Laser discs, paper dresses and Betamax video recorders: all cutting edge technology - at the time - now confined to the annals of history. It's a lesson that should be remembered when predictions about the soft drinks market are discussed.
Experts believe that, in the not too distant future, soft drinks will perform a more "emotional" role, engaging consumers with sounds, aromas, textures and sensations.
Jake McCall, founder and president of Second Sight Innovation, says these drinks innovations "will stop the world for a moment, delivering total satisfaction".
This might include a 'turbo-fizz' dial feature on the side of a can that allows consumers to increase or reduce the amount of bubbles in their drink. Or it might be drinks that change colour or ones with devices that enable them to be served at the right temperature.
Julian Mears, Britvic's media manager, believes retailers and consumers will begin to see some level of interaction with products in the next five years. "This is really some element that personalises the drink to you - it might be a vending machine that reads your palm and produces a drink that meets your needs at the time," he explains.
In an increasingly health-conscious society consumers are becoming much more savvy about how what they eat and drink affects their bodies. This increased awareness has had a major impact on the soft drinks category in the last five years - and manufacturers believe it will continue to shape the market. Five years ago many sub-sectors were just a fraction of their current size - water, smoothies, energy-drinks, functional products - while carbonates still dominated. This is no longer the case: still products have overtaken fizzy, despite the high-profile launch of Coke Zero, which went some way towards propping up the colas market. Dubbed 'bloke Coke', the brand is already worth £50m [ACNielsen March 07] in retail sales value and was heralded by ACNielsen as "the biggest FMCG launch of the last three years".
"Well-known brands will always sell well," says Anita Huntley, head of marketing for CCE, "particularly within the immediate consumption opportunity. They are vital to the category overall as this segment accounts for almost one third of total category value." She believes success is due to a number of factors including increased brand awareness driven by advertising and promotional activity and "excellent" in-store display both on fixture and at the point of purchase.
Despite the instant success of Coke Zero, and continued success of other No Added Sugar (NAS) colas such as Pepsi Max and the Diet Coke range, the decline of flavoured carbonates (down 20% in volume and 24% in value between 2001 and 2006), means a change in balance between fizzy and still.
Still soft drinks continue to grow faster than carbonates, with pure juice and water now just behind cola as the most valuable categories in take-home (and, clearly, together now way ahead). It's a challenge - but also an opportunity for carbonates manufacturers.
Mark Jephcott, PR manager of AG Barr, which owns the Tizer and Irn-Bru brands, believes there will be "significant opportunities" for growth, including energy, low-calorie, unique flavours, smaller portion sizes and premium carbonates. Barrs has recently relaunched Tizer with 10% fruit juice and no artificial colours, flavourings or sweeteners, and the company's carbonates brands will see strong marketing support in 2007.
Other brands, such as Vimto, are expanding their ranges with a particular focus on developing NAS variants within their portfolios. In dilutables, for example, Vimto is the second fastest-growing brand, while, despite the decline in carbonates, Vimto sales are up 25%.
ACNielsen data shows the NAS category is up 2.6% compared with the 1.9% year-on-year decline in standard. "The speed of growth in NAS versus standard shows consumers are looking for lower-calorie variants of their favourite soft drinks brands," says Vimto brand manager Claire Nield.
But, as Mike Coppard, managing director of Shloer, admits: "There's a trend away from carbonates full stop, with still drinks now accounting for around 55% of the market."
He says people are more interested in new flavours, such as Acai and pomegranate, although some may prove a bridge too far. "A soft drink should taste nice and be refreshing - some of these stranger ingredients are not particularly pleasant to drink. If you want a soft drink, buy a soft drink; if you want a medicine, go to a chemist."
Soft drinks manufacturers threw their weight behind the better-for-you trend in 2006 with innovation and marketing spend focused around this area. Overall, soft drinks manufacturers invested £150m in marketing their brands in 2006, with CCE, Britvic, PepsiCo and Unilever contributing the most, with £61m between them. The health and well-being trend was also reflected in NPD last year from all the major manufacturers - a trend that will continue in 2007. Robinsons Fruit Shoot H20 was launched by Britvic in March last year, establishing itself as the leading kids' water drink; PepsiCo's Tropicana Go! Fruit juice drink achieved 6% penetration in its first six months; Unilever launched its first major brand in 12 years last May with AdeZ Fruit & Soya drink, which achieved 8% household penetration within its first six months.
Britvic recently announced that it is removing artificial flavours and colours from its Tango range, chiming in with the better for you trends, and tapping into mums' concerns. The brand is investing in £2m of marketing to highlight its new, more 'natural' image. Marketing director at Britvic Andrew Marsden said that research showed that removing artificials "does not sacrifice the taste of Tango".
In the take-home channel, soft drinks grew 8% in value to reach £5.9bn in 2006, continuing its lead as the largest grocery category [ACNielsen]. Its strong growth outperformed all other categories in the top 10 (with the exception of toilet tissue, which saw equal growth of 8%).
A look at the grocery industry over the past five years confirms that soft drinks sales have grown 44% since 2001, adding £1.8bn to the category - making it one of the strongest performances of all top 10 categories. Coca-Cola, Lucozade and Robinsons were the top three brands, while CCE and Britvic remained the top two suppliers.
Manufacturers were also helped by the weather (soft drinks consumption is still inherently linked to the performance of the British summer). 2006 saw the hottest summer since records began and was a key contributor to the fact that soft drinks sales were up 12% compared with the previous year. Water rose 11% to achieve £643m in sales. Growth was driven by big brands, such as Evian and Volvic, along with new brands targeting specific groups of consumers, such as Robinsons Fruit Shoot H20.
While there's no doubt the sun boosts sales, there are still challenges. In-store research by Shloer reveals that, of all shoppers who go into big stores, only 30% end up at the fixture where Shloer or other adult soft drinks are sold. Furthermore, of those that do arrive, only a third actually buy.
"More often than not, the position in store is what I'd call the 'tail-end' of soft drinks, ie the lowest footfall area of the fixture," says Shloer's Mike Coppard.
"There is very little in and around the fixture to educate or help people. We've been talking to retailers about what visual things, such as photography, can be done to highlight the products available in adult soft drinks."
Britvic's Julian Mears agrees. He says the important thing for retailers is to highlight what products are available for different occasions. "This means clearly indicating on aisles what's in those aisles, and making sure those retailers are close to the ongoing trends - and that they merchandise accordingly."
CATEGORY INSIGHT: The fruits of innovation
Smoothies are one of the biggest brand successes of the past few years, and have now gone mainstream
"Smoothies are the true drinks success story of the 21st century and are clearly no longer a niche market." So says Vivianne Ihekweazu, senior market analyst at Mintel, although the figures speak for themselves. By the end of 2006, the smoothie market was worth £137m, with consumption rising to 34 million litres in the UK. The market is lead by Innocent Drinks, which has a 68% share of the category [IRI Infoscan, March 07], worth £89m, well ahead of Britvic's PJ's and own-label. It's a success story not lost on Innocent's commercial director Giles Brook. "Across the board, people of all ages are trying to be a bit healthier and looking to do themselves some good in a quick and easy way." There's no clearer illustration of Innocent's mainstream profile than its recent decision to trial smoothies in McDonald's restaurants.
Healthy eating, and in particular the 5-a-day fruit and vegetable campaign, has been the driving force behind continuing rates of exceptional growth. With UK consumers increasingly health-conscious and, in light of growing concerns about obesity in adults and children, the smoothie market is set to see significant future growth.
"Busier lifestyles mean consumers have less time, so they are increasingly looking for on-the-go meal replacement solutions." NPD has seen Innocent launch a 'breakfast thickie' designed for just this purpose, while the demand for natural health saw the introduction last year of the Superfoods Natural Detox recipe. "Consumers are increasingly looking for drinks that taste good and that offer specific nutritional benefits," says Brook. "They want to try amazing new recipes that use unusual ingredients - they want to challenge their tastebuds." Innocent's 'smoothie of the month' line has included recipes such as beetroot, apples, pears & ginger, lychees and passion fruits and mangoes, coconuts and lemongrass.
Mintel predicts that, over the coming five years, volume sales increases will outstrip those in value sales as entrants into the market lead to a fall in the average price of a smoothie. Volumes will almost treble between 2006 and 2011, up 186% to almost 100 million litres, while value sales will rise 76%.
CATEGORY INSIGHT: Waking up body & mind
Sports and energy drinks are popular with time-poor professionals as well as athletes needing a boost
Sports and energy drinks are now big business. The category is worth £327m and is growing at 17% year-on-year, making it one of the fastest-growing soft drinks subcategories in value.
Dominated by brands such as Red Bull and GSK's Lucozade, the category splits into two main areas: sports drinks, which provide re-hydration and replenishment; and energy drinks - functional soft drinks designed to "revitalise" body and mind.
Unsurprisingly, sleepless nights and hectic days chasing the kids around the house have made energy and stimulant drinks an attractive proposition for many of Britain's bleary-eyed parents. Indeed, according to Mintel, almost half (44%) of British parents believe these drinks are a good pick-me-up, compared with just three in 10 (31%) of those adults without children at home.
There's also no doubt that today's 24/7 lifestyle is driving the sales of energy drinks, with volume having increased by 75% and value by some 71% since 2000. It's good news for retailers as values have been boosted by the fact that energy drinks command a substantial premium over other soft drinks.
"People want to get more out of their busy days and look at what they drink to help maximise this," says Caroline Jacomb, customer marketing and category manager at Red Bull. "Whether a person is playing football and needs quick re-hydration, or driving to work and need something to help them feel alert, the sports and energy drink category can help them meet that need."
Helen Tomlinson, GSK's category planning director, agrees: "Consumers are looking for more products with functional benefits. Brands with added vitamins, low-calorie variants and those that provide additional health benefits will be in highest demand."
To capitalise on demand in the sports drinks sector GSK has just launched Lucozade Sport Caffeine Boost. Developed in response to feedback from premiership footballers and elite runners, its high caffeine content (16mg/100ml) is designed to give an extra boost to consumers playing active sport. GSK is putting £10m behind its Lucozade Sport brand this year.
CATEGORY INSIGHT: The beauty of health
Juice brands are benefitting from consumers' desire to achieve their five-a-day in a variety of different ways
It will come as no surprise, given the nation's propensity for all things healthy, that pure juice and juice drinks was the second largest sub-category and third fastest-growing category in 2006, with value sales up 15% to top £1.1bn - just behind the cola category.
"Shoppers are looking at more ways to put fruit at the heart of a healthy lifestyle and hit their '5-a-day' target," says a Del Monte spokesperson. It's not just health that consumers are looking for, however, but interesting combinations of fruit. Together orange and apple still account for almost half of the market, consumers are experimenting with more exotic fruit juices. For example, last year's star performer, Pomegreat, grew 264%, adding £13.8m to the category and taking a 4% share of the market.
Despite its popularity, there's still more room for growth. Currently, 89% of households buy ambient juice, while 75% buy chilled juice [ACNielsen]. However, Del Monte research suggests that many adults - up to 40% - currently don't drink fruit juice and only a fifth of adults drink fruit juice every day. Del Monte suggests there are a number of reasons currently limiting category growth. "The juice category isn't laid out in store in a way that is easy to shop - or the way that consumers want to shop it," says a Del Monte spokesperson.
"Research shows that consumers talk about juice, rather than ambient or chilled juice. They shop the different fixtures based more on occasion and storage needs."
Other brands are also focusing on health credentials. Ocean Spray, for example, has increased the cranberry concentrate to 25% for it to make health claims.
"The key thing for Ocean Spray going forward is to talk to consumers about the brand and the health benefits of the cranberry," says Jamie Robinson, commercial director, Ocean Spray.
"There are a number of superfruits in the market but they predominantly position themselves on the back of their anti-oxidant content. Cranberry has a very high anti-oxidant content but also has additional benefits from other tannins."
WHAT THE BUYERS SAY
"Major growth is coming from water, healthier options and the sports drinks sector. In water, impulse formats such as sports cap bottles are driving the market. Consumers want innovation and the most interesting developments are from juices, water and health/dietary areas. Lucozade, for instance, is up year-on-year as a result of innovation in packaging and a clear marketing strategy focused heavily on sport.
Vitamin waters are now appearing in the UK but I don't think UK consumers really understand the concept yet.
We're also seeing more drinks with plant and fruit extracts and growth is coming from products with berry ingredients."
Lyana Doyle
Trading Manager, MBL
Has the number of customer complaints about the price of goods increased recently?
