The soft touch

27 March, 2009
For many bakery outlets, soft drinks sales are an afterthought. But Catherine Quinn discovers how well-chosen products can drive sales and complement your USP
Page 28 

Walk into your average bakery outlet and, nine times out of 10, you're confronted with a fridge full of familiar soft drinks courtesy of a well-known-manufacturer. And while these established products are often viewed as the prudent choice, it might be time to reassess your range. Not only can your drink extras create extra sales, they can also help enhance your brand identity and assure customers of your discernment.

The dilemma for many bakery retailers and cafés will be one of risking steady sales for unknown newcomers. After all, there is only so much space in the fridge, and substituting tried-and-tested classics could have the effect of lowering your takings rather than increasing profits.

"When you're looking at bringing in new soft drinks you have to decide whether what you're considering selling will support those you already have and complement and enhance existing sales," explains catering consultant Matthew Merritt-Harrison of Merritt-Harrison Catering Consultancy. "There's little point in putting in a new drink if it takes sales away from another, which brings you higher revenue. The idea is to have products on display, which will enable you to sell more overall and make imaginative offers for your customers."

This means you should think very carefully about why a customer might choose a product and what that could mean for your other sales. An iced coffee drink, for example, could fly out during the hotter months at the expense of your more lucrative latte and espressos, while a range of healthy smoothies could see your customers eschewing their daily bacon roll or pastry for a breakfast on the go.

That's not to say you shouldn't experiment, and keeping track of new sales needn't be as difficult as you think. "There are a number of simple and cost-effective EPOS systems out there, which can help you keep track of what's selling well," explains Merritt-Harrison. "But even if you're just keeping track of things manually, it shouldn't be too difficult to make a quarterly review of what is and isn't selling."

In fact, mixing up your soft drinks offering can be a dynamic way to bolster profits, particularly if your selection includes little-known brands that prove key sellers. "Bakery retailers cannot really compete on price when it comes to the big-name soft drinks," says Anita Doran of the Hibiscus Drinks Company. "They're pitting themselves against supermarkets or corner shops, which have greater power to buy in bulk and are always going to be able to out-do you on price. So the danger is that you could stock these products and customers will go down the road to buy the cheaper alternatives."

Instead, Doran recommends bakery retailers give serious thought to the plethora of unique drink options produced by smaller outlets, dedicating a 50:50 or even 60:40 percentage split in favour of little-known brands. "Not only can these drinks offer a good point of difference, but they usually offer a higher mark-up as well," she explains. "They can also help enhance your brand and mark you out as a retailer who has discernment regarding your soft drink choices."

When it comes to balancing your stock of big names and lesser-known brands, the trick is to aim for products that are well enough known to benefit from brand awareness, but not so widely sold that you can be undercut by the local supermarket. Your choices can also play a part in marking you out as a particular kind of retailer.

 

The healthy option

So if you're looking to be known for selling high-quality food with good, healthy options, then a range of sophisticated health drinks can do wonders for your image. Key sellers in this area include FireFly's 'tonic' drinks, vitamin waters by V Water and Funkinwater, and adult-style fruit drinks, such as those produced by the Hibiscus Drinks Company and Bottlegreen Drinks.

In contrast, if you're looking to take a slightly different route as a contemporary retailer, there are a number of new energy drinks on the market, which could help identify you as the perfect stop for the morning after the night before. Currently, drinks using herbal ingredients as boosters rather than taurine and caffeine seem to be selling well with newcomers like RockStar, using guarana and ginseng to give a natural lift.

If you haven't seen these products on your wholesaler's listings and you're waiting for them to arrive, you're missing a trick, says Doran. "Bakeries often don't realise the power they have to demand certain products," she says. "Wholesalers stock what their customers want to buy and it's often difficult for them to take a chance with a new drink if no-one is asking for it. Most of the time, if you see a new drink that you'd like to try out, you can ask your wholesaler and they'll be only too happy to add it to their list."

So if you've been waiting for the moment to try something new, but haven't seen anything interesting on the stock list, perhaps now is the time to do some of your own research and get proactive about what you want to see in your drinks fridge.

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=== Filling your chiller ===

Most popular impulse purchased soft drinks (value sales)

£m % share % change

1 Cola 515 28 -2

2 Glucose stimulant drinks 314 17 10

3 Fruit carbonates 176 9 -7

4 Juice drinks 169 9 -10

5 Pure juice 149 8 0

6 Plain water 141 8 -11

7 Sports drinks 96 5 -1

8 Dairy & dairy substitute 66 4 -5

9 Non-fruit carbonates 62 3 0

10 Squash 60 3 -4

11 Lemonade 36 2 -3

12 Water plus (eg vitamins) 42 2 -13

13 Traditional mixers 20 1 -1

14 Smoothies 14 1 -17

15 Cold hot drinks 2 n/a -15

Note: Impulse data includes food-to-go retailers, such as bakeries and sandwich shops, but also forecourts and independent grocers, hence listings of products such as squash. Plain waters are in decline, reflecting consumer ethical concerns; juices and smoothies have declined, suggesting consumers maybe trading down; the strongest growth was seen by glucose and stimulant drinks and sports drinks, highlighting consumers' continuing desire for functional benefits Source: Britvic Soft Drinks Report/Nielsen, March 2009

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=== Stocking the big brands ===

For most bakery retailers there's no escaping the fact that well-known soft drinks come with a number of key advantages - with free branded refrigerator equipment to boot.

Big brands have their fingers firmly on the consumer pulse, and are well-placed to cater to the upcoming trends, which is why Coca Cola has launched key new products this year with the 'healthy natural' trend in mind. Among them is Relentless' Juiced Energy Berry - a drink that neatly coins both natural and energy drink benefits. And with a multi-million-pound marketing spend behind it, the drink can hardly fail to catch consumer attention. Coca Cola is also ploughing extensive investment into its Diet Coke and Powerade marketing campaigns, gaining sponsorship deals with top rugby players for the latter.

"Retailers should offer a range of soft drinks to suit their local customers and flag the category with key brands such as Coca Cola and Relentless," advises Donna Warren, impulse shopper marketing controller at Coca Cola Enterprises. "Displaying new brands or promotions at other impulse points in the store as well as the cooler is also likely to drive sales."

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=== Targeting a niche ===

Southover Food Company launched a "beauty enhancing" drink at IFE, targeting women. Sip is a range of flavoured still waters marketed as 'a beauty treatment in a bottle'. The pure still water includes nutrients said to improve the skin, and markets the benefits of antioxidant vitamin C, white tea tincture, selenium, and extracts of rose petal, marigold, sweet violet, linden blossom and Scottish heather blossom tops. It is available in four flavours: Elderflower; Ruby Orange; Mango; and Lemongrass & Ginger, and comes in 12 x 500ml cases at £17.14.

www.southoverfoods.com





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