standard flavoured, youth-oriented brands – Coca-Cola, Pepsi and Fanta – have a high proportion

of detractors among middle-aged and older consumers. The young love them but the older adults do

not.

Dr Pepper and Irn-Bru get negative NPS for all consumer age groups but like the above brands have

fewer detractors in the young age groups compared with the older age groups.

Both Schweppes and Shloer also tend to get a negative NPS for all age groups but both these brands

are significantly less popular among men compared with women. These brands tend to be more family

buys.

Brand index

The Mintel brand index gives an overview of a brand’s standing relative to others in its own category

or outside. A brand scoring 100 on the index would have 100% penetration, be universally seen as

unique, score universally on all attributes and be top-rated for all relevant scaled brand aspects. A

brand scoring zero on the index would be completely unknown.

FIGURE 38: FIZZY DRINK BRAND INDEX, MARCH 2011 Base: internet users aged 16+ who have heard of the brand and expressed a view

SOURCE: GMI/MINTEL



FIGURE 39: FIZZY DRINK BRAND INDEX VERSUS RECOMMENDATION, MARCH 2011 Base: internet users aged 16+ who have ever used the brand

Coca-Cola

PepsiFanta

Schweppes

Dr. Pepper

Irn-Bru

Shloer

-40

-30

-20

-10

0

10

20

20 30 40 50 60 70 80

Ne

t P

rom

ote

r S

co

re

Brand index


Coca-Cola, as might be expected, has the highest index on Mintel’s scale, being both the most widely

bought brand and the label with the overall strongest image across a number of aspects.

Again, the two brands with the more unusual tastes, Dr Pepper and Irn-Bru, are clustered together.

While neither of these are strong brands when compared with the likes of Coca-Cola, they have at least

carved out distinctive positions for themselves.

Shloer also has a clear distinct position, based on its more premium proposition and like Dr Pepper and

Irn-Bru has carved out a niche position for itself.

The remaining major brands, Schweppes, Pepsi and Fanta, all cluster together. While all have different

brand strengths and weaknesses, over all the criteria studied they collectively occupy the second tier

spot in the market, lacking the shear brand power of Coca-Cola and the more niche positions of the

smaller brands.

Target group analysis

Mintel’s brand target groups are based on psychographic analysis highlighting different attitudinal and

personality traits between people, informing their interactions with and motivations towards brands

and brand purchase.

Through varying combinations of these traits and the importance survey respondents place on them,

Mintel allocates them to one of five groups, although there are some common traits between them.

The five groups are illustrated here in relation to Mintel’s fizzy drink research sample, together with

the brands they are most likely to buy, shopping habits and the attitudes they have towards individual

brands.



FIGURE 40: TARGET GROUPS, MARCH 2011 Base: 1,023 internet users aged 16+

SOURCE: GMI/MINTEL



FIGURE 41: FIZZY DRINK BRAND USAGE, BY TARGET GROUPS, MARCH 2011 Base: 1,023 internet users aged 16+


Group One – The Conformists

Conformists are the most brand-loyal of all groups, and are primarily driven by a desire to fit in with

others. They seek reassurance from others ahead of making a purchase, and will as such think carefully

about buying something beforehand, rather than buying impulsively. However, they are the least

concerned about quality and premium products and brands.

Conformists are strictly users of mass-market and popular brands and are liable to say such brands

make them feel confident, or express their personality. Personal emotional benefits are important to

them, reflecting their concern over fitting in with others and feeling part of the crowd. In line with this,

they are among the most likely to agree that they buy brands they know their friends would approve of,

and to feel that owning fashionable brands makes them attractive.

Conformists in the carbonates sector tend to be young adults often in supervisory or clerical and junior

managerial, administrative or professional skilled jobs: 65% are under-35s. As such, many may be on

modest budgets. So while they may be the types who normally consume carbonates and who may use

mixers when drinking in cocktail bars, clubs and pubs, they tend to drink carbonates slightly less than

consumers as a whole and this is especially true for Irn-Bru, Dr Pepper and Pepsi.

Because of their conformist attitudes they are unlikely to be very adventurous in their choices and their

modest budgets will tend to exclude them from buying premium brands. Hence they opt for Coca-Cola

rather than Pepsi and traditional colas, lemonades and orange drinks rather than the more unusual

tastes of Dr Pepper and Irn-Bru.



Group Two – Simply the Best

Members of this group are by far the most concerned about quality and premium goods, but like the

Conformists are worried about their image and status. They are least likely to worry about price,

product range or offers and, while no more impulsive than average, they are arguably more likely to

buy something ‘with confidence’ when they see it.

However, they are most likely to be early adopters and adventurous in their brand and product choices,

and their status motivations are therefore more likely to be driven by projection of prestige rather than

fitting in with others – they are among the least likely to ask opinions of friends and family.

These adults tend to be aged 35-54, so neither young nor old and this is reflected in their broad

consumption of carbonates. These adults are an affluent bunch who can afford to consume a wide

range of soft drinks.

These adults like to set the trends, so they will be open to trying new brands and new drink styles.

They not only set trends; they are also likely to think it is worth paying more for something new or

something a cut above the ordinary. Given their above-average affluence, they are more likely than

other adults to consume any of the carbonates, with the surprising exception of the more premium-

positioned Shloer.

Premium quality is the key consideration for Simply the Best consumers, and a sense of indulgence,

style and sophistication is important to them. However, if they are to indulge in soft drinks then they

are likely to opt for pure fruit juices rather than something like Shloer. An aspirational air is vital to

attract them, and mass-market carbonates are unlikely to attract their attention except on a purely

practical level. It is no surprise that they show just above-average drinking of most of the carbonate

brands but comparatively low consumption of the brand Shloer, which has many higher-priced

competitor products which are closer associated with the Simply the Best personality traits of

indulgence, sophistication and style.

Group Three – Shelf Stalkers

Shelf Stalkers are the anxious shoppers of the batch, and are characterised by the propensity to

consider every facet of a purchase and the products available before committing to buy. Quality

matters to them and they are among the least likely to be impulse shoppers.

They are internally motivated, making their own minds up on whatever criteria they need to consider,

and while slightly more likely to be individualistic than others on this basis, they will to some extent

consult others before purchasing – an additional source of information to consider, although ultimately

they will make their own minds up.

Shelf stalkers are firmly skewed towards older consumers, and almost six in ten of them (58%) are

over-45s. This is the functional group, which buy on perceptions of quality and reputation. They look

for brands with heritage and tradition rather than those emphasising glamour; emotional messages and

‘sensualisation’ are likely to leave them completely cold.

This group is slightly less likely to drink carbonates compared with other consumers with the

exception of Schweppes, which demonstrates their preference for traditional brands.



Group Four – Habitual Shoppers

The Habitual Shoppers are characterised primarily by sticking to what they know, although within that

parameter they are relatively carefree and will buy products on impulse. Like Simply the Best

consumers, they are unconcerned with price and bargain shopping, although conversely they are no

more than averagely likely to be attracted to premium goods.

Interestingly and against their habitual characteristics, they do not consider themselves brand-loyal.

This indicates that they are more likely to buy ‘replacement’ products.

Habitual shoppers are mainly under-35s (75%), and they tend to be urbanites of below-average income

(C2DEs). These are the drinkers who buy from town centre supermarkets.

This group is fairly wide-ranging in its scope, showing around an average tendency to consume most

carbonates compared with consumers as a whole. But given their youthfulness and their carefree

attitudes, it is the fun and non-conformist brands that attract them. They are above-average consumers

of Dr Pepper, Irn-Bru and Pepsi. Feeling confident in their brands is important to them, but in most

cases also quite significant is a belief that a brand expresses their personality – they want to be

different from their older counterparts, so it’s Pepsi rather than Coke for them.

Group Five – The Individualists

Individualists are a smaller group representing the quirky, more bohemian end of the spectrum.

Conformism is anathema to these consumers and they are by far the most likely to be driven by doing

their own thing and standing out. They will buy based solely on their own wants without consulting

others, but at the same time they like to be admired for their choices, and their style.

These are the least habitual shoppers and will branch out to try new things, typically acting

impulsively. Quality and brand loyalty are of low importance to them, but Individualists are at the

same time most likely to take into account product ranges, price and promotions – they are bargain

hunters.

This group is relatively broadly spread across age groups, although they are found in highest

concentration among under-35s (62%).

Individualists are more likely than average to buy all brands, with the exception of Fanta, indicating

that these consumers find the right brands for themselves rather than just following the herd. These

adults are unfussed about the opinions of others, and will drink what they like and what makes them

feel good.

This group is likely to respond to more risqué or provocative marketing messages. Being at the more

‘progressive’ or quirky end of the style spectrum, they are above-average consumers of brands like

Irn-Bru and Dr Pepper which often present a ‘not like the rest’ image to the world. Moreover, they are

especially heavy drinkers of Shloer, which allows them to stand out from the crowd, showing that the

classic stereotypes of what they should drink are not for them.



Channels to Market Carbonated Soft Drinks UK, June 2011


Channels to Market

Key points

Supermarkets have benefited the most from the recession as people capitalise on their

competitive pricing model and spend more time at home.

The steep rise in multiple convenience stores has also stolen trade from independents and

smaller convenience store chains. However, the impulse sector has responded to the

challenge, particularly the larger chains such as the Co-operative Group.

The on-premise market has seen an acceleration in the decline of pubs but those that have

survived have seen positive trading of carbonated soft drinks as they focus more on their

food proposition.

The take-home channel is more dominant than ever

Take-home accounts for 87.6% of total volume sales of carbonated soft drinks, and the channel

has tightened its grip on the market since 2008.

FIGURE 42: VOLUME SALES IN THE TOTAL CARBONATED SOFT DRINKS MARKET, BY CHANNEL, 2008-10 2008 2009 2010

m litres share m litres share m litres share

On-premise 439 12.6 438 12.4 446 12.4 Take-home 3,057 87.4 3,103 87.6 3,140 87.6 Total 3,496 100 3,541 100 3,586 100


Supermarkets draw in value-conscious customers…

Supermarkets have been the big winners in the recession as consumers have taken advantage of

their heavy discounting activity and generally spent more time at home.

The rising number of multiple convenience stores such as Tesco Metro has also taken trade away

from impulse outlets. With more stores comes not only greater profit but greater buying power to

ensure they can provide lower prices than competitors.

Channels to Market Carbonated Soft Drinks UK, June 2011


FIGURE 43: VOLUME AND VALUE SALES IN THE TAKE-HOME CARBONATED SOFT DRINKS MARKET, BY CHANNEL, 2008-10 2008 2009 2010 2008-10

£m share £m share £m share % change

Grocery multiples 1,477 69 1,588 71 1,710 71 +15.8 Impulse 664 31 649 29 698 29 +5.1 Total 2,141 100 2,237 100 2,408 100 +12.5

2008 share 2009 2010 2008-10

m litres share m litres share m litres share % change

Grocery multiples 2,415 79 2,451 80 2,512 80 +4.0 Impulse 642 21 621 20 628 20 -2.2 Total 3,057 100 3,103 100 3,140 100 +2.7


…but impulse is starting to pick up

After a disappointing 2008 and 2009, impulse stores saw a reversal in fortune in 2010, helped by

convenience chains, which responded to the high street invasion of multiples’ convenience stores

by offering a better range of promotions and improving shopper experience – a good example

being the Co-operative Group. However, the smaller independents continue to struggle.

Challenging on-trade environment

The economic downturn has led to an increase in the rate of pub closures, with pub outlets down

from 56,791 in 2007 to an estimated 52,000 in 2011.

Pubs that have survived are by and large those that have adapted their offering so that food has

become an integral part of their business model.

FIGURE 44: NUMBER OF PUB OUTLETS, 2005-15 Total pub outlets Index YOY change %

2005 58,600 110 -0.7 2006 58,200 109 -0.7 2007 56,791 106 -2.4 2008 54,818 103 -3.5 2009 53,466 100 -2.5 2010 (est) 52,000 97 -2.7 2011 (fore) 50,614 97 -2.7 2012 (proj) 49,641 95 -1.9 2013 (proj) 48,632 94 -2 2014 (proj) 47,798 92 -1.7 2015 (proj) 47,078 91 -1.5 SOURCE: BBPA/MINTEL’S PUB VISITING – UK, SEPTEMBER 2010

This has helped soft drinks as a whole to overtake spirits as second-bestselling product in pubs

after beer.

The other major on-premise channel for carbonated soft drinks is restaurants, which have

performed robustly despite consumers having less disposable income.

Brand Communication and Promotion Carbonated Soft Drinks UK, June 2011


Brand Communication and Promotion

Key points

Despite smaller marketing budgets since 2007, the market massively outspends competitor

markets, ie bottled water and energy drinks.

Ironically sales have actually been better since it cut its above-the-line budget from 2008

onwards, however, brands such as Coca-Cola have discounted more deeply in supermarkets

over the past three years.

The low-calorie cola brands targeted at young men – Pepsi Max and Coke Zero – have seen

significant above-the-line support over the past three years, but Pepsi Max is resonating

more with this target audience.

Diet Coke is into a three-year strategy which aims to target its predominantly young female

user base by associating the brand with fashion.

Adspend declines as revenues pick up

The carbonated soft drinks market sees huge advertising spend compared to competing categories.

For example, between 2006 and 2008 the category spent around £45 million per year on above-

the-line promotions, compared to around the £15 million mark for sports/energy drinks (see

Sports/Energy Drinks – UK, July 2009) and around £10 million for bottled water (see Bottled

Water – UK, May 2011).

Key analysis: Ironically, sales have actually been better year on year since the leading brands

tightened their marketing budgets (see Market Size and Forecast). However, in many ways the

carbonated soft drinks category was able to bank its credit accumulated from decades of building

brand equity. This meant that come the economic downturn, consumers were more willing to go for

brands they trust and those with a nostalgic element to them.



FIGURE 45: ABOVE-THE-LINE SPEND FOR THE TOTAL CARBONATED SOFT DRINKS MARKET, 2006/07-2010/11*

* covers the period May-April for each year SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

Original Coke advertising is omnipresent…

Original Coke saw £30.3 million of above-the-line advertising spend between 2008 and 2011, ten

times the amount which CCE invested in Fanta Orange.

What the Nielsen figures do not show is that Original Coke has also discounted more than any

other carbonated soft drinks brands, with x for y being the most popular sales mechanic rather than

BOGOF.



FIGURE 46: ABOVE-THE-LINE SPEND FOR THE TOP TEN BRANDS IN THE CARBONATED SOFT DRINKS MARKET, 2008-11* 2008/09 2009/10 2010/11 2008/09-

2010/11 2008/09-2010/11

£m £m £m £m Share

Original Coke (CCE) 14.5 8.5 7.4 30.3 27.9 Diet Coke (CCE) 4.8 5.3 5.2 15.3 14.1 Coke Range (CCE) 0.5 2.9 10.3 13.7 12.6 Coca-Cola Zero (CCE) 3.2 5.6 3.1 11.9 10.9 Pepsi Max (Britvic) 4.1 4.1 2.5 10.7 9.9 Fanta Orange (CCE) 0.4 1.5 1.5 3.3 3.0 Dr Pepper (CCE) 0.6 2.4 - 2.9 2.7 Irn-Bru (AG Barr) 0.5 0.8 1.4 2.6 2.4 Schweppes Tonic (CCE) 0.6 0.8 0.3 1.7 1.5 Tango Range (Britvic) 0.6 0.6 0.1 1.4 1.3 Others 5.2 6.0 3.6 14.8 13.6 Total 34.9 38.3 35.4 108.7 100.0

* covers the period May-April for each year SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

…but low-calorie brands are increasingly seeing support

However, it is noticeable that, Original Coke apart, much of the recent advertising activity has

been driven by diet or low/no-calorie versions. In particular, Pepsi Max has been competing with

Coke Zero for the young male market – as an alternative to the female-dominated Diet Coke.

So far Pepsi Max’s marketing appears to have more resonance with its younger audience, and is

arguably regenerating interest in the Pepsi brand. Coca-Cola is currently launching a major Coke

Zero ‘ad offensive’ in an effort to steal share from rival Pepsi Max. Its TV campaign targets 20-

40-year-old men and reuses the 'Impossible made possible' brand message introduced in 2009, and

tagline 'Great Coke taste, zero sugar'.

Diet Coke embraces fashion

Diet Coke is into a three-year strategy which aims to target its predominantly young female user

base by associating the brand with fashion. The brand is also going to use TV advertising,

merchandising and packaging to promote Diet Coke’s ‘a lighter approach to fashion’ motto. Diet

Coke is sponsoring London Fashion Week and designer Karl Lagerfeld has produced three limited

edition Diet Coke bottles.

Coca-Cola has adopted a number of different strategies for Diet Coke in the last five years in an

effort to appeal to females: ranging from the Diet Coke hunk in 2007 to singer Duffy starring in a

2009 TV ad campaign. The recent Love it Light ad features the three female puppet Diet Coke

brand ambassadors on a shopping trip on the prowl for the perfect handbag.



Consumer Usage of Carbonated Soft Drinks Carbonated Soft Drinks UK, June 2011


Consumer Usage of Carbonated Soft Drinks

Key points

Mintel’s latest research shows that for the first time ever, low-calorie carbonates have

achieved a higher penetration of drinkers than standard versions in the UK.

This has been led by colas, rather than fruit-flavoured carbonates, of which more people still

drink standard rather than low-calorie versions.

The research shows that there has been a strong shift towards low-calorie colas in the past

year, perhaps a reflection that alongside Diet Coke, the increased distribution and awareness

of Pepsi Max and to a lesser extent Coke Zero has made this segment even more mainstream.

Despite less of the UK population drinking colas (27.2 million) than non-cola flavoured

carbonates (28.8 million), colas are drunk more often which drives their superior sales.

The core target audience for carbonated soft drinks are females, those in social grade C2DE

and 15-34-year-olds.

Premium soft drinks have a very similar target audience to low-calorie carbonates in that

they primarily attract a young (16-34 year-old), female and more ABC1 audience. The

appeal of their lack of artificial additives makes them a logical next step in trading these

consumers up to more expensive options.

A recessionary boost – particularly for non-colas

The soft drinks market overall has actually seen a boost from the onset of the economic downturn

in 2008, mainly due to being an indulgence at a cheap price point and the guarantee of quality (and

therefore not wasting money) as well as the nostalgic familiarity of strong branding.

Four in five of the over-15 population drink carbonated soft drinks, a penetration similar to tea and

coffee drinkers in the UK, showing that despite their younger bias, this product is consumed by all

different age ranges.

The decline of the on-trade – with pubs closing down at an unprecedented rate – has meant that

carbonated soft drinks as alcoholic mixers have struggled.



FIGURE 47: TRENDS IN DRINK TYPES CONSUMED IN THE PAST 12 MONTHS, 2006-10 Base: adults aged 15+ 2006 2007 2008 2009 2010 % point

change % point change

% % % % % 2006-08 2008-10

Any soft drinks 98 97 96 96 96 -2 - All carbonated soft drinks 83 81 80 80 79 -3 -1 Colas 59 58 57 54 55 -2 -2 Carbonated soft drinks (excluding colas and mixers for alcoholic drinks)

59 57 57 57 58 -2 +1

Carbonated soft drinks as mixers for alcoholic drinks

35 36 33 34 30 -2 -3

Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2007-11 (OCT-SEP)/MINTEL

Colas benefit from greater frequency of usage

Despite cola’s penetration falling below that of non-cola-flavoured carbonated soft drinks over the

past five years, colas generate more revenue due to greater frequency of usage.

For example, there are 27.2 million UK adults (defined by TGI as aged 15+) who drink cola

compared to 28.8 million drinkers of non-cola-flavoured carbonated soft drinks. However,

drinkers of the former consume cola on an average of 11.2 occasions per month, compared to just

9.3 for non-colas.

FIGURE 48: NUMBER AND FREQUENCY OF OCCASIONS FOR DRINKING FIZZY CARBONATES, 2010 Base: adults aged 15+ Cola Carbonates (excluding

colas and mixers)

Total UK drinkers m people 27.2 28.8 Total drinking occasions per month m occasions 304.0 267.4 Average drinking occasions per person per month 11.2 9.3 Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL

Considering the variety of flavours and brands available to carbonated soft drinks, this is testament

to how deeply engrained drinking cola is in carbonated soft drinks consumption: a triumph of

distribution, marketing and a huge level of cultural awareness.



Fizzy carbonates mainly drunk by younger C2DEs

Fizzy carbonates are drunk most frequency by those aged 15-34 and of social grade C2DE. That

ABs drink the product less often is attributable to this group being much more health-conscious,

and this group are an ideal target for the healthier, less artificial premium soft drinks such as

Shloer and Fentimans.

Women drink more carbonated soft drinks than men – driven by their huge consumption of Diet

Coke. In fact, the huge popularity of the low/no-calorie sector within carbonated drinks is

reflective of this more calorie-conscious demographic being such heavy users.

Non-cola-flavoured carbonates see an uplift in usage among 15-24s before people start falling out

of the category. In contrast, cola drinkers start to fall out of the category at an older age – as they

reach 45+.

This is likely to be because younger consumers are more experimental in trying new flavours

before defaulting to cola.



FIGURE 49: AVERAGE DRINKING OCCASIONS PER MONTH FOR CARBONATED SOFT DRINKS, BY GENDER, AGE AND SOCIO-ECONOMIC GROUP, 2010 Base: adults aged 15+ who drink cola/carbonated soft drinks (excluding cola and mixers)

Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL

Diet drinks overtake standard

Mintel’s own research, conducted online in April 2011, shows that the popularity of low/no-

calorie carbonated soft drinks is such that it now has a higher proportion of UK adult drinkers than

standard variants.



“Which of the following, if any, have you bought or drunk in the past 12 months (on its own ie not as an alcohol mixer unless stated)?”

FIGURE 50: CARBONATED SOFT DRINKS BOUGHT OR DRUNK IN THE PAST 12 MONTHS, APRIL 2011 Base: 1,500 internet users aged 16+


This is a reflection of the continued trend towards calorie counting, and while men are more

calorie-conscious than in the past there are nevertheless still clear differences based on gender,

something evident in Mintel’s qualitative focus group:

“I am a girl and like to watch my weight, so I only go for the diet drinks, usually Diet Pepsi. My

behaviour has changed in the last few years because I am now more conscious of my body

image.”

– 16-34-year-old female

“I never think about my health: I‟m sure I‟m not going to have a heart attack while drinking a

Coke.”

– 16-34-year-old male



Low-calorie colas find right combination between taste and dieting

Mintel’s research shows that low-calorie versions of cola are now comfortably more popular than

standard variants: for example, 46% bought a low-calorie cola in the past year compared to 40%

who bought a standard variant.

The reverse is true for non-colas (primarily fruit-flavoured carbonates) where standard versions

remain comfortably more popular than non-standard. This is arguably because the flavour of fruit-

flavoured colas is more compromised in lower-calorie versions than is the case with cola, while

the long-term availability of the likes of Diet Coke has allowed consumers’ tastebuds to more

readily adapt to the less intense flavour of the low-calorie cola versions.

Key analysis: In fact, Mintel’s attitudinal research shows that the preference for cola among low-

calorie drinkers of carbonated soft drinks has increased markedly over the past year compared to

drinkers of standard colas. These more diet-conscious drinkers are also increasingly viewing

carbonated soft drinks as a good value soft drink option, a reflection that they do not mind paying

more for what they perceive as the functionality of drinks which do not adversely affect their weight.

FIGURE 51: HOW ATTITUDES TOWARDS TASTE AND PRICE OF CARBONATED SOFT DRINKS HAVE CHANGED NOW COMPARED TO

A YEAR AGO – STANDARD DRINKERS VERSUS LOW/NO-CALORIE DRINKERS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months


Premium soft drinks are the logical next step for low-calorie drinks



So far the penetration for premium soft drinks such as Shloer and Fentimans is fairly low at around

one in six, a reflection that consumers are currently constricted in terms of their expenditure (see

Consumer Attitudes towards Carbonated Soft Drinks) but also that none of the major soft drinks

companies have invested significantly behind a brand – the closest being Britvic’s J2O, a

mainstream-positioned adult soft drink in the on-trade. So far these drinks are building market

share from the bottom up through niche brands/manufacturers (see Premium Soft Drinks – UK,

January 2010).

Premium soft drinks actually appeal to a very similar user base to low/no-calorie diet drinks:

namely 16-34-year-old women who tend to be more health-conscious.

FIGURE 52: INDEX OF STANDARD, LOW/NO-CALORIE AND PREMIUM CARBONATED SOFT DRINKS BOUGHT OR DRUNK IN THE PAST

12 MONTHS, BY GENDER, AGE AND SOCIO-ECONOMIC GROUP, APRIL 2011 Base: 1,500 internet users aged 16+


Premium soft drinks are on trend with the desire for better-quality soft drinks and more natural but

flavoursome health option compared to drinks such as Diet Coke which are seen as good for

calorie control rather than general health:

“I always drink Diet Pepsi or Diet Coke. However, although it has no sugar it has huge

amounts of Aspartame which is very sickly sweet to the taste.”


Key analysis: Mintel’s analysis shows that the quality most people would pay extra for in a premium

soft drink is that it has no artificial ingredients (see Premium Soft Drinks – UK, January 2010),

with lack of calories in third place. This represents more of an opportunity for fruit-based

carbonates than colas, due to being able to draw on natural healthy ingredients rather than

sweeteners to achieve an authentic taste.



FIGURE 53: MAJOR THREE REASONS PEOPLE WOULD PAY MORE FOR A PREMIUM SOFT DRINK, DECEMBER 2009

SOURCE: TOLUNA/MINTEL’S PREMIUM SOFT DRINKS – UK, JANUARY 2010

Cans are king – but there is a lack of flexibility around smaller formats

Cans are increasingly popular, partly because they are generally better at retaining the fizziness of

carbonated soft drinks and also because you can stack more onto shelves. There have also been a

number of supermarket offers – such as two-for-one mechanics on multipacks of cans.

FIGURE 54: TRENDS IN TYPES OF COLAS DRUNK MOST OFTEN, 2007-10 Base: adults aged 15+ who drink colas 2007* 2008 2009 2010 % point change % % % % 2007-10

Cans 45 46 45 49 +4 Small bottles (500ml or less) 21 22 22 23 +2 Large bottles (more than 500ml) 39 37 37 37 -2 * filtered by fieldwork period (January-September 2007) Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2008-11 (OCT-SEP)/MINTEL



FIGURE 55: TRENDS IN KINDS OF FIZZY SOFT DRINKS (EXCLUDING COLAS) DRUNK MOST OFTEN, 2007-10 Base: adults aged 15+ who drink fizzy soft drinks (excluding colas) 2007* 2008 2009 2010 % point change % % % % 2007-10

Cans 33 33 35 36 +3 Small bottles (500ml or less) 29 31 30 29 - Large bottles (more than 500ml) 39 38 36 33 -6 * filtered by fieldwork period (January-September 2007) Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2008-11 (OCT-SEP)/MINTEL

Coca-Cola is one of the few carbonated soft drink brands to offer a smaller 150ml aluminium can

as an alternative to the typical 330ml format in major supermarkets. In fact, Pepsi Max has

actually gone the other way: offering 600ml bottles at the same price as 500ml bottles, something

which gives the consumer a strong sense of added value. However, generally the trend towards

larger bottles has receded as consumers and manufacturers become more sensitive to the issue of

obesity.

Key analysis: Nevertheless, considering the opportunity to more effectively target on-the-go

occasions (see Consumer Occasions for Carbonated Soft Drinks Usage), it is surprising that the

industry has not done more to provide even lighter, more portable and more snack-size portions.

Reduced portion sizes have been sweeping the food and restaurant industry for some time in

response to consumer calorie counting. For example, T.G.I. Friday's and the Cheesecake Factory

unveiled half-sized menu options in 2007. Also, smaller bottles of highly concentrated products,

such as energy drinks, are on the rise, especially in the US (see Beverage Packaging Trends – US,

February 2010). This has led to Coke releasing a mini 7.5oz can in the US in 2010.

http://tgifridays.com/home/welcome.aspx

http://cheesecakefactory.com/



Consumer Occasions for Carbonated Soft Drinks Usage Carbonated Soft Drinks UK, June 2011


Consumer Occasions for Carbonated Soft Drinks

Usage

Key points

Carbonated soft drinks are more than twice as likely to be drunk in home than other

occasions, with just under nine in ten doing so.

This means that brands are hugely reliant on the supermarket channel, which can be a

restriction on brand control but also a benefit when in times of austerity people turn to this

channel for value.

A challenge for the market going forward is to get more people – especially younger adults –

drinking the product on the go, something that bottled water has done so successfully.

Carbonated soft drinks remain largely for in-home consumption

Mintel’s research shows that almost nine in ten of drinkers buy carbonated soft drinks for in-home

consumption, a reflection of the dominance of sales through the supermarket channel, and how the

product is a staple item for the weekly shop.

This strong in-home consumption bias has been a real benefit to the category throughout the

economic downturn as more people have been spending time at home in order to save money. For

example, Mintel’s report Home Lifestyles – UK, September 2010 found that four in ten adults (19.5

million) were spending more of their spare time at home than a couple of years ago.

The report found that most of this extra time spent at home is being taken up watching TV,

highlighting the importance of not only promoting drinking on this particular occasion but also the

potential for utilising this medium in targeting consumers.

The popularity of in-home consumption also reflects that carbonated soft drinks are a product

which tends to be drunk by the whole family, and something which people like to drink with

meals, and is also – unlike energy drinks – associated with everyday and relaxing occasions.

CCE has identified ‘meal occasions’ as a key part of its growth strategy among existing drinkers,

and is cross-selling the brand with food brands such as El Paso, as part of a take-home meal deal.

Coca-Cola also launched a limited edition cookery book in partnership with Harvey Nichols and

aims to highlight Coca-Cola's association with food and family occasions over the past 100 years.

Key analysis: While such prevalent in-home consumption is undoubtedly a benefit as it provides

many occasions for usage such as mealtimes, watching TV and ‘snacking’ occasions, the downside

is that it can act as a barrier to premiumisation of the category, placing it too firmly within the

commoditised FMCG market.

With rising prices such an issue for manufacturers of carbonated soft drinks and premiumisation

increasingly an opportunity as the population looks for good-quality alternatives to alcohol, the

industry can benefit from seeking ways of expanding into outdoor occasions for usage. Indeed,

Mintel’s research shows that the brand equity which the category has built up means that people are

prepared to pay more for brands than supermarkets are necessarily allowing for (see Consumer

Attitudes towards Carbonated Soft Drinks).



Mintel Inspire’s trend Transumers explores how people in the UK are increasingly spending more

time out of home during the week. For example, British workers work among the longest hours in

Europe and the average worker also spends up to 78 minutes commuting every day according to

2009 research by the Trades Union Congress – making it one of the most arduous commutes in

Europe. There are therefore opportunities to push smaller, more portable formats for people to

drink on the train or take for their lunch.

“Thinking about carbonated soft drinks, over the past year, which of these occasions, if any, have you purchased them for?”

FIGURE 56: OCCASIONS PEOPLE BUY CARBONATED SOFT DRINKS FOR, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months


Expanding their focus more towards out-of-home occasions…

Only two in five drinkers of carbonated soft drinks consume the product when on the go/for

outdoor occasions. This is in contrast to bottled water, which sees an uptake for on-the-go

occasions, mainly because it is seen by consumers as a key way to remain hydrated while on the

go throughout a busy day (see Bottled Water – UK, May 2011).



FIGURE 57: OCCASIONS PEOPLE BUY CARBONATED SOFT DRINKS FOR COMPARED TO OCCASIONS THAT PEOPLE BUY BOTTLED

WATER FOR, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months

Note that the questions were asked on separate surveys (both Toluna, online) and the wording differed slightly in places. Nevertheless, the occasions match closely enough to allow a broad comparison


Key analysis: That bottled water is seen as a key source of hydration is based on the commonly

misunderstood idea that hydration depends on drinking 1.5 litres per day of water. In fact, the

British Dietetic Association (BDA) makes clear that this includes any non-alcoholic fluids including

caffeine-based drinks such as coffee and tea. Communicating this subtle distinction to consumers

could pave the way for communicating carbonated soft drinks as a ‘more fun’ means of hydration.

Another area in which carbonated soft drinks can look to expand usage is in the workplace. This is

an area which Diet Coke has previously targeted with its ‘Diet Coke moment’ advertising

campaign.

Key analysis: That soft drinks have positioned themselves as a fun and indulgent treat – and that

low-calorie versions are proving so successful – means there is scope for similar campaigns,

stressing how drinking carbonated soft drinks can provide a fun way to break up the working day.

There are also opportunities to increase vending machine access in work domains and provide

branded refrigerators and free delivery of stock to companies.



…particularly when targeting young drinkers

Those aged 16-24 are much more likely to drink carbonated soft drinks on the go than older

drinkers and need to be targeted accordingly in terms of packaging, distribution and marketing.

The younger generation have always been more active, but Mintel Inspire’s FSTR & HYPR trend

explores how “the advent and mass adoption of the internet and mobile technology has kicked the

speed of life into overdrive”.

There is opportunity to use this technology to target younger consumers who are increasingly

using their iPhones on the move: this could come in the form of QR codes on cans or advertising,

apps focusing on locating special edition cans, etc.

FIGURE 58: OCCASIONS PEOPLE BUY CARBONATED SOFT DRINKS FOR – 16-24-YEAR-OLDS VERSUS ALL DRINKERS, APRIL

2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months


Consumer Attitudes towards Carbonated Soft Drinks Carbonated Soft Drinks UK, June 2011


Consumer Attitudes towards Carbonated Soft Drinks

Key points

While drinkers of carbonated soft drinks seem unbothered whether the product is

unhealthy, they are increasingly intolerant of high calorie content.

This is a market where people place huge trust in big, well-established brands rather than

niche brands, which suggests that brand extensions are the way to maximise revenues.

The research confirms that consumers like the combination of fizzy carbonates being cheap

and an indulgence. In fact young drinkers particularly revel in the fact that it is ‘one of life’s

guilty pleasures’.

Younger drinkers crave more variety and brand choice, and many in Mintel’s focus group

felt that the current high level of choice in the market was more a case of quantity rather

than quality.

Premium soft drinks can tap into these consumers as they are driving both flavour and

brand innovation albeit with a much smaller distribution network and marketing support.

Consumers increasingly care about the calories they consume

Mintel’s attitudinal research shows that, while drinkers of carbonated soft drinks are increasingly

concerned about the adverse effects of their calorific content, they are not unduly concerned about

the product being unhealthy beyond that, ie artificial ingredients/sweeteners.



FIGURE 59: ATTITUDES TOWARDS CARBONATED SOFT DRINKS NOW COMPARED TO A YEAR AGO, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months


For example, when asked if they are more likely to look for healthier drinks, regardless of calories,

people are as likely to agree as disagree. As one member of the online focus group put it:

“I do not really consider my health while drinking them as I am quite a healthy person in

general so a little bad thing now and then is not too bad.”


However, in contrast, almost half (45%) of drinkers of carbonated soft drinks are more likely to

consider drinking no/low-calorie soft drinks than a year ago.

Awareness of the calorific properties of carbonated soft drinks is particularly prevalent among

women, and indicates that they are prepared to pay more for better-quality and healthier variants

than men for whom value and branding remain paramount.



FIGURE 60: ATTITUDES TOWARDS CARBONATED SOFT DRINKS NOW COMPARED TO A YEAR AGO, BY GENDER, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months


Consumers put their trust in the big brands

Almost half (47%) of drinkers of carbonated soft drinks favour buying brands they trust/ are well-

known rather than small, new or less well-known brands.

This explains why Coca-Cola has performed well (see Market Share) and why the niche premium

soft drink brands (such as Bottlegreen) have failed to grow their sales as quickly as might have

been expected, given the huge potential for better-quality soft drinks, particularly in the on-trade

where consumer research shows there is huge demand for a superior offering (see On-Trade Soft

Drinks – UK, December 2009).

Key analysis: This brand equity should be protecting the big brands from having to over-discount,

with this purchase driver being less important to consumers than brand awareness. It should to an

extent immunise Coca-Cola and Pepsi from the recent large price increases they have pushed

through as they seek to cover rising costs. However, the reliance of the category on the price-

sensitive supermarket channel means that they are arguably not maximising their value given their

high investment in above-the-line branding. Trust in big brands also makes brand extensions a

more viable option than creating new products.



Being cheap and a treat makes carbonates a compelling proposition

Over half (55%) of drinkers of carbonated soft drinks believe they provide indulgence and

escapism but at a price point that means they do not have to worry about over-spending.

The results also show how few (25%) actively try to avoid or cut back on their consumption of

carbonated soft drinks because they are unhealthy.

Key analysis: This supports the hypothesis that while people were becoming increasingly health-

aware in the early part of the 2000s and this was having an adverse effect on the carbonated soft

drinks category, the economic downturn has relegated this concern to secondary status. People’s

primary concern when purchasing them now is that they are affordable, fun and low in calories.

Worries about artificial ingredients no longer seem proportionately relevant to drinkers.

“Thinking about your carbonated soft drink consumption now compared to a year ago, to what extent do you agree or disagree with the following statements?”

FIGURE 61: GENERAL ATTITUDES TOWARDS CARBONATED SOFT DRINKS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months Any agree

%

They are an affordable treat 55 I drink a variety of different brands 49 I like to drink a variety of flavours 47 I almost always opt for low or no-calorie/diet options 46 They are one of life’s guilty pleasures 42 They are good for you in moderation 39 I always buy the same brand 35 They are good value 33 Own-label is as good as branded 26 I am prepared to pay more for better-quality carbonated soft drinks ie those made with natural ingredients and sold in stylish, glass bottles

25

I try to avoid them because they are unhealthy 25 SOURCE: TOLUNA/MINTEL

Young drinkers love the fact that carbonates are a ‘guilty pleasure’

Over half (53%) of 16-34-year-olds describe carbonated soft drinks as ‘one of life’s guilty

pleasures’ compared to just 36% of over-35s. Mintel Inspire’s trend Supernanny State looks at

how increasingly we are being cajoled into being healthy by a combination of state legislation and

media hype.

Brands that target young consumers can deliberately counter this trend by ‘playing up’ to their

guilty aspects. For example, energy drink brands such as Monster and Relentless have done very

well by advertising themselves in an edgy fashion and this combined with the adverse publicity the

category has received seems to have, if anything, boosted the category’s credentials in the eyes of

younger male consumers.

It is also noticeable how over-35s are significantly more likely to opt for low-calorie versions. This

suggests the trend towards calorie counting increases as people get older and are less active and

also less able to get away with an unhealthy diet without putting on weight.



“I don‟t consider my health, as I try to stay as active and fit as I can, so the sugars do not

concern me.”


FIGURE 62: NET AGREEMENT IN GENERAL ATTITUDES TOWARDS CARBONATED SOFT DRINKS – 16-34-YEAR-OLDS VERSUS

OVER-35S*, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months

* net difference means the % agreement of 16-34-year-olds minus that of over-35s for each attitudinal statement. Hence, 53% of 16-34-year-olds believe that carbonated soft drinks are one of life’s guilty pleasures compared to 36% of over-35s


Variety keeps young drinkers interested…

While there is a degree of brand loyalty among 16-34-year-olds, what they want most – aside from

value and indulgence – is variety. This suggests that brands can and should utilise special edition

flavours and bottles more than they are currently doing, apart from Diet Coke which has recently

embraced the concept by collaborating with the fashion designer Karl Lagerfeld and Sex and the

City stylist Patricia Field to come up with trendy limited edition bottle designs.

This is a concept which premium spirits have long used as both a marketing tool and a means of

making their brand feel relevant and special.



However, respondents in the focus group felt that at times there was also too much choice, which

made opting for what to drink very confusing, and was often reflective of quantity over quality:

“There's plenty of variety even beyond the brand name drinks, the issue is quality rather than

variety as numerous brands lack flavour becoming little more than carbonated water with a

little concentrate in it.”


“I think there‟s too much choice, it‟s hard enough trying to find a drink that you like from the

amount already available.”


…and is a key appeal of premium soft drinks

Those who have drunk premium soft drinks ((ie those that are slightly more expensive and are

only available in glass bottles such as Shloer, Peartiser, Fentimans Ginger Beer) are more

interested in variety of flavours and brands than drinkers of carbonated soft drinks per se.

It stands to reason that naturally more adventurous consumers would be attracted to trying

premium soft drinks above and beyond the usual carbonated variants. These drinks have provided

radically different flavours and taste profile to the traditional value market, with flavours such as

elderflower, pomegranate and lemongrass. They have also provided interesting, niche brands such

as Fentimans and Bottlegreen.



FIGURE 63: GENERAL ATTITUDES TOWARDS CARBONATED SOFT DRINKS – ALL DRINKERS VERSUS PREMIUM DRINKERS, APRIL

2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months




Appendix – Internal Market Environment Carbonated Soft Drinks UK, June 2011


Appendix – Internal Market Environment FIGURE 64: WHAT EXTRA MONEY IS SPENT ON, SELECTED STATEMENTS, BY DEMOGRAPHICS, MAY 2011 Base: 2,000 internet users aged 16+ Dining out Going out (eg pub,

cinema etc) Food/drink at home

for a ‘special’ occasion

Sweets/ chocolate etc

% % % %

All 33 31 22 19 Gender: Male 34 36 19 17 Female 32 26 24 21 Age: 16-24 40 51 26 31 25-34 36 35 23 21 35-44 31 26 22 16 45-54 25 23 18 17 55-64 34 28 23 13 65+ 34 15 15 10 Region: Inner and Greater London 41 34 22 21 South East/East Anglia 33 31 23 19 South West and Wales 36 31 23 21 East and West Midlands 28 30 20 14 North West 35 31 25 23 Yorks, Humberside 28 29 23 19 North and Scotland 29 28 16 16 Working status: Employee full-time (30+ hours/week)

35 32 21 18

Employee part-time (less than 30 hours/week)

31 29 23 23

Any self-employed 39 25 24 14 In full-time education 35 52 26 31 Retired 34 20 16 12 Not working for any other reason 22 25 23 20 Socio-economic group: ABC1 37 33 23 19 AB 39 32 24 17 C1 35 35 22 21 C2DE 27 27 19 18 C2 30 29 20 17 D 25 27 19 22 E 19 18 17 14 DE 24 25 19 20 Daily newspaper readership: Broadsheet readers 39 37 25 19 Mid-market tabloid readers 36 31 25 21 Popular tabloid readers 32 31 20 22 None of these 32 28 21 18



Sunday newspaper readership: Broadsheet readers 39 35 26 20 Mid-market tabloid readers 34 32 25 20 Popular tabloid readers 34 31 20 21 None of these 32 29 20 18 Gross annual household income:

Under £9,500 22 32 16 17 £9,500-15,499 22 20 17 17 £15,500-24,999 31 26 22 19 £25,000-49,999 36 34 23 19 £50,000 or over 50 37 27 18 Don't know/refused 29 33 19 23 Presence of own children: Aged 0-4 35 22 25 18 Aged 5-9 33 22 21 21 Aged 10-15 29 26 23 18 Any children 32 24 23 20 No children in household 34 34 21 19 Household size: 1 25 29 15 14 2 34 28 23 17 3 38 34 25 21 4 34 34 23 21 5 or more 30 30 20 27 Current marital status: Single 32 43 22 25 Married/civil partnership/living as married

36 26 23 17

Separated, divorced or widowed 26 23 17 16 Daily personal internet usage: Up to three hours 33 29 21 17 4-6 hours 33 35 22 22 7+ hours 35 30 22 22 Grocery stores used: Asda 34 32 22 22 Co-op 34 36 27 20 Marks & Spencer 46 36 31 25 Morrisons 36 30 25 22 Sainsbury's 37 32 25 22 Tesco 34 31 23 20 Waitrose 45 38 34 22 Discounter eg Aldi, Lidl, Netto etc 29 27 22 20 Other 24 32 27 24 Personal mobile phone network provider:

O2 38 33 25 22 Orange 35 37 20 19 Vodafone 26 28 20 15 T-Mobile 26 27 23 19 Virgin Mobile 36 28 21 19 Three 37 34 22 20 Other (eg Tesco) 35 19 21 16



TV reception: I have digital satellite (BSkyB) 35 30 21 18 I have digital cable (Virgin Media) 34 31 25 20 Freeview digital box/TV 33 33 23 21 Other digital TV service (eg free-to-view digital satellite, BT Vision, HomeChoice)

35 32 22 18

Analogue cable/Terrestrial TV only

38 30 21 18

SOURCE: GMI/MINTEL



Appendix – Broader Market Environment Carbonated Soft Drinks UK, June 2011


Appendix – Broader Market Environment FIGURE 65: GDP, PDI, CONSUMER EXPENDITURE AND SAVINGS, AT CONSTANT 2006 PRICES, 2006-16 GDP PDI Consumer expenditure Savings Savings ratio £bn £bn £bn £bn %

2006 1,328 853 820 33 3.9 2007 1,364 857 837 19 2.2 2008 1,363 866 842 24 2.8 2009 1,297 876 815 62 7.0 2010 1,313 870 821 48 5.6 2011 (est) 1,333 861 826 35 4.0 2012 (proj) 1,362 868 839 29 3.4 2013 (proj) 1,395 882 855 27 3.1 2014 (proj) 1,429 898 870 28 3.1 2015 (proj) 1,465 913 886 27 3.0 2016 (proj) 1,502 929 902 27 2.9 % change 2006-11 +0.3 +0.9 +0.8 +3.4 -0.1 % change 2011-16 +12.7 +7.9 +9.2 -22.3 +1.1 SOURCE: MINTEL/OFFICE FOR NATIONAL STATISTICS/HM TREASURY

FIGURE 66: TRENDS IN THE AGE STRUCTURE OF THE UK POPULATION, 2006-16 2006 2011 (proj) 2016 (proj) % change % change 000s % 000s % 000s % 2006-11 2011-16

0-4 3,496 5.8 3,883 6.2 3,898 6.0 +11.1 +0.4 5-9 3,490 5.8 3,508 5.6 3,892 6.0 +0.5 +10.9 10-14 3,751 6.2 3,500 5.6 3,515 5.4 -6.7 +0.4 15-19 3,996 6.6 3,832 6.1 3,571 5.5 -4.1 -6.8 20-24 4,024 6.6 4,359 7.0 4,182 6.5 +8.3 -4.0 25-34 7,897 13.0 8,385 13.4 9,257 14.3 +6.2 +10.4 35-44 9,262 15.3 8,660 13.8 8,081 12.5 -6.5 -6.7 45-54 7,834 12.9 8,705 13.9 9,095 14.0 +11.1 +4.5 55-64 7,150 11.8 7,330 11.7 7,428 11.5 +2.5 +1.3 65-74 4,971 8.2 5,501 8.8 6,344 9.8 +10.7 +15.3 75-84 3,440 5.7 3,540 5.7 3,829 5.9 +2.9 +8.2 85+ 1,276 2.1 1,446 2.3 1,681 2.6 +13.3 +16.3 Total 60,588 100.0 62,649 100.0 64,773 100.0 +3.4 +3.4

SOURCE: OFFICE FOR NATIONAL STATISTICS/GAD/MINTEL

Appendix – Broader Market Environment Carbonated Soft Drinks UK, June 2011


Appendix – Competitive Context Carbonated Soft Drinks UK, June 2011


Appendix – Competitive Context FIGURE 67: DRINK TYPES CONSUMED IN THE PAST 12 MONTHS, BY DEMOGRAPHICS, 2010 Base: adults aged 15+ Any Fizzy soft drinks (including

colas) Fizzy soft drinks (excluding colas)

Colas Energy drinks

% % % % %

All 96 73 58 55 31 Gender: Men 96 75 61 58 39 Women 97 70 55 51 24 Age group: 15-24 98 90 80 74 66 25-34 98 87 70 73 47 35-44 98 82 63 67 31 45-54 97 72 56 55 26 55-64 95 62 44 42 14 65+ 92 47 36 23 9 Socio-economic group: AB 97 70 54 54 27 C1 97 74 59 56 34 C2 96 73 59 56 32 D 95 75 61 55 33 E 93 69 56 48 32 Presence of children: Under 1 year 99 85 67 74 39 1-4 years 98 85 68 69 41 5-9 years 98 84 66 67 38 10-15 years 98 82 68 65 40 No children in household 95 67 53 48 27 Marital status: Single 97 82 71 66 51 Married/living as married 97 73 56 55 27 Separated/divorced/widowed 93 54 41 34 17 Working status: Full-time 98 81 65 66 39 Part-time 97 75 60 59 30 Not working 95 66 52 45 27 Household size: 1 person 93 56 44 37 20 2 persons 96 67 52 47 24 3 persons 98 80 65 63 39 4 persons 99 83 65 69 39 5 persons+ 96 84 71 65 45



Region: Greater London 96 75 58 59 36 South East/East Anglia 97 73 57 56 29 South West 97 67 53 46 29 Wales 95 70 55 49 31 East and West Midlands 96 73 60 53 29 North West 96 70 57 52 30 Yorkshire and Humberside 96 73 61 53 36 North 95 74 56 57 34 Scotland 96 77 62 62 33 Lifestage: Pre-/no family 98 87 74 72 55 Families 99 83 66 68 36 Third age 96 65 48 46 18 Retired 92 47 36 23 9 Special Groups: ABC1 pre-/no family 98 87 73 72 54 ABC1 family 99 82 64 68 33 ABC1 third age 97 63 46 46 17 ABC1 retired 93 47 35 24 8 Two full-time earners 98 81 64 67 38 One-person households under 65 95 69 53 51 30 Body mass index: Underweight 97 78 66 61 48 Normal 96 70 56 52 34 Overweight 96 72 57 54 30 Obese 98 80 61 61 28 Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL



FIGURE 68: DRINK TYPES CONSUMED IN THE PAST 12 MONTHS, BY DEMOGRAPHICS, 2010 Base: adults aged 15+ Fruit

squashes/ cordials

Ready-to-drink fruit/ vegetables

drinks/ smoothies

Bottled mineral water

Flavoured water,

herbal and premium

soft drinks

Fizzy minerals as mixers for alcoholic

drinks % % % % %




Region: Greater London 56 56 62 20 25 South East/East Anglia 66 52 51 21 33 South West 67 51 47 19 30 Wales 67 42 43 21 29 East and West Midlands 70 45 47 21 29 North West 65 46 49 23 33 Yorkshire and Humberside 66 43 46 21 33 North 60 40 44 22 30 Scotland 58 43 51 23 30 Lifestage: Pre-/no family 69 51 58 26 27 Families 73 51 55 23 26 Third age 59 45 47 20 34 Retired 52 42 36 13 37 Special Groups: ABC1 pre-/no family 70 56 63 27 29 ABC1 family 70 57 60 22 29 ABC1 third age 57 53 55 20 39 ABC1 retired 50 48 40 13 41 Two full-time earners 69 50 58 21 32 One-person households under 65 59 46 44 20 27 Body mass index: Underweight 59 52 52 22 26 Normal 63 52 51 21 29 Overweight 65 46 50 20 31 Obese 68 43 49 24 32 Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL

Appendix – Brand Research Carbonated Soft Drinks UK, June 2011


Appendix – Brand Research

“Which single statement best describes your use of each of these FIZZY DRINK brands?”

FIGURE 69: BRAND USAGE, MARCH 2011

Base: 1,023 internet users aged 16+ Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer

% % % % % % %

Never drunk, and never heard of it

1 1 7 1 4 2 16

Never drunk, but have heard of it

11 13 37 17 39 19 30

Rarely 28 38 36 44 33 44 32 Sometimes 29 28 13 28 17 25 16 Often 22 17 5 10 6 9 5 All the time 9 4 2 1 2 1 1 Ever drunk 89 86 57 82 58 79 54 Awareness 100 99 94 99 96 98 84 SOURCE: GMI/MINTEL

“Which single statement best describes your intentions towards each of these FIZZY DRINK brands?”

FIGURE 70: BRAND COMMITMENT, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer

Base: internet users aged 16+ who have heard of a brand and expressed an opinion

1,018 1,015 956 1,012 985 1,000 857

% % % % % % %

I would never consider drinking this brand

10 12 25 9 27 8 13

I would only consider drinking this brand if I had no other option

13 22 25 19 22 20 22

I have no preference for this brand over others

32 37 37 45 34 45 46

I prefer this brand over others 31 24 10 23 14 23 16 This is a favourite brand 14 6 4 4 3 4 3 Committed 45 30 14 27 17 27 19 SOURCE: GMI/MINTEL



“How well do you think the following FIZZY DRINK brands are doing?”

FIGURE 71: BRAND MOMENTUM, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer


1,018 1,015 956 1,012 985 1,000 857

% % % % % % %

Falling behind 5 14 32 20 28 15 20 1 – falling behind 1 2 6 3 5 2 4 2 4 12 26 17 23 13 16 3 – standing still 36 44 46 50 48 53 50 Surging forward 59 41 22 31 24 32 30 4 38 31 17 25 20 27 24 5 – surging forwards 21 10 5 6 4 6 7 SOURCE: GMI/MINTEL

“Which single statement best describes how well you think each FIZZY DRINK brand stands out from others?”

FIGURE 72: BRAND DIVERSITY, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer


1,018 1,015 956 1,012 985 1,000 857

% % % % % % %

Not diverse 13 20 27 26 29 25 27 It’s the sort of brand that you don’t notice and it doesn’t

1 2 6 4 6 4 7

It’s much the same as most brands and doesn’t stand out much

12 18 21 22 23 22 20

It isn’t very different from other brands but it does stand

27 36 29 40 32 40 33

Diverse 60 44 43 34 39 35 40 It stands out as being somewhat different from other brands

35 33 30 27 29 25 29

It’s a unique brand which really stands out from other brand

25 11 14 7 11 10 11

SOURCE: GMI/MINTEL



“ How would you rate your overall satisfaction with the following FIZZY DRINK brands?”

FIGURE 73: BRAND SATISFACTION, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer

Base: internet users aged 16+ who have drunk a brand and expressed an opinion

908 878 578 841 588 804 549

% % % % % % %

Negative endorsement 7 11 16 10 16 6 8 Unsatisfactory 2 2 3 1 4 1 1 Poor 4 9 14 8 12 5 8 Average 26 35 42 37 39 36 33 Positive endorsement 68 54 42 53 45 58 59 Good 42 40 29 43 32 43 42 Excellent 26 14 13 10 13 15 16 SOURCE: GMI/MINTEL

“How likely are you to recommend the following FIZZY DRINK brands to colleagues or friends?”

FIGURE 74: BRAND RECOMMENDATION, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer

Base: internet users aged 16+ who have drunk a brand and expressed an opinion

908 878 578 841 588 804 549

% % % % % % %

Detractors 37 49 56 47 52 45 41 Passives 20 23 21 26 25 26 29 Promoters 43 29 23 27 23 29 30 Net Promoter Score 6 -20 -33 -21 -29 -16 -11 SOURCE: GMI/MINTEL



“Choose all FIZZY DRINK brands you associate with each statement.”

FIGURE 75: BRAND ATTITUDE, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer


1,018 1,015 956 1,012 985 1,000 857

% % % % % % %

A brand that I trust 47 34 23 32 20 41 30 A brand that cares for the environment

20 16 10 12 8 14 12

A brand that has consistently high quality

58 39 24 34 25 46 35

A brand that has a good reputation

59 44 26 35 24 51 33

A brand that is socially responsible

27 20 13 15 11 17 16

A brand that is innovative 39 21 17 17 14 18 23 A brand that offers good value 34 27 19 26 14 21 15 A brand that is worth paying more for

28 15 9 12 9 18 17

A brand that I am proud to be associated with

36 23 15 18 13 23 18

A brand that expresses my personality

25 15 10 14 11 17 15

SOURCE: GMI/MINTEL

“From the pairs below, please choose the word from each pair that matches your image of each FIZZY DRINK brand.”

FIGURE 76: BRAND IMAGE – MACRO IMAGE, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer


1,018 1,015 956 1,012 985 1,000 857

% % % % % % %

Boring 11 16 20 12 18 16 11 Fun 57 44 37 48 34 31 37 Tired 14 18 21 15 19 16 10 Vibrant 50 40 30 41 29 32 34 Exclusive 6 3 8 3 6 11 12 Accessible 66 60 41 55 42 51 40 Unappealing 10 17 24 12 22 10 11 Engaging 48 36 26 35 25 34 32 Unethical 13 10 8 5 8 5 4 Ethical 28 25 17 23 18 24 23 SOURCE: GMI/MINTEL



“Now, from the list below, please select all words that describe your image of each FIZZY DRINK brand.”

FIGURE 77: BRAND IMAGE – MICRO IMAGE, MARCH 2011 Coca-Cola Pepsi Irn-Bru Fanta Dr Pepper Schweppes Shloer


1,018 1,015 956 1,012 985 1,000 857

% % % % % % %

Authentic 32 20 18 14 16 25 14 Cool 29 22 13 21 14 15 12 Genuine 36 26 19 20 16 29 20 Healthy 4 3 4 4 3 8 15 Inspiring 8 7 6 6 5 5 7 Natural 4 3 4 4 3 8 12 Nostalgic 21 14 19 11 12 22 6 Reassuring 9 8 6 6 4 13 9 Refreshing 37 30 22 38 20 38 37 Special 11 7 10 6 9 11 16 Stylish 13 9 7 8 8 12 15 Youthful 22 19 13 19 15 4 8 Delicious 23 17 13 21 14 17 22 Indulgent 12 10 7 8 7 8 14 Unhealthy 31 31 27 24 27 9 6 None of these 11 18 29 20 30 22 32 SOURCE: GMI/MINTEL



FIGURE 78: PROFILE OF TARGET GROUPS, BY DEMOGRAPHICS, MARCH 2011

All Conformists Simply the

best Shelf

stalker Habitual

shoppers Individualist

Base: internet users aged 16+

1,023 124 173 320 257 149

% % % % % %

All 100 12 17 31 25 15 Gender: Male 51 52 56 52 57 34 Female 49 48 44 48 43 66 Age: 16-24 19 26 20 8 27 20 25-34 18 17 19 13 26 17 35-44 22 23 23 21 22 26 45-54 18 15 14 25 13 18 55+ 23 19 25 33 13 20 Age and Gender: Men 16-24 10 14 13 4 13 7 Men 25-34 10 10 10 6 16 5 Men 35-44 11 11 12 11 14 8 Men 45-54 9 7 8 13 9 4 Men 55+ 12 11 13 18 6 10 Women 16-24 9 12 6 4 14 12 Women 25-34 9 7 9 7 11 12 Women 35-44 11 12 11 10 8 17 Women 45-54 9 8 6 12 4 14 Women 55+ 11 9 12 15 7 10 Region:

Inner and Greater London 14 16 20 8 18 11 South East/East Anglia 25 29 20 28 23 21 South West and Wales 14 10 12 15 14 16 East and West Midlands 16 11 19 17 16 15 North West 11 11 10 11 9 12 Yorks, Humberside 8 7 9 9 5 10 North and Scotland 13 16 10 12 14 15 Area: Inner city/town 27 26 30 19 37 28 Town/city outskirts 54 59 54 58 46 56 Rural area 19 15 17 23 17 15 Socio-economic group: ABC1 62 69 64 58 62 62 AB 31 31 39 31 31 22 C1 31 38 25 28 31 40 C2DE 38 32 36 42 38 38 C2 20 14 24 20 20 20 D 13 11 8 15 13 15 E 5 7 4 6 5 3 SOURCE: GMI/MINTEL



FIGURE 79: PSYCHOGRAPHIC SEGMENTATION, BY TARGET GROUPS, MARCH 2011 All Conformists Simply the

best Shelf

stalker Habitual



1,023 124 173 320 257 149

% % % % % %

I consider all available options before deciding what product to buy:

Any agree 75 73 62 84 69 81 Neither agree nor disagree 20 22 21 13 29 15 Any disagree 6 5 16 4 2 4 I often buy things on the spur of the moment:

Any agree 46 36 63 32 51 56 Neither agree nor disagree 32 29 22 33 40 26 Any disagree 23 35 15 35 10 17 I tend to make purchase decisions quickly, based on 'gut feeling':

Any agree 44 31 50 35 57 49 Neither agree nor disagree 32 33 27 31 37 30 Any disagree 24 36 23 34 7 22 I only buy brands I have bought before:

Any agree 16 8 9 6 45 1 Neither agree nor disagree 33 32 24 32 50 15 Any disagree 52 60 67 62 5 84 I like to try new brands that I see:

Any agree 60 36 67 59 59 75 Neither agree nor disagree 32 44 24 32 37 20 Any disagree 8 21 9 8 4 5 I want to stand out from the crowd:

Any agree 29 15 42 8 41 51 Neither agree nor disagree 33 32 34 27 44 29 Any disagree 38 53 25 65 15 20 I like people to admire things I own:

Any agree 40 57 61 3 51 60 Neither agree nor disagree 34 32 31 34 42 29 Any disagree 26 12 8 63 7 11 I do my own thing, regardless of the current trends:

Any agree 81 62 77 94 72 87 Neither agree nor disagree 15 27 16 3 25 11 Any disagree 4 11 7 3 3 2



I don’t like to be too different from everyone else:

Any agree 30 57 27 16 48 12 Neither agree nor disagree 35 27 38 37 42 22 Any disagree 35 16 36 47 10 66 I like to have new products ahead of everybody else:

Any agree 30 18 48 7 46 40 Neither agree nor disagree 33 33 30 29 39 32 Any disagree 38 49 23 64 15 28 I shop around from a variety of brands:

Any agree 81 78 75 87 72 95 Neither agree nor disagree 16 18 18 10 27 4 Any disagree 3 4 7 4 1 1 Once I find a brand I like I tend to stick to it:

Any agree 53 78 67 48 62 14 Neither agree nor disagree 34 21 27 38 35 44 Any disagree 12 1 7 13 3 42 I look for the lowest possible prices when I go shopping:

Any agree 63 86 16 65 68 83 Neither agree nor disagree 26 13 41 27 28 14 Any disagree 11 1 43 8 4 3 I always look out for special offers:

Any agree 86 98 76 90 77 98 Neither agree nor disagree 11 2 17 8 19 2 Any disagree 3 - 7 3 4 0 I am happy to pay extra for better quality:

Any agree 64 61 90 69 52 46 Neither agree nor disagree 27 27 8 26 37 31 Any disagree 10 13 2 5 11 23 I tend to go for premium rather than standard goods/services:

Any agree 33 11 68 23 38 23 Neither agree nor disagree 42 36 25 47 49 41 Any disagree 26 54 7 30 13 36 I feel more comfortable buying branded products than a shop's own-label:

Any agree 38 27 69 24 49 18 Neither agree nor disagree 35 28 21 41 41 33 Any disagree 28 45 10 35 11 49



I seek other people’s opinions before choosing a product:

Any agree 28 40 19 22 42 15 Neither agree nor disagree 35 34 34 32 45 26 Any disagree 37 26 47 46 13 59 I always buy the brands I think my family/ friends would approve of:

Any agree 23 17 16 10 49 16 Neither agree nor disagree 32 35 34 22 42 32 Any disagree 45 48 50 68 9 52 SOURCE: GMI/MINTEL

FIGURE 80: BRAND USAGE, BY TARGET GROUPS, MARCH 2011 All Conformists Simply the

best Shelf

stalker Habitual



1,023 124 173 320 257 149

% % % % % %

Coca-Cola: Never drunk, and never heard of it

1 - - - 1 1


11 15 5 13 12 8

Rarely 28 24 27 37 21 29 Sometimes 29 29 29 29 26 32 Often 22 19 24 15 32 23 All the time 9 13 16 7 8 7 Ever drunk 89 85 95 88 87 91 Awareness 100 100 100 100 99 99 Pepsi: Never drunk, and never heard of it

1 - 1 - 2 1


13 19 11 14 12 12

Rarely 38 32 44 45 28 37 Sometimes 28 30 22 24 34 32 Often 17 16 19 12 21 17 All the time 4 3 4 4 4 1 Ever drunk 86 81 88 85 87 87 Awareness 99 100 99 100 98 99 Irn-Bru: Never drunk, and never heard of it

7 7 6 5 9 5


37 48 36 41 30 34

Rarely 36 29 32 38 36 42 Sometimes 13 11 19 10 16 13 Often 5 6 5 4 7 4 All the time 2 1 2 2 2 1 Ever drunk 57 46 58 54 61 60 Awareness 94 94 94 95 91 95



Fanta: Never drunk, and never heard of it

1 - 2 1 2 1


17 14 11 22 15 18

Rarely 44 48 47 47 36 41 Sometimes 28 27 23 26 32 30 Often 10 11 13 4 13 9 All the time 1 - 4 1 1 1 Ever drunk 82 86 87 78 83 81 Awareness 99 100 98 99 98 99 Dr Pepper: Never drunk, and never heard of it

4 2 4 3 6 4


39 46 36 44 32 38

Rarely 33 27 38 34 31 36 Sometimes 17 18 14 15 21 14 Often 6 7 5 4 8 6 All the time 2 1 4 2 2 2 Ever drunk 58 52 60 54 62 58 Awareness 96 98 97 98 94 96 Schweppes: Never drunk, and never heard of it

2 2 3 1 4 1


19 20 14 20 22 17

Rarely 44 51 44 44 36 50 Sometimes 25 21 23 27 27 20 Often 9 6 13 7 10 9 All the time 1 1 3 1 1 1 Ever drunk 79 78 83 79 74 81 Awareness 98 98 97 99 96 99 Shloer: Never drunk, and never heard of it

16 19 17 14 20 12


30 30 30 34 28 27

Rarely 32 31 28 32 31 40 Sometimes 16 18 16 17 16 15 Often 5 3 8 3 6 5 All the time 1 - 1 - - 1 Ever drunk 54 52 53 52 53 61 Awareness 84 82 83 86 81 88 SOURCE: GMI/MINTEL



FIGURE 81: BRAND INDEX, MARCH 2011

Base: 1,023 internet users aged 16+ Mean

Coca-Cola 63.3 Pepsi 54.4 Irn-Bru 42.5 Fanta 50.8 Dr Pepper 43.3 Schweppes 51.8 Shloer 41.0 SOURCE: GMI/MINTEL



Appendix – Consumer Usage Carbonated Soft Drinks UK, June 2011


Appendix – Consumer Usage FIGURE 82: FREQUENCY OF DRINKING COLAS, BY DEMOGRAPHICS, 2010 Base: adults aged 15+ who drink colas All users Heavy users –

Once a day or more

Medium users – 2 or 3 times

a week

Light users – once a week

or less*

Non-users

% % % % %




Region: Greater London 59 19 25 56 41 South East/East Anglia 56 18 23 59 44 South West 46 17 19 64 54 Wales 49 18 33 49 51 East and West Midlands 53 20 26 54 47 North West 52 22 22 56 48 Yorkshire and Humberside 53 18 23 59 47 North 57 20 28 52 43 Scotland 62 24 24 52 38 Lifestage: Pre-/no family 72 22 27 51 28 Families 68 20 24 56 32 Third age 46 18 21 60 54 Retired 23 11 18 70 77 Special Groups: ABC1 pre-/no family 72 19 25 55 28 ABC1 family 68 16 23 61 32 ABC1 third age 46 16 21 64 54 ABC1 retired 24 11 16 73 77 Two full-time earners 67 19 24 56 33 One-person households under 65 51 20 21 59 49 Body mass index: Underweight 61 23 30 47 39 Normal 52 16 23 60 48 Overweight 54 19 24 57 46 Obese 61 26 24 50 39 * includes not stated Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL



FIGURE 83: FREQUENCY OF DRINKING FIZZY SOFT DRINKS (EXCLUDING COLA), BY DEMOGRAPHICS, 2010 Base: adults aged 15+ who drink fizzy soft drinks All

users Heavy

users – once a day

or more

Medium users – 2 or

3 times a week

Light users – once a week

or less*

Non-users

% % % % %







FIGURE 84: FREQUENCY OF DRINKING FIZZY MINERALS AS MIXERS FOR ALCOHOLIC DRINKS, BY DEMOGRAPHICS, 2010 Base: adults aged 15+ who drink fizzy minerals as mixers for alcoholic drinks All

users Heavy users – 2 or 3 times a week or more

Medium users – Once a week to 2 or 3 times a

month

Light users – Once a

month or less*

Non-users

% % % % %







FIGURE 85: VOLUMETRIC FOR DRINKING COLAS, BY DEMOGRAPHICS, 2010 Base: adults aged 15+ who drink colas Weighted sample Colas Occasions per

month

All 27,205 304,027 11.2 Gender: Men 14,124 156,795 11.1 Women 13,080 147,231 11.3 Age group: 15-24 5,875 77,087 13.1 25-34 5,777 71,283 12.3 35-44 5,778 64,300 11.1 45-54 4,522 46,144 10.2 55-64 2,967 28,744 9.7 65+ 2,285 16,468 7.2 Socio-economic group: AB 7,130 65,963 9.3 C1 7,996 83,845 10.5 C2 5,960 71,833 12.1 D 4,167 55,872 13.4 E 1,952 26,514 13.6 Presence of children: Under 1 year 804 9,538 11.9 1-4 years 4,392 56,403 12.8 5-9 years 3,985 46,466 11.7 10-15 years 5,478 62,076 11.3 No children in household 16,356 177,466 10.9 Marital status: Single 8,082 99,314 12.3 Married/living as married 16,551 176,714 10.7 Separated/divorced/widowed 2,443 26,546 10.9 Working status: Full-time 11,040 125,516 11.4 Part-time 4,760 53,306 11.2 Not working 11,389 125,016 11.0 Household size: 1 person 3,087 31,580 10.2 2 persons 8,114 86,784 10.7 3 persons 6,370 70,811 11.1 4 persons 6,396 73,678 11.5 5 persons+ 3,238 41,175 12.7 Region: Greater London 3,727 40,986 11.0 South East/East Anglia 6,608 70,569 10.7 South West 2,056 20,462 10.0 Wales 1,233 13,904 11.3 East and West Midlands 4,348 49,834 11.5 North West 2,768 32,274 11.7 Yorkshire and Humberside 2,346 25,201 10.7 North 1,463 16,924 11.6 Scotland 2,655 33,874 12.8



Lifestage: Pre-/no family 9,867 121,716 12.3 Families 9,303 106,207 11.4 Third age 5,757 59,660 10.4 Retired 2,277 16,444 7.2 Special Groups: ABC1 pre-/no family 5,744 63,396 11.0 ABC1 family 5,076 50,351 9.9 ABC1 third age 3,056 27,531 9.0 ABC1 retired 1,250 8,530 6.8 Two full-time earners 4,870 54,504 11.2 One-person households under 65 2,361 26,155 11.1 Body mass index: Underweight 672 8,302 12.4 Normal 10,973 108,163 9.9 Overweight 8,805 96,346 10.9 Obese 6,082 83,389 13.7 Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL

FIGURE 86: VOLUMETRIC FOR DRINKING FIZZY SOFT DRINKS (EXCLUDING COLA), BY DEMOGRAPHICS, 2010 Base: adults aged 15+ who drink fizzy soft drinks Weighted sample Fizzy soft drinks Occasions per

month

All 28,761 267,354 9.3 Gender: Men 14,728 136,770 9.3 Women 14,033 130,584 9.3 Age group: 15-24 6,390 71,705 11.2 25-34 5,545 51,951 9.4 35-44 5,443 42,539 7.8 45-54 4,600 37,614 8.2 55-64 3,151 27,192 8.6 65+ 3,632 36,353 10.0 Socio-economic group: AB 7,104 47,615 6.7 C1 8,419 73,531 8.7 C2 6,294 64,326 10.2 D 4,668 53,107 11.4 E 2,276 28,775 12.6 Presence of children: Under 1 year 727 6,164 8.5 1-4 years 4,305 41,770 9.7 5-9 years 3,953 37,261 9.4 10-15 years 5,692 52,995 9.3 No children in household 17,926 164,843 9.2



Marital status: Single 8,727 92,689 10.6 Married/living as married 16,988 145,284 8.6 Separated/divorced/widowed 2,945 28,525 9.7 Working status: Full-time 10,757 93,098 8.7 Part-time 4,800 41,786 8.7 Not working 13,183 132,227 10.0 Household size: 1 person 3,669 34,052 9.3 2 persons 8,960 80,427 9.0 3 persons 6,573 61,880 9.4 4 persons 6,040 52,644 8.7 5 persons+ 3,518 38,352 10.9 Region: Greater London 3,634 32,739 9.0 South East/East Anglia 6,757 51,992 7.7 South West 2,335 17,475 7.5 Wales 1,386 14,316 10.3 East and West Midlands 4,902 49,827 10.2 North West 2,998 25,998 8.7 Yorkshire and Humberside 2,661 27,441 10.3 North 1,442 15,316 10.6 Scotland 2,647 32,251 12.2 Lifestage: Pre-/no family 10,136 99,492 9.8 Families 9,017 80,026 8.9 Third age 5,988 51,557 8.6 Retired 3,620 36,279 10.0 Special Groups: ABC1 pre-/no family 5,863 48,607 8.3 ABC1 family 4,761 31,720 6.7 ABC1 third age 3,044 25,049 8.2 ABC1 retired 1,855 15,770 8.5 Two full-time earners 4,643 39,457 8.5 One-person households under 65 2,433 20,814 8.6 Body mass index: Underweight 726 6,925 9.5 Normal 11,793 99,425 8.4 Overweight 9,347 84,873 9.1 Obese 6,154 67,869 11.0 Taken from the TGI survey of around 25,000 adults SOURCE: GB TGI, KANTAR MEDIA UK LTD Q1 2011 (OCT-SEP)/MINTEL



FIGURE 87: MOST POPULAR CARBONATED SOFT DRINKS BOUGHT OR DRUNK IN THE PAST 12 MONTHS, BY DEMOGRAPHICS, APRIL 2011 Base: 1,500 internet users aged 16+ Low or no-

calorie/diet carbonated soft drinks

Standard carbonated soft drinks

Low or no-calorie/diet

cola (eg Diet Coke, Pepsi

Max)

Standard cola (eg Coke, Pepsi)

Standard cola-

flavoured carbonated

soft drink (eg Ginger beer, lemonade,

J2O) % % % % %

All 52 51 46 40 32 Gender: Male 47 55 42 46 33 Female 57 47 51 33 31 Age: 16-34 58 67 53 57 40 16-44 58 62 53 53 38 35+ 49 44 43 32 28 45+ 46 40 39 26 26 16-24 59 68 54 56 44 25-34 58 65 52 57 36 35-44 58 54 54 47 33 45-54 53 44 45 36 24 55+ 42 37 36 21 27 Region: Inner and Greater London 52 53 47 41 34 South East/East Anglia 49 48 45 36 30 South West and Wales 50 56 44 43 35 East and West Midlands 47 46 42 37 27 North West 57 52 47 45 35 Yorks, Humberside 56 53 52 40 33 North and Scotland 60 52 53 40 33 Working status: Employee full-time (30+ hours/week) 55 53 49 46 30 Employee part-time (less than 30 hours/week)

55 56 50 40 35

Any self-employed* 42 49 38 43 27 In full-time education 60 69 55 58 47 Retired 45 35 38 17 27 Not working for any other reason 53 53 47 42 34 Socio-economic group: ABC1 54 51 48 40 33 AB 55 50 49 36 34 C1 53 51 47 43 33 C2DE 49 51 44 40 29 C2 55 54 48 43 32 D 53 52 48 44 25 E 40 47 37 34 30



Highest level of education: Secondary education (GCSE/O-level or equivalent)

54 51 48 40 30

High school education completed (A-level or equivalent)

56 59 51 51 34

Further qualification (between high school and university)

51 47 44 35 31

University degree 48 49 43 37 33 Doctorate level or professional equivalent*

56 45 51 31 31

Daily newspaper readership: Broadsheet readers 53 53 46 41 35 Mid-market tabloid readers 55 52 47 40 32 Popular tabloid readers 61 57 53 47 31 None of these 48 48 45 37 32 Sunday newspaper readership: Broadsheet readers 53 53 45 40 35 Mid-market tabloid readers 55 47 49 35 29 Popular tabloid readers 62 59 54 49 32 None of these 47 50 43 39 32 Gross annual household income: Under £9,500 44 55 40 43 36 £9,500-15,499 42 44 37 30 29 £15,500-24,999 51 50 43 40 28 £25,000-49,999 59 52 52 41 33 £50,000 or over 57 54 54 44 35 Don't know/Refused 49 50 45 38 31 Presence of own children: Aged 0-4 62 59 56 50 34 Aged 5-9 63 54 56 44 32 Aged 10-15 65 55 61 48 34 Any children 62 56 58 48 34 No children in household 49 49 43 37 31 Household size: 1 44 42 37 31 26 2 49 46 43 31 30 3 53 61 48 51 38 4 64 58 61 49 34 5 or more 61 61 53 54 38 Current marital status: Single 54 60 48 51 36 Married/civil partnership/living as married

53 49 47 37 31

Separated, divorced or widowed 44 39 39 25 23 Car ownership: Yes 54 50 48 38 32 No 43 55 38 45 34 Daily personal internet usage: 0-3 hours 53 47 48 36 30 4-6 hours 51 55 44 43 34 7+ hours 54 59 48 48 36



Supermarket used: Asda 59 57 52 46 35 Co-op 53 53 48 39 36 Marks & Spencer 60 53 54 40 35 Morrisons 57 51 50 39 33 Sainsbury's 54 52 46 42 33 Tesco 57 53 51 42 34 Waitrose 53 53 49 42 36 Discounter eg Aldi, Lidl, Netto etc 54 52 50 38 33 Other 38 47 32 38 32 Personal mobile phone network provider:

O2 56 55 49 43 35 Orange 49 50 43 40 31 Vodafone 57 53 53 42 35 T-Mobile 50 46 42 35 30 Virgin Mobile 52 46 48 33 28 Three 53 57 52 47 28 Other (eg Tesco) 45 51 39 38 33 TV reception: I have digital satellite (BSkyB) 56 51 51 40 30 I have digital cable (Virgin Media) 57 54 51 45 35 Freeview digital box/TV 53 52 45 40 34 Other digital TV 51 55 45 43 34 Analogue cable/Terrestrial TV only* 42 50 37 38 33 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



FIGURE 88: NEXT MOST POPULAR CARBONATED SOFT DRINKS BOUGHT OR DRUNK IN THE PAST 12 MONTHS, BY

DEMOGRAPHICS, APRIL 2011 Base: 1,500 internet users aged 16+ As a mixer

with alcohol eg Gin and

Tonic, Whisky and Coke

Low or no-calorie/diet

cola-flavoured carbonated

soft drink (eg 7UP Free, Dr Pepper Zero, Sprite Zero)

Premium soft drinks (ie

those that are slightly more

expensive and are only

available in glass bottles

such as Shloer,

Peartiser, Fentimans

Ginger Beer)

I have not bought or drunk any

carbonated soft drinks in the past 12

months

% % % %

All 27 26 17 15 Gender: Male 25 23 14 17 Female 28 28 19 14 Age: 16-34 32 32 22 9 16-44 29 32 20 10 35+ 24 23 14 19 45+ 24 20 13 21 16-24 34 35 21 9 25-34 30 30 22 8 35-44 23 31 17 12 45-54 23 25 13 19 55+ 25 17 13 22 Region: Inner and Greater London 30 24 20 13 South East/East Anglia 24 24 17 18 South West and Wales 25 26 15 15 East and West Midlands 22 22 13 19 North West 30 30 19 13 Yorks, Humberside 32 25 20 11 North and Scotland 30 32 14 13 Working status: Employee full-time (30+ hours/week) 28 28 18 12 Employee part-time (less than 30 hours/week)

27 29 21 11

Any self-employed* 32 22 16 24 In full-time education 34 37 22 10 Retired 26 18 12 22 Not working for any other reason 18 23 12 16 Socio-economic group: ABC1 30 27 19 15 AB 31 27 21 14 C1 28 27 18 16 C2DE 22 24 11 16 C2 25 30 14 10 D 24 23 9 12 E 17 17 10 26




20 23 12 14


34 31 17 10


25 26 16 18

University degree 32 25 22 16 Doctorate level or professional equivalent*

29 25 21 18

Daily newspaper readership: Broadsheet readers 32 27 23 13 Mid-market tabloid readers 28 29 17 13 Popular tabloid readers 26 32 16 9 None of these 25 24 14 20 Sunday newspaper readership: Broadsheet readers 35 28 22 11 Mid-market tabloid readers 28 27 18 13 Popular tabloid readers 24 30 17 8 None of these 24 24 15 20 Gross annual household income: Under £9,500 16 15 11 18 £9,500-15,499 24 22 9 22 £15,500-24,999 24 21 15 16 £25,000-49,999 30 32 18 11 £50,000 or over 34 31 27 13 Don't know/Refused 28 24 16 20 Presence of own children: Aged 0-4 21 30 20 11 Aged 5-9 21 36 19 9 Aged 10-15 22 38 18 9 Any children 22 34 19 9 No children in household 28 23 16 17 Household size: 1 25 17 12 23 2 27 22 17 17 3 27 30 19 11 4 27 34 15 11 5 or more 30 37 22 10 Current marital status: Single 29 29 18 14 Married/civil partnership/living as married

27 26 17 15

Separated, divorced or widowed 21 17 12 19 Car ownership: Yes 27 27 17 15 No 25 20 14 18 Daily personal internet usage: 0-3 hours 27 26 17 17 4-6 hours 25 26 15 15 7+ hours 29 28 17 12



Supermarket used: Asda 27 31 19 11 Co-op 33 31 21 14 Marks & Spencer 32 31 28 12 Morrisons 31 31 18 13 Sainsbury's 31 29 21 14 Tesco 28 29 18 13 Waitrose 41 30 29 11 Discounter eg Aldi, Lidl, Netto etc 32 27 16 13 Other 22 28 18 19 Personal mobile phone network provider:

O2 27 29 19 12 Orange 26 23 15 17 Vodafone 31 29 20 13 T-Mobile 26 27 18 16 Virgin Mobile 30 23 12 18 Three 23 19 9 14 Other (eg Tesco) 21 22 16 19 TV reception: I have digital satellite (BSkyB) 22 29 14 14 I have digital cable (Virgin Media) 27 30 18 12 Freeview digital box/TV 30 28 19 15 Other digital TV 33 24 13 16 Analogue cable/Terrestrial TV only* 22 18 9 25 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



FIGURE 89: MOST POPULAR CARBONATED SOFT DRINKS BOUGHT OR DRUNK IN THE PAST 12 MONTHS, BY DEMOGRAPHICS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months Low or no-

calorie/diet carbonated soft drinks

Standard carbonated soft drinks

Low or no-calorie/diet cola (eg

Diet Coke, Pepsi Max)

Standard cola (eg Coke,

Pepsi)

% % % %

All 62 60 55 47 Gender: Male 57 67 50 56 Female 66 54 59 39 Age: 16-34 64 73 58 62 16-44 64 69 59 59 35+ 60 54 53 39 45+ 58 50 50 33 16-24 65 75 59 62 25-34 63 71 56 62 35-44 65 62 61 53 45-54 66 54 56 44 55+ 55 48 47 27 Region: Inner and Greater London 60 61 54 47 South East/East Anglia 60 59 54 44 South West and Wales 58 66 52 50 East and West Midlands 58 57 52 46 North West 65 60 54 52 Yorks, Humberside 64 59 59 45 North and Scotland 69 60 61 46 Working status: Employee full-time (30+ hours/week) 63 61 56 52 Employee part-time (less than 30 hours/week)

62 63 56 45

In full-time education 67 77 61 65 Retired 57 45 49 22 Not working for any other reason 63 64 56 50 Socio-economic group: ABC1 63 60 56 46 AB 64 59 57 42 C1 62 61 55 51 C2DE 59 61 52 48 C2 61 60 53 47 D 60 59 55 50 E 54 63 49 46




63 60 56 47


63 65 57 57


62 58 53 43


69 55 62 38

Daily newspaper readership: Broadsheet readers 61 61 53 47 Mid-market tabloid readers 63 59 54 46 Popular tabloid readers 67 62 58 52 None of these 61 60 56 46 Sunday newspaper readership: Broadsheet readers 59 59 51 44 Mid-market tabloid readers 63 54 56 40 Popular tabloid readers 68 64 59 53 None of these 59 63 54 49 Gross annual household income: Under £9,500 53 67 48 53 £9,500-15,499 54 57 47 39 £15,500-24,999 60 59 52 47 £25,000-49,999 66 58 58 46 £50,000 or over 66 62 62 50 Don't know/Refused 60 62 56 47 Presence of own children: Aged 0-4 70 67 63 57 Aged 5-9 69 60 62 49 Aged 10-15 72 60 67 52 Any children 69 62 64 53 No children in household 59 60 52 45 Household size: 1 57 54 49 40 2 59 55 51 37 3 60 69 54 58 4 71 65 68 55 5 or more 68 68 59 60 Current marital status: Single 63 70 56 59 Married/civil partnership/living as married

62 58 56 44

Separated, divorced or widowed 54 48 48 31 Car ownership: Yes 64 59 57 45 No 52 67 46 54 Daily personal internet usage: 0-3 hours 63 56 57 43 4-6 hours 59 65 51 50 7+ hours 62 67 55 55



Supermarket used: Asda 66 63 58 51 Co-op 62 62 56 46 Marks & Spencer 68 60 61 45 Morrisons 66 59 57 45 Sainsbury's 63 61 54 49 Tesco 65 61 58 48 Waitrose 60 60 55 47 Discounter eg Aldi, Lidl, Netto etc 63 60 57 43 Other* 46 58 39 46 Personal mobile phone network provider:

O2 63 62 55 49 Orange 59 60 52 49 Vodafone 65 61 60 49 T-Mobile 59 54 50 41 Virgin Mobile 64 56 58 40 Other (eg Tesco)* 55 63 48 46 TV reception: I have digital satellite (BSkyB) 66 59 59 46 I have digital cable (Virgin Media) 65 62 58 51 Freeview digital box/TV 62 61 53 47 Other digital TV 61 66 54 51 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



FIGURE 90: NEXT MOST POPULAR CARBONATED SOFT DRINKS BOUGHT OR DRUNK IN THE PAST 12 MONTHS, BY

DEMOGRAPHICS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months Standard cola-

flavoured carbonated soft drink (eg Ginger beer, lemonade,

J2O)

As a mixer with alcohol eg Gin

and Tonic, Whisky and Coke

Low or no-calorie/diet cola-

flavoured carbonated soft drink (eg 7UP

Free, Dr Pepper Zero, Sprite Zero)

Premium soft drinks (ie those that are slightly more expensive

and are only available in glass bottles such as

Shloer, Peartiser, Fentimans Ginger

Beer) % % % %

All 38 32 31 19 Gender: Male 40 31 28 17 Female 36 32 33 22 Age: 16-34 44 35 35 24 16-44 42 32 35 22 35+ 34 30 28 17 45+ 33 31 25 16 16-24 49 38 39 23 25-34 39 33 32 24 35-44 38 26 35 20 45-54 30 28 30 16 55+ 34 33 22 16 Region: Inner and Greater London 39 34 27 23 South East/East Anglia 37 30 29 21 South West and Wales 41 29 30 18 East and West Midlands 33 28 28 16 North West 40 34 34 21 Yorks, Humberside 37 36 28 23 North and Scotland 38 34 37 17 Working status: Employee full-time (30+ hours/week)

34 32 32 21


39 30 33 24

In full-time education 53 38 41 25 Retired 34 34 23 15 Not working for any other reason

40 21 28 15

Socio-economic group: ABC1 39 35 32 23 AB 40 36 32 24 C1 39 33 32 21 C2DE 35 26 28 14 C2 35 27 33 16 D 28 27 27 10 E 40 23 23 14




35 23 27 14


38 38 35 19


38 30 31 19


38 35 31 25

Daily newspaper readership:

Broadsheet readers 40 36 31 27 Mid-market tabloid readers 37 32 33 20 Popular tabloid readers 34 29 36 18 None of these 40 31 30 17 Sunday newspaper readership:

Broadsheet readers 39 39 31 25 Mid-market tabloid readers 34 32 31 20 Popular tabloid readers 35 26 33 18 None of these 41 30 30 18 Gross annual household income:

Under £9,500 43 20 18 14 £9,500-15,499 38 31 29 12 £15,500-24,999 33 28 25 18 £25,000-49,999 37 33 36 20 £50,000 or over 41 39 36 31 Don't know/Refused 39 35 30 20 Presence of own children: Aged 0-4 38 24 34 23 Aged 5-9 35 23 40 21 Aged 10-15 38 24 42 20 Any children 37 25 37 21 No children in household 38 34 28 19 Household size: 1 33 32 23 15 2 36 32 26 20 3 43 30 34 22 4 38 30 38 17 5 or more 43 33 41 24 Current marital status: Single 42 34 33 21 Married/civil partnership/living as married

37 31 31 20

Separated, divorced or widowed

29 26 21 15

Car ownership: Yes 37 32 32 20 No 41 30 24 17



Daily personal internet usage:

0-3 hours 36 32 31 20 4-6 hours 40 29 30 18 7+ hours 41 33 32 19 Supermarket used: Asda 39 30 35 21 Co-op 43 39 37 24 Marks & Spencer 40 36 35 31 Morrisons 38 35 35 21 Sainsbury's 39 37 34 25 Tesco 39 32 33 21 Waitrose 41 46 34 33 Discounter eg Aldi, Lidl, Netto etc

38 37 32 19

Other* 39 27 35 23 Personal mobile phone network provider:

O2 39 31 32 22 Orange 37 32 28 18 Vodafone 40 35 34 23 T-Mobile 36 31 32 21 Virgin Mobile 34 36 29 14 Other (eg Tesco)* 41 26 28 20 TV reception: I have digital satellite (BSkyB)

35 26 33 16

I have digital cable (Virgin Media)

40 30 34 20

Freeview digital box/TV 40 35 33 22 Other digital TV 41 39 28 15 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



Appendix – Consumer Occasions for Carbonated Soft Drinks Usage Carbonated Soft Drinks UK, June 2011


Appendix – Consumer Occasions for Carbonated Soft

Drinks Usage FIGURE 91: OCCASIONS PEOPLE BUY CARBONATED SOFT DRINKS FOR, BY DEMOGRAPHICS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months To drink at

home (or for my

partner/ family to do so)

To drink at an outdoor occasion

(eg picnic, for

drinking in the park, a barbecue)

To drink when on the go (ie when out

and about, between venues)

To drink in a pub/bar/ restaurant

or any other

venue with an alcohol

licence (either on its own or

as an alcoholic

mixer)

To drink at work

To drink before,

during or after

exercise

% % % % % %

All 87 40 38 37 28 13 Gender: Male 85 37 40 32 30 17 Female 88 42 35 41 25 9 Age: 16-34 85 45 57 44 39 17 16-44 86 43 50 42 37 16 35+ 88 37 28 33 22 11 45+ 88 36 23 31 16 10 16-24 84 51 63 46 34 20 25-34 87 40 51 42 43 15 35-44 87 39 39 38 34 13 45-54 87 43 32 31 29 15 55+ 89 33 18 31 10 7 Region: Inner and Greater London 79 37 43 39 29 11 South East/East Anglia 90 40 32 35 23 8 South West and Wales 87 39 37 38 31 17 East and West Midlands 86 39 38 34 25 14 North West 90 38 40 36 29 12 Yorks, Humberside 80 43 39 38 28 16 North and Scotland 91 43 41 41 31 16 Working status: Employee full-time (30+ hours/week)

84 37 39 38 48 15


87 43 35 40 24 9

Any self-employed* 84 41 49 39 35 16 In full-time education 85 57 65 48 32 19 Retired 90 37 18 33 4 8 Not working for any other reason

92 36 38 30 4 11



Socio-economic group: ABC1 85 40 38 41 30 14 AB 86 40 38 40 28 14 C1 85 41 39 42 33 13 C2DE 90 39 37 30 22 12 C2 88 43 38 35 30 12 D 93 37 38 30 31 10 E 90 35 34 23 5 13 Highest level of education:

Secondary education (GCSE/O-level or equivalent)

92 40 32 30 22 12


87 46 45 37 36 15


85 43 42 44 27 12

University degree 84 36 37 40 32 14 Doctorate level or professional equivalent*

89 31 35 41 27 17

Daily newspaper readership:

Broadsheet readers 84 42 42 43 31 18 Mid-market tabloid readers 87 42 35 35 30 17 Popular tabloid readers 86 45 48 37 38 19 None of these 87 36 35 36 21 8 Sunday newspaper readership:

Broadsheet readers 84 41 42 42 31 18 Mid-market tabloid readers 88 43 32 36 27 17 Popular tabloid readers 86 42 44 35 37 17 None of these 88 36 37 36 23 8 Gross annual household income:

Under £9,500 88 33 39 21 12 15 £9,500-15,499 90 37 36 30 18 9 £15,500-24,999 89 36 31 37 28 11 £25,000-49,999 86 41 39 43 34 14 £50,000 or over 86 50 47 41 39 15 Don't know/Refused 85 40 37 35 18 12 Presence of own children:

Aged 0-4 88 50 54 40 29 15 Aged 5-9 80 38 43 33 32 15 Aged 10-15 88 45 41 35 29 18 Any children 86 46 45 37 31 17 No children in household 87 38 35 37 26 12 Household size: 1 81 28 27 35 28 11 2 90 40 31 35 24 10 3 84 36 42 38 29 16 4 86 49 45 40 31 17 5 or more 89 50 60 41 33 16



Current marital status: Single 85 43 49 42 37 16 Married/civil partnership/living as married

89 42 35 36 25 12


84 24 23 28 16 8

Car ownership: Yes 87 41 37 37 28 13 No 85 33 41 37 27 11 Daily personal internet usage:

0-3 hours 88 39 34 37 27 12 4-6 hours 86 42 42 38 28 15 7+ hours 87 38 42 37 28 14 Supermarket used: Asda 89 44 44 37 32 16 Co-op 87 44 40 43 27 15 Marks & Spencer 87 45 38 45 32 18 Morrisons 88 46 40 42 29 14 Sainsbury's 88 41 40 40 30 13 Tesco 87 43 42 39 30 14 Waitrose 85 48 36 44 33 15 Discounter eg Aldi, Lidl, Netto etc

91 44 41 42 25 15

Other 85 45 33 33 19 12 Personal mobile phone network provider:

O2 89 43 37 39 30 12 Orange 86 41 46 36 27 12 Vodafone 86 39 38 38 29 14 T-Mobile 84 37 37 35 26 16 Virgin Mobile 86 43 26 33 31 13 Three 87 41 49 38 29 16 Other (eg Tesco) 88 32 37 39 18 12 TV reception: I have digital satellite (BSkyB)

91 42 39 35 31 15


88 40 39 38 34 12

Freeview digital box/TV 86 40 40 38 27 14 Other digital TV 90 40 33 35 20 10 Analogue cable/Terrestrial TV only*

70 37 46 44 37 21

* small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



FIGURE 92: MOST POPULAR GENERAL ATTITUDES TOWARDS CARBONATED SOFT DRINKS, BY DEMOGRAPHICS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months They are

an affordable

treat

I drink a variety

of different brands

I like to drink a

variety of flavours

I almost always opt for low or

no-calorie/diet

options

They are one of life’s guilty

pleasures

They are good for you

in moderation

% % % % % %

All 55 49 47 46 42 39 Gender: Male 53 54 50 39 41 40 Female 57 45 44 53 42 38 Age: 16-34 61 55 57 41 53 37 16-44 59 53 52 42 49 38 35+ 53 46 41 49 36 40 45+ 51 45 40 51 33 40 16-24 62 57 59 39 51 38 25-34 59 53 54 42 54 36 35-44 56 49 44 45 43 41 45-54 51 48 45 55 37 45 55+ 51 44 38 49 30 37 Region: Inner and Greater London 52 44 46 45 43 42 South East/East Anglia 52 48 45 48 41 40 South West and Wales 56 48 45 39 41 40 East and West Midlands 58 53 46 44 40 37 North West 56 50 48 46 44 35 Yorks, Humberside 53 49 47 48 37 37 North and Scotland 61 53 51 55 44 42 Working status: Employee full-time (30+ hours/week)

55 53 52 45 44 41


60 35 35 49 39 35

In full-time education 68 59 58 39 52 37 Retired 51 43 37 53 32 38 Not working for any other reason 52 50 47 46 43 42 Socio-economic group: ABC1 56 51 48 48 42 37 AB 55 51 46 50 41 37 C1 57 51 50 47 43 38 C2DE 55 45 44 42 41 42 C2 58 47 44 46 42 43 D 47 42 43 39 46 38 E 56 47 46 39 37 42




54 45 43 46 38 43


60 54 54 42 48 38


53 45 41 48 39 37

University degree 57 55 50 50 43 37 Daily newspaper readership: Broadsheet readers 54 56 50 46 42 41 Mid-market tabloid readers 55 48 48 51 44 44 Popular tabloid readers 60 55 56 47 50 46 None of these 55 47 43 44 37 33 Sunday newspaper readership: Broadsheet readers 53 56 49 48 43 39 Mid-market tabloid readers 55 49 48 54 45 46 Popular tabloid readers 60 51 52 48 49 46 None of these 54 47 44 41 38 35 Gross annual household income:

Under £9,500 62 53 49 36 42 37 £9,500-15,499 52 45 45 42 38 42 £15,500-24,999 55 47 45 43 44 35 £25,000-49,999 57 51 50 54 43 43 £50,000 or over 52 55 49 50 43 35 Don't know/Refused 53 43 38 40 34 37 Presence of own children: Aged 0-4 58 47 53 53 56 34 Aged 5-9 54 50 49 54 52 44 Aged 10-15 61 54 51 54 46 47 Any children 59 51 49 54 49 43 No children in household 54 49 46 43 39 38 Household size: 1 52 47 43 41 36 38 2 51 46 42 47 37 37 3 57 54 53 45 47 45 4 61 48 44 52 46 36 5 or more 64 60 64 43 49 39 Current marital status: Single 61 54 54 36 46 40 Married/civil partnership/living as married

54 48 45 51 42 40

Separated, divorced or widowed 47 40 36 48 29 32 Car ownership: Yes 56 49 47 50 41 40 No 54 50 47 31 43 33 Daily personal internet usage: 0-3 hours 56 49 45 51 39 38 4-6 hours 56 49 48 44 44 38 7+ hours 53 49 50 34 46 45



Supermarket used: Asda 57 53 53 50 47 42 Co-op 56 58 49 46 39 38 Marks & Spencer 56 55 53 53 44 45 Morrisons 55 51 49 49 39 38 Sainsbury's 56 56 52 47 41 40 Tesco 57 53 49 49 44 39 Waitrose 53 59 57 52 44 39 Discounter eg Aldi, Lidl, Netto etc 57 56 53 54 43 39 Other* 50 48 43 33 38 29 Personal mobile phone network provider:

O2 54 49 46 47 42 36 Orange 53 50 45 42 38 41 Vodafone 51 50 52 49 44 43 T-Mobile 59 48 42 49 42 38 Virgin mobile 56 48 45 50 42 40 Other (eg Tesco)* 63 46 46 39 42 35 TV reception: I have digital satellite (BSkyB) 57 53 49 50 45 41 I have digital cable (Virgin Media) 58 48 47 48 43 47 Freeview digital box/TV 55 50 46 45 39 38 Other digital TV 61 48 51 47 37 38 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



FIGURE 93: NEXT MOST POPULAR GENERAL ATTITUDES TOWARDS CARBONATED SOFT DRINKS, BY DEMOGRAPHICS, APRIL

2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months I always

buy the same brand

They are good value

Own-label is as good as branded

I am prepared to pay more for better-quality

carbonated soft drinks ie those

made with natural ingredients and sold in stylish, glass bottles

I try to avoid them

because they are

unhealthy

% % % % %

All 35 33 26 25 25 Gender: Male 32 33 27 24 23 Female 38 34 26 26 26 Age: 16-34 39 37 26 29 27 16-44 37 36 24 27 26 35+ 33 31 27 23 24 45+ 33 30 29 23 23 16-24 37 39 27 28 25 25-34 41 36 25 31 29 35-44 34 34 20 23 25 45-54 32 27 27 25 23 55+ 34 32 30 22 24 Region: Inner and Greater London 40 36 22 30 42 South East/East Anglia 34 33 28 21 25 South West and Wales 37 29 27 26 22 East and West Midlands 37 32 33 25 25 North West 34 37 28 27 25 Yorks, Humberside 29 36 24 26 29 North and Scotland 35 34 18 24 14 Working status: Employee full-time (30+ hours/week) 34 33 26 26 27 Employee part-time (less than 30 hours/week)

40 31 22 26 28

In full-time education 38 43 26 29 21 Retired 35 34 31 19 20 Not working for any other reason 38 32 29 19 22 Socio-economic group: ABC1 34 33 26 28 27 AB 32 31 27 32 31 C1 36 34 25 24 23 C2DE 38 35 27 19 21 C2 36 34 26 24 19 D 43 35 22 21 22 E 36 37 32 12 22




35 37 27 18 17


36 38 25 30 22


36 32 25 26 25

University degree 33 28 27 31 36 Daily newspaper readership: Broadsheet readers 32 32 26 36 34 Mid-market tabloid readers 39 35 25 30 27 Popular tabloid readers 38 41 29 28 23 None of these 33 31 28 18 22 Sunday newspaper readership: Broadsheet readers 31 32 26 37 37 Mid-market tabloid readers 39 36 28 28 27 Popular tabloid readers 40 40 29 28 24 None of these 33 30 27 19 20 Gross annual household income: Under £9,500 42 38 33 13 26 £9,500-15,499 40 36 28 22 23 £15,500-24,999 33 29 27 28 23 £25,000-49,999 37 36 26 28 25 £50,000 or over 31 30 22 32 31 Don't know/Refused 31 31 25 19 21 Presence of own children: Aged 0-4 38 37 28 30 30 Aged 5-9 39 36 30 31 33 Aged 10-15 40 37 24 28 28 Any children 40 37 26 29 30 No children in household 34 32 27 24 23 Household size: 1 34 29 29 21 29 2 34 31 24 25 23 3 34 34 24 29 26 4 36 38 26 24 26 5 or more 43 42 33 27 23 Current marital status: Single 37 37 25 25 24 Married/civil partnership/living as married

35 32 27 25 24

Separated, divorced or widowed 32 29 29 27 31 Car ownership: Yes 36 34 27 26 25 No 34 30 22 21 23 Daily personal internet usage: 0-3 hours 35 32 25 25 25 4-6 hours 35 33 26 25 25 7+ hours 39 39 31 28 24



Supermarket used: Asda 35 38 26 26 23 Co-op 29 32 29 25 27 Marks & Spencer 38 35 22 40 33 Morrisons 35 34 27 27 26 Sainsbury's 37 34 27 29 28 Tesco 36 34 26 26 26 Waitrose 31 34 26 41 37 Discounter eg Aldi, Lidl, Netto etc 34 39 35 24 25 Other* 30 26 33 23 31 Personal mobile phone network provider:

O2 41 33 27 26 23 Orange 33 33 26 21 27 Vodafone 30 35 29 31 27 T-Mobile 35 29 27 26 26 Virgin mobile 31 36 21 23 19 Other (eg Tesco)* 44 37 22 22 23 TV reception: I have digital satellite (BSkyB) 37 38 25 28 23 I have digital cable (Virgin Media) 38 38 30 24 24 Freeview digital box/TV 33 30 27 26 25 Other digital TV 35 32 27 19 24 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



Appendix – Consumer Attitudes towards Carbonated Soft Drinks Carbonated Soft Drinks UK, June 2011


Appendix – Consumer Attitudes towards Carbonated

Soft Drinks FIGURE 94: MOST POPULAR ATTITUDES TOWARDS CARBONATED SOFT DRINKS NOW COMPARED TO A YEAR AGO, BY

DEMOGRAPHICS, APRIL 2011 Base: 1,270 internet users aged 16+ who have bought carbonated soft drinks in the last 12 months I am more

likely to be aware that

they are not very good for

my health

I favour buying

brands I trust/are well-known rather than small, new or less well-known

brands

I am more likely to consider

drinking no calorie/diet

versions

I am more likely to consider drinking

them at home as an

alternative to alcohol

I base my purchasing decisions more on

discounts

% % % % %

All 50 47 45 36 36 Gender: Male 47 46 39 36 36 Female 52 48 50 37 35 Age: 16-34 52 49 41 45 46 16-44 50 49 43 43 41 35+ 49 46 46 32 30 45+ 50 45 47 29 29 16-24 52 48 38 41 51 25-34 52 51 44 48 42 35-44 46 47 45 38 33 45-54 52 45 51 35 35 55+ 49 46 45 26 26 Region: Inner and Greater London 48 44 42 39 30 South East/East Anglia 50 41 43 35 32 South West and Wales 51 45 40 37 41 East and West Midlands 47 47 40 32 35 North West 45 51 43 36 42 Yorks, Humberside 49 48 52 33 40 North and Scotland 59 57 55 43 34 Working status: Employee full-time (30+ hours/week)

49 47 46 45 37


52 52 44 28 32

In full-time education 53 50 38 39 49 Retired 47 49 48 28 25 Not working for any other reason

51 40 44 36 38



Socio-economic group: ABC1 49 48 47 38 35 AB 50 48 48 36 34 C1 47 47 46 40 36 C2DE 53 47 40 33 37 C2 51 49 43 33 36 D 53 45 37 33 35 E 54 45 38 35 39 Highest level of education: Secondary education (GCSE/O-level or equivalent)

49 49 46 37 36


52 45 40 36 41


47 47 47 33 31

University degree 51 46 44 40 37 Daily newspaper readership:

Broadsheet readers 52 46 46 39 37 Mid-market tabloid readers 55 50 49 38 39 Popular tabloid readers 54 54 48 44 40 None of these 45 42 41 31 34 Sunday newspaper readership:

Broadsheet readers 53 46 48 37 35 Mid-market tabloid readers 54 48 51 39 36 Popular tabloid readers 54 54 49 43 41 None of these 44 43 38 33 34 Gross annual household income:

Under £9,500 48 46 36 41 42 £9,500-15,499 55 49 43 37 38 £15,500-24,999 47 43 39 34 36 £25,000-49,999 52 51 51 41 38 £50,000 or over 53 48 50 39 30 Don't know/Refused 42 44 39 23 27 Presence of own children: Aged 0-4 54 57 54 48 46 Aged 5-9 57 52 53 50 39 Aged 10-15 57 49 56 44 40 Any children 54 51 54 45 41 No children in household 48 46 41 33 34 Household size: 1 44 47 40 34 32 2 49 46 44 33 31 3 48 48 46 41 42 4 55 48 49 39 39 5 or more 61 52 43 43 45



Current marital status: Single 47 49 37 39 39 Married/civil partnership/living as married

52 46 48 36 35


48 46 48 30 31

Car ownership: Yes 50 48 47 37 36 No 51 43 34 31 35 Daily personal internet usage:

0-3 hours 48 48 47 35 32 4-6 hours 51 45 44 37 36 7+ hours 53 50 38 39 49 Supermarket used: Asda 50 49 49 42 38 Co-op 52 46 48 38 35 Marks & Spencer 51 56 50 40 33 Morrisons 49 49 49 38 39 Sainsbury's 54 48 46 37 37 Tesco 52 49 46 38 38 Waitrose 55 44 50 40 28 Discounter eg Aldi, Lidl, Netto etc

57 46 51 39 38

Other Personal mobile phone network provider:

57 33 32 25 29

O2 48 48 45 37 34 Orange 53 47 40 36 42 Vodafone 46 49 50 38 34 T-Mobile 54 51 43 38 33 Virgin Mobile 51 41 47 26 32 Other (eg Tesco)* 54 50 44 33 41 TV reception: I have digital satellite (BSkyB)

50 50 49 38 35


51 42 49 39 39

Freeview digital box/TV 50 47 44 37 36 Other digital TV 50 50 43 35 34 * small sub-sample (75-100) SOURCE: TOLUNA/MINTEL



FIGURE 95: NEXT MOST POPULAR ATTITUDES TOWARDS CARBONATED SOFT DRINKS NOW COMPARED TO A YEAR AGO, BY


conscious of carbonated soft drinks being good

value compared to

other soft drinks (ie bottled water, energy

drinks, fruit juices)

I am more likely to consider drinking them in

pubs/bars/ restaurants

as an alternative to

alcohol

I increasingly

prefer the taste of cola

(eg Diet Coke, Pepsi)

to cola-flavoured

carbonated soft drinks

(eg Dr Pepper,

Sprite Zero)

Regardless of calories, I

am more likely to look for healthier carbonated

soft drinks ie no artificial ingredients,

healthy ingredients

such as pomegranate

I am prepared to pay extra for a premium soft drink (ie those

that are slightly more



such as Shloer,


Ginger Beer) % % % % %


31 34 33 31 23


29 27 30 26 24


33 28 24 25 13




34 30 31 26 15


35 31 32 25 20


35 31 32 32 21




Under £9,500 39 30 25 25 15 £9,500-15,499 31 29 30 30 13 £15,500-24,999 32 29 32 29 18 £25,000-49,999 35 34 32 31 24 £50,000 or over 31 30 29 29 31 Don't know/Refused 28 28 30 21 18 Presence of own children: Aged 0-4 41 33 44 33 27 Aged 5-9 40 39 43 33 30 Aged 10-15 34 31 36 32 22 Any children 35 32 39 33 24 No children in household 32 30 27 27 20 Household size: 1 29 31 27 28 17 2 32 29 25 28 21 3 30 32 34 31 24 4 38 31 37 26 19 5 or more 40 33 41 29 23 Current marital status: Single 35 31 34 29 21 Married/civil partnership/living as married

34 30 31 29 21


23 31 21 27 19





39 37 28 31 23


16 29 14 30 12

O2 34 29 31 28 21 Orange 32 30 30 31 20 Vodafone 32 31 27 29 25 T-Mobile 29 31 32 32 26 Virgin Mobile 32 30 28 19 12 Other (eg Tesco)* 39 35 32 26 19 TV reception: I have digital satellite (BSkyB) 36 34 33 29 23 I have digital cable (Virgin Media)

38 28 33 29 21




FIGURE 96: MOST POPULAR ATTITUDES TOWARDS CARBONATED SOFT DRINKS NOW COMPARED TO A YEAR AGO, BY


likely to be aware that

they are not very good for

my health

I favour buying

brands I trust/are well-known rather than small, new or less well-known

brands

I am more likely to consider

drinking no calorie/diet

versions

I am more likely to consider drinking

them at home as an

alternative to alcohol

I base my purchasing decisions more on

discounts

% % % % %


49 47 46 45 37


52 52 44 28 32


51 40 44 36 38

Socio-economic group: ABC1 49 48 47 38 35 AB 50 48 48 36 34 C1 47 47 46 40 36 C2DE 53 47 40 33 37 C2 51 49 43 33 36 D 53 45 37 33 35 E 54 45 38 35 39




49 49 46 37 36


52 45 40 36 41


47 47 47 33 31





52 46 48 36 35


48 46 48 30 31

Car ownership: Yes 50 48 47 37 36 No 51 43 34 31 35



Daily personal internet usage:


57 46 51 39 38


57 33 32 25 29

O2 48 48 45 37 34 Orange 53 47 40 36 42 Vodafone 46 49 50 38 34 T-Mobile 54 51 43 38 33 Virgin Mobile 51 41 47 26 32 Other (eg Tesco)* 54 50 44 33 41 TV reception: I have digital satellite (BSkyB)

50 50 49 38 35


51 42 49 39 39




FIGURE 97: NEXT MOST POPULAR ATTITUDES TOWARDS CARBONATED SOFT DRINKS NOW COMPARED TO A YEAR AGO, BY


conscious of carbonated soft drinks being good

value compared to

other soft drinks (ie bottled water, energy

drinks, fruit juices)

I am more likely to consider drinking them in

pubs/bars/ restaurants

as an alternative to

alcohol

I increasingly

prefer the taste of cola

(eg Diet Coke, Pepsi)

to cola-flavoured

carbonated soft drinks

(eg Dr Pepper,

Sprite Zero)

Regardless of calories, I

am more likely to look for healthier carbonated

soft drinks ie no artificial ingredients,

healthy ingredients

such as pomegranate

I am prepared to pay extra for a premium soft drink (ie those

that are slightly more



such as Shloer,


Ginger Beer) % % % % %


31 34 33 31 23


29 27 30 26 24


33 28 24 25 13




34 30 31 26 15


35 31 32 25 20


35 31 32 32 21





34 30 31 29 21


23 31 21 27 19





39 37 28 31 23


16 29 14 30 12

O2 34 29 31 28 21 Orange 32 30 30 31 20 Vodafone 32 31 27 29 25 T-Mobile 29 31 32 32 26 Virgin Mobile 32 30 28 19 12 Other (eg Tesco)* 39 35 32 26 19 TV reception: I have digital satellite (BSkyB) 36 34 33 29 23 I have digital cable (Virgin Media)

38 28 33 29 21


Appendix: Research methodology

Appendix: UK Research Methodology Carbonated Soft Drinks UK, June 2011


Appendix: UK Research Methodology

Mintel Group Ltd is an independent market analysis company that prides itself on supplying objective

information on a whole range of markets and marketing issues.

There are three main sources of information and research stages used in the compilation of

Mintel reports:

consumer research, where exclusive research – quantitative and qualitative – is conducted

for individual reports as well as drawing upon non-exclusive large scale surveys

interviews (usually conducted by telephone), both formal and informal, with relevant

members of the trade

Mintel Information Consultancy and market size and economic database

Reports are written and managed by analysts with experience in the relevant markets.

Consumer research

Exclusive and original quantitative consumer research is commissioned for almost all Mintel reports.

In addition, qualitative research is also undertaken for a large proportion of reports in the form of

online focus groups. Mintel invests a considerable sum each year in consumer research, and the

purchaser of a Mintel report benefits, as the price of an individual report is less than the cost of the

original research alone. The research brings an up-to-date and unique insight into topical issues of

importance.

Consumer research is conducted among a nationally representative sample of either adults or internet

users and is generally carried out by BMRB (including BMRB Online), Ipsos Mori, GMI or Toluna.

Other suppliers are used on an ad hoc basis as required. The results are only available in Mintel

reports.

Sampling and weighting Kantar Media UK Ltd OMNIBUS Face to Face Surveys

Kantar Media UK Ltd Face to Face Omnibus samples 2,000 adults weekly using a random location

sampling technique. This is a single-stage sample design, taking as its universe Sample Units, a

bespoke amalgamation of Output Areas (OAs - the basic building block used for output from the 2009

Census) in Great Britain. Sample units have an average size of 300 households. OAs are grouped into

Sample Units by CACI within ward and taking account of their ACORN characteristics. This sampling

system is as current as it could be in terms of the characteristics of the areas selected and the people

within them. There are additional quota controls on age (15-34, 35-54, 55+), on men ( working full-

time, not working full time), and on women (working full or part time, not working full or part time).

Interviewing is in home, face-to-face using CAPI (laptop computers).

Data are weighted to the correct population proportions to match both the TGI survey and the National

Readership Survey. A rim weighting technique is used in which target profiles are set for eight

separate demographic variables.



Online Surveys

The sample is drawn from the Lightspeed Research (a sister company of BMRB) online access panel

that has over 300,000 members in Great Britain. The online panels are recruited and maintained

according to rigorous standards to ensure quality and representative sampling thus allows for 1000

nationally representative online adults aged 16-64 to answer weekly online questionnaires.

.

A section of the Lightspeed panel can be drawn and invited by email to complete the weekly survey.

Quota controls are placed on the survey to ensure that there is no demographic skew in the sample.

Quotas are set to achieve a sample that represents the population of GB. Smaller sub-samples within

the overall sample can be achieved.

A variety of recruitment methods are used to build the Lightspeed panel. Panel recruitment is achieved

through multiple sources, although online is the main vehicle for acquiring panellists. Lightspeed

Research uses a variety of web portals and sites to ensure a balanced panel.

The panellists are incentivised by receiving Lightspeed Points every time they participate in surveys.

Once a panellist has earned 500 Lightspeed Points they can redeem them for £5 gift certificates.

Panellists can also allow their Lightspeed Points to build up and redeem them for bigger prizes.

Careful panel management is undertaken to ensure a responsive panel with 30-50% completion rates

being achieved through removal functions for panellists, proactively removing no longer valid e-mail

addresses; panel categorisation to identify ‘loyal’ and ‘inactive’ panellists so that panel attrition can be

reduced. In addition to this, panellists are not invited to complete surveys more than once a month and

not more than one topic per quarter.

Ipsos MORI

Ipsos MORI Capibus uses a two-stage random location sample design which generates a

very high quality sample representative of the Great Britain adult population. Interviews are

sampled from 145 Output Areas, randomly selected every week, and MOSAIC is employed to

set interlocking quota controls specific to each interviewer location. This ensures consistent

accurate representation of the locations interviewed every week. By using this proven sample

design, all sub-sectors of the population are represented – at a national and regional level.

All information collected on Capibus are then weighted to reflect the known profile of the

adult population in Great Britain. Capibus uses a rim weighting system which weights to mid

2007 census and NRS defined profiles for age, social grade, region and working status -

within gender. Additional profiles used include tenure and car in household, for example.

Because the sampling process is repeated every week, the Capibus sample is matched wave on

wave, making it ideal for taking successive measurements on the same issue.



GMI

GMI’s global online panels represent a community of high-quality, highly profiled, double opted-in

consumers and specialty panelists who are actively managed to specifically serve the sample needs of

the market research industry. GMI has its own proprietary panel, which, combined with the panel of its

approved network of vendors, provides reach to 10 million households around the world.

For general population research studies, GMI draws a sample from its global consumer panelist base

that is in proportion with the general population. Then, GMI sends an invitation to request panelist

participation in the survey. For clients with specific criteria, GMI pulls the sample based on the filters

set, and then distributes invitations on a random basis.

Panelists are typically invited to take part in a survey via an email invitation. At the client’s request,

panel members can also be directed to a client portal to complete a study, and then be passed back into

the GMI database to ensure MarketpointsTM are awarded directly to the panel member’s individual

account. This transfer is always encrypted to protect the respondent’s personal information.

Toluna

Toluna has embraced the social media concept and has developed ‘panel communities’ in

order to maximise member engagement and overcome the common industry problem of

declining survey response rates and multi-panel membership.

Today, Toluna’s unique online community consists of over 3.7 million consumer and

business-to-business panelists covering 33 countries. All of Toluna’s 33 proprietary panel

communities around the world are actively managed panels. Members are recruited from a

broad array of online and offline approaches that best represent the online community as a

whole in each country.

With stringent panel quality policies, Toluna ensures that all its panelists are recruited via a

double opt-in email process; daily checks are carried out for hard bounce emails and

duplicates; and panelists who provide inconsistent responses are removed from the database.

Confidence levels

Statistical confidence levels of + or – 2% or 3% can be applied to the data, depending on sample size

and percentage of respondents. For example, if 20% of a total sample of 1,000 adults say that they do

something, you can be 95% certain that the figure for the population lies between 17% and 23%. For a

sample of 2,000 adults, you can be 95% certain that the figure lies between 18% and 22%.

Consumer research is stored in a database supervised by Mintel's statisticians. Additional analysis of

information too abundant to be included in published reports may be available for an additional

charge.

Additional quantitative data are taken from Kantar Media UK Ltd’s Target Group Index (TGI)

surveys. The main TGI survey used is a continuous self-completion survey among a representative

sample of around 25,000 adults throughout Great Britain.



Unless otherwise stated, consumer research data are presented as penetration, i.e. as a percentage of

demographic sub-groups (usually in rows) such as age, e.g. 71% of 15-24-year-olds are moisturiser

users. Profiles are represented as proportions of the population, eg 8% of moisturiser users are aged

15-24 and, therefore, total 100%.

Population profile

GB population profile, by demographic group, 2009

Base: adults aged 15+

%

Men 49

Women 51

15-19 8

20-24 8

25-34 16

35-44 18

45-54 16

55-64 14

65+ 20

Yearly personal income:

Up to £2,999 7

£3,000 - £6,999 11

£7,000 - £12,999 17

£13,000 - £19,999 15

£20,000 - £26,999 10

£27,000 - £33,999 6

£34,000+ 8

Region:

North West 11

North 5

Yorkshire & Humberside 9

East Midlands 7

East Anglia 4

South East 20

Greater London 13

South West 9

West Midlands 9

Presence of children:

Yes 33

No 67

Working status:

Full-time – 30+ hours per week 36

Working – less than 30 hours per week

16



Not Working 48 SOURCE: TGI/MINTEL

Some reports contain qualitative research, either focus groups or in-depth interviews. Qualitative

research normally takes the form of an online focus group. Participants are mainly recruited via

Toluna’s online panel, although sometimes other sources are used.

Definitions of the main consumer classification systems used in the report are shown at the end of this

appendix.

Trade research

Informal trade research is undertaken for all reports. This involves contacting relevant players in the

trade, not only to gain information concerning their own operations, but also to obtain explanations

and views of the strategic issues pertinent to the market being researched. Such is Mintel’s concern

with accuracy that draft copies of reports are sent to industry representatives, to get their feedback and

avoid any misrepresentation of the market. These comments are incorporated into reports prior to final

publication.

Formal trade research is conducted in two ways which are not necessarily mutually exclusive:

Internally, Mintel’s analysts undertake extensive trade interviews with selected key experts in the

field for the majority of reports. The purpose of these interviews is to assess key issues in the market

place in order to ensure that any research undertaken takes these into account.

In addition, using experienced external researchers, trade research is undertaken for some reports.

This takes the form of full trade interview questionnaires and direct quotes are included in the report

and analysed by experts in the field. This gives a valuable insight into a range of trade views of topical

issues.

Desk research

The Mintel Information Consultancy, which contains virtually all the raw material for desk research

work, comprises: government statistics, consumer and trade association statistics, manufacturer

sponsored reports, annual company reports and accounts, directories, press articles from around the

world and online databases. The latter are extracted from over 280 publications, both British and

overseas. All information is cross-referenced for immediate access.

Data from other published sources are the latest available at the time of writing the report.

This information is supplemented by an extensive library of Mintel’s reports produced since 1972 and

added to each year by the 500+ reports which are produced annually.

In addition to in-house sources, researchers also occasionally use outside libraries such as the British

Library or the Department of Trade and Industry. Other information is also gathered from store and

exhibition visits across Europe, as well as using other databases within the Mintel Group, such as the

Global New Product Database (GNPD), which monitors FMCG sales promotions.



Sources

Where data are provided by a particular source then this is credited at the foot of a figure. Often

figures are sourced Mintel. This means that information is derived from a variety of points, such as

desk research and trade interviews, with the experience and expertise of a writer filling in any

information gaps or interpreting data so that it gives an accurate representation of the market and

ensuring the data are consistent both with other data in the report and between the whole array of

Mintel’s data.

The resources and knowledge at the writers' disposal allow for informed estimations of some market

parameters, which are then checked for their validity with the trade.

Data which are estimated have this reference because the original source data are only at the

estimated stage and not finalised or, as is often the case, where it refers to updates of government data,

‘est’ denotes that they were not available from the original source at the time of publishing.

Definitions

Socio-economic group

Socio-economic groups are based on the head of household or chief income earner and are defined as

follows:

Socio-economic group Occupation of chief income earner

A Higher managerial, administrative or professional

B Intermediate managerial, administrative or professional

C1 Supervisory or clerical, and junior managerial, administrative or professional

C2 Skilled manual workers

D Semi and unskilled manual workers

E All those entirely dependent on the state long term, through sickness,

unemployment, old age or other reasons

Retired persons who have a company pension or private pension, or who have private means are graded

on their previous occupation.

Students in higher education living at home are graded on the occupation of the head of the household.

Students living away from home are graded C1 (no account is taken of casual or vacation jobs).

Lifestage and Special Groups

In addition to the standard breaks, Mintel also analyses the consumer research in the following manner.

Lifestages are derived from analysis of the exclusive consumer research and are split into four main

groups, as follows. The following percentages are nationally representative. Internet representative

would differ slightly.

% of population

Pre-family/no family aged under 45 who are not parents 26

Family any age with at least one child aged under 16 still at home 29

Third age aged 45-64 with no children aged under 16 still at home 26

Retired aged over 65 with no children aged under 16 still at home 20

As part of an ongoing policy to find new ways of analysing data, Mintel has created Special Groups

of consumers to typify consumer habits in the early years of the 21st Century. Unlike the lifestage

groups, these groups represent only sections of the population and do not account for all adults.



% of population

ABC1 Pre/no family ABC1 Socio-economic group and in the pre/no family

lifestage

15

ABC1 Families ABC1 Socio-economic group and in the family lifestage 17

ABC1 Third Age ABC1 Socio-economic group and in the third age lifestage 14

ABC1 Retired ABC1 Socio-economic group and in the retired (65+)

lifestage

10

Two full-time earners couples where both partners work full-time 16

One person

households under 65

aged under 65 and living alone 10

Internet users all Internet users at home, work or elsewhere 73

Broadsheet readers read Daily Telegraph, Financial Times, Guardian,

Independent or the Times

15

Mid-market tabloid

readers

read Daily Express or Daily Mail 16

Popular tabloid

readers

read Mirror, Daily Sport, Daily Star or Sun 24

Satellite/digital TV

viewers

have satellite/cable/digital TV 82

Mobile phone users have a mobile phone 82

ACORN

Some reports also use consumer research analysed by ACORN category. ACORN is a geo-

demographic segmentation method, using census data to classify consumers according to the type of

residential area in which they live. Each postcode in the country can, therefore, be allocated an

ACORN category.

The classification is a more powerful differentiator of consumer behaviour than traditional socio-

economic and demographic indicators. The categories, and their components, are as follows:

ACORN category ACORN group % of population 2009

22.4

Wealthy Achievers – Category 1 A – Wealthy Executives 6.9

B – Affluent Greys 6.8

C – Flourishing Families 8.8

9.6

Urban Prosperity – Category 2 D – Prosperous Professionals 2.2

E – Educated Urbanites 3.7

F – Aspiring Singles 3.7

31.2

Comfortably Off – Category 3 G – Starting Out 4.6

H – Secure Families 17.8

I – Settled Suburbia 6.7

J – Prudent Pensioners 2.2



15.3

Moderate Means – Category 4 K – Asian Communities 1.22

L – Post Industrial Families 5.6

M – Blue Collar Roots 8.5

21.1

Hard Pressed – Category 5 N – Struggling Families 14.4

O – Burdened Singles 4.23

P – High Rise Hardship 1.2

Q – Inner City Adversity 1.3

SOURCE: TGI/MINTEL

Statistical Forecasting

Statistical modelling

For the majority of reports, Mintel produces five-year forecasts based on an advanced statistical

technique known as ‘multivariate time series auto-regression’ using the statistical software package

SPSS.

Historical market size data feeding into each forecast are collated in Mintel’s own market size database

and supplemented by macro- and socio-economic data sourced from organisations such as the Office

for National Statistics, HM Treasury and the Bank of England.

Within the forecasting process, the model searches for, and analyses relationships between, actual

market sizes and a selection of key economic and demographic determinants (independent variables)

in order to identify those predictors having the most influence on the market.

Factors used in a forecast are stated in the relevant report section alongside an interpretation of their

role in explaining the development in demand for the product or market in question.

Qualitative insight

At Mintel we understand that historic data is limited in its capacity to act as the only force behind the

future state of markets. Thus, rich qualitative insights from industry experts regarding future events

that might impact upon various markets play an invaluable role in our post statistical modeling

evaluation process.

As a result, the Mintel forecast complements a rigorous statistical process with in-depth market

knowledge and expertise to allow for additional factors or market conditions outside of the capacity of

the statistical forecast.



StatisticalModelling

Qualitative Insight

Mintel Forecast+ =Statistical

ModellingQualitative

Insight

Mintel Forecast+ =

The Mintel fan chart

Forecasts of future economic outcomes are always subject to uncertainty. In order to raise awareness

amongst our clients and to illustrate this uncertainty, Mintel has introduced a new way of displaying

market size forecasts in the form of a fan-chart.

Next to historical market sizes and a current year estimate, the fan chart illustrates the probability of

various outcomes for the market value/volume over the next five years.

At a 95% confidence interval, we are saying that 95 out of 100 times, the forecast will fall within these

outer limits, which we call the best and worst case forecast. These, based on the statistically driven

forecast, are the highest (best case) and lowest (worst case) market sizes the market is expected to

achieve.

Over the next five years, the widening bands successively show the developments that occur within

95%, 90%, 70% and 50% probability intervals. Statistical processes predict the central forecast to fall

within the darker shaded area which illustrates 50% probability, i.e. a 5 in 10 chance.

A general conclusion: Based on our current knowledge of given historic market size data as well as

projections for key macro- and socio-economic measures that were used to create the forecast, we can

assume that in 95% of the time the actual market size will fall within the purple shaded fan. In 5% of

all cases this model might not be correct due to random errors and the actual market size will fall out

of these boundaries.



Weather analogy

To illustrate uncertainty in forecasting in an everyday example, let us assume the following weather

forecast was produced based on the meteorologists’ current knowledge of the previous weather

condition during the last few days, atmospheric observations, incoming weather fronts etc.

Worst case (°C)

13

Mintel forecast (°C)

15

(°C)

10

Best case (°C)

17

4

6

8

10

12

14

16

18

20

WED THU FRI SAT SUN MON TUE WED THU FRI SAT

tem

pera

ture

in

°C

95%


90%

70%

50%

Actual Forecast

Est.

0

Now, how accurate is this forecast and how certain can we be that the temperature on Saturday will

indeed be 15°C?

To state that the temperature in central London on Saturday will rise to exactly 15°C is possible but

one can’t be 100% certain about that fact.

To say the temperature on Saturday will be between 13°C and 17°C is a broader statement and much

more probable.

In general, we can say that based on the existing statistical model, one can be 95% certain that the

temperature on Saturday will be between 13°C and 17°C, and respectively 50% certain it will be

between about 14.5°C and 15.5°C. Again, only in 5% of all cases this model might not be correct due

to random errors and the actual temperature on Saturday will fall out of these boundaries and thus will

be below 13°C or above 17°C.

(To learn more about uncertainty in weather forecasts visit:

http://research.metoffice.gov.uk/research/nwp/ensemble/uncertainty.html)

http://research.metoffice.gov.uk/research/nwp/ensemble/uncertainty.html

Need to know more about Mintel? To view a complete index of Mintel reports, or find out about the latest titles published please go to reports.mintel.com To find out how the whole range of Mintel products can enhance your business, visit the group site at www.mintel.com. To speak with our information team about any aspect of Mintel’s solutions please call +44 (0)20 7606 6000 (UK) or (1) 312 943 5250 (US) Mintel Research Consultancy For further analysis on this report, or to design a tailored report, contact Mintel Research

Consultancy on +44 (0)20 7606 4533.

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