When you take into account all these factors, it should come as no surprise that juices and waters account for a massive share of the take-home soft drinks market.

According to Britvic's Soft Drinks Report 2008, sales of still juice were worth just over £1bn in 2007 and accounted for 17% of the market, which made the sector second only to cola (with a 21% share worth £1.2bn). However to the still juice figure you can add juice drinks, worth £671m, and smoothies, worth £4m, which takes the whole juice category up to 32% of the market.

However, there is a marked difference in some of the sales figures when you look at independents alone. Independent retailers seriously over-trade in cola, for instance, which accounts for 21% of sales in the total take-home category but 28% in independent outlets. However they under-trade in juices. Still juices accounted for just 4% of sales in independent retailers in 2007 but 17% in the total market. But independents do better than average in juice drinks, which take 12% of sales versus 11% in total take-home.

Meanwhile 'plain' water accounted for 8% of the market last year, worth £463m while 'water plus' added another 3% worth £154m. But while total take-home sales of pure juice and juice drinks were up, sales of water were down. The bad weather last summer burst water's growth bubble.However, rather ironically, the floods and resulting damage meant bottled water was shipped into some areas which did give a boost to sales. Earlier this year the bottled water industry was struck a further blow when a BBC Panorama programme questioned the products' impact on the environment and there has also been the Evening Standard's 'Water on tap' campaign encouraging restaurant-goers to ask for tap water instead of buying bottled.

But it's not all bad news as Zenith Market Intelligence director, Gary Roethenbaugh explains: "Despite such a disappointing summer, the role of bottled water in emergency situations and the surge in ethical waters highlighted new areas of consumer resonance. And despite increasing beverage choices, bottled water has retained particular popularity in school lunchboxes, on the dinner table, at the gym and for hydration on the go. Its purity and zero calorie virtues should continue to drive the market forward."

And according to Zenith's 2008 water report, any negative influences during 2007 were negated by an increased acceptability of water as a "real alternative to soft drinks" and the increase in sales of pack formats designed for consumption of water on the move.

Britvic's business unit controller for take-home wholesale, James Russell, adds: "While consumption fell during 2007 due to the worst summer since records began, water as a category still has a lot of potential in the UK, judging by its market share in other European countries such as France and Germany where it accounts for over half of the market volume.

"Performance in 2008/9 will be partially weather dependent but functional water, which offers added benefits such as vitamins or energy, looks set to increase in importance. In 2007 functional water accounted for sales of just £2m - but that was almost double the previous year's performance (up 94%) and functional water looks set to become increasingly important."

in the Wholesale channel

Britvic's Russell says cash and carry and wholesale is a key channel for the company as it offers them access to over 250,000 outlets.

"Specifically for Britvic the sector offers us a growth opportunity in independent shops versus our scale in the major multiples and this is a key part of our growth plan for the future.

"The wholesale channel is like a shop window for our business. Communicating and selling our products to the huge number of diverse independent retailers would be incredibly difficult without the unifying opportunity wholesalers provide. Working in close partnership with the wholesale channel is very important to us as wholesalers are effectively selling our products to retailers for us."

He reckons wholesalers have a real opportunity to deliver added value to retailers and manufacturers by driving the success of new product development. "If wholesalers can build on their current success at executing NPD activity and bring it in line with the grocery channel they and Britvic will reap the rewards. We are working closely with our wholesale partners to capitalise on NPD opportunities and pass on our investment to the end user."

Meanwhile Darren Goldney, sales director wholesale, at Coca-Cola Enterprises, says: "By ensuring the best range, display and availability is implemented in depot, wholesalers can drive frequency and purchase.

"We are seeing an increased consumer focus on wellness, so while it's important to flag the soft drinks offering with brands such as Coca-Cola, retailers also expect to find well-merchandised juice and juice drink choices such as Oasis and Capri Sun, along with water such as Malvern."

Fruitful times

Speaking specifically about juices, Britvic's Russell says: "Health and wellbeing and the increasing availability of juices in a convenient single serve format are important drivers for the sub-category while exciting, exotic new flavours allow consumers to indulge themselves. Consumers are increasingly aware of the five-a-day principle to stay healthy and are increasingly turning to fruit juice as an option when they're on the go."

He adds it is imperative that wholesalers provide a good balance of products across the juices sub-categories and not just the best sellers and traditional orange and apple juice variants. "By taking a category focus and examining what sells across the impulse channel as a whole, rather than just on sales in independents, wholesalers can really push the soft drinks category forward and increase profits along the way."

Private label still dominates the pure juice market, taking 60% of total value. The biggest juice brand is Tropicana with sales worth £246m, followed by Innocent, which is worth £141m.

Earlier this year Tropicana entered the smoothies category with a five-strong range. The aim was to build on Tropicana's reputation for premium juices, introducing loyal juice consumers to smoothies, while also attracting new smoothie drinkers to the sector. Brand owner PepsiCo hopes the launch will make smoothies more mainstream, replicating the success Tropicana had in widening the appeal of not-from-concentrate juice.

The latest activity from Tropicana sees the brand giving consumers the chance to 'book one night, get one night free' at prestigious bed and breakfast locations. The promotion ties in with the 'Wake up to Tropicana' advertising campaign.

Tropicana's senior brand manager, Ben Curtis, explains: "We believe this promotion will have huge impact as it offers genuine value to the consumer, and will further consolidate Tropicana's position as the UK's preferred juice brand."

The promotion is running on the Tropicana Pure Premium range except convenience price-marked packs, 75% extra free packs and single serve formats.

Meanwhile Innocent is widely available through delivered wholesale in the likes of 3663 and Brakes as well as through the main regional companies. The company is now concentrating on building its presence in the cash and carry sector. Out-of-home team leader Tim Roberts says he's passionate about getting involved in the sector and working with depot managers. "We're in Makro and Costco and we've just started working with Booker and Bestway. We've done price promotions in Bestway to encourage more outlets to try selling the products.

"We are also working on our cases. There are thousands of lines in cash and carries and your product needs to jump out so we're working hard to find different case solutions. We're currently trialling branded chillers in depots to see what impact they have. We're also 'pimping' cash and carries with point of sale material." He says the company recently changed the case size of its one litre packs from twelve to six to make them more cash and carry friendly.

The Innocent smoothies are short shelf life products but Roberts says they go into depots with plenty of shelf life on them. The best sellers are Strawberries & Bananas and Mangoes & Passion Fruit.

One company that is already doing particularly well in the wholesale sector is Rubicon. Chief operations officer Nitin Menon reports that, year on year, it is seeing double-digit growth. "We have a strong heritage in the cash and carry/wholesale market because that is where we started 26 years ago. It has proved a strong foundation for the business and we continue to build good working relationships with the sector."

As Innocent has found, it can be difficult to get your brand to stand out in a huge warehouse but Menon says his company has done this with the use of bold and bright 'fruity' packs and outers, which enable customers to shop the fixture by colour. "Further sales are driven by bespoke 'exotic-ly' branded bays and towers which direct the retailers to our fixture. When we're running promotions we utilise off-shelf displays, featuring eye-catching pallet wraps and other attention-grabbing POS to maximise sales.

"When we launched Sun Exotic fruit paradise we supported it with a rich in-store promotion offering both the customer a strong deal and the consumer an incentive to purchase, resulting in a fast pull-through. The activity featured in retailer PLOFs and was highlighted in depots with eye-catching displays featuring pallet wraps."

Menon says that during the year Rubicon offers price-marked promotions across its one litre Tetra Paks, its cans and PETs to encourage trial as well as reward loyal consumers.

"We are also investing heavily in the brand with national TV advertising, PR and promotions. During June the brand championed National Mango Week, which was supported by national TV and outdoor advertising as well as heavyweight national PR and sampling activity. The week was overlaid with trade promotions to ensure everyone benefited from the buzz created around the health benefits of this tasty fruit. The activity drove huge volumes for the brand, contributing to the brand's highest ever market share."

He explains that Rubicon's core exotic juice drink flavours, Mango, Guava and Passion Fruit, have traditionally been the big sellers for the company but adds: "More recently we have seen strong sales results for our new pomegranate and papaya juice drinks. The papaya drink has a high lutein content so we are working with the Eyecare Trust to raise awareness of the importance of a diet rich in lutein to eye health."

Menon says these products have built on the consumer trend for functional drinks, which not only taste great but also offer health benefits. With this in mind, packaging has been redesigned to emphasise the inherent health benefits of each exotic fruit. For example, guava promotes the high level of lycopene contained, lychee focuses on zinc, and passion fruit highlights provitamin A.

Meanwhile Ocean Spray is currently running a 99p price-mark pack promotion in cash and carry and wholesale depots. And, for the first time this year, its Cranberry & Pomegranate variety is being included. Gerber Juice Company UK trade marketing manager, Martin Jones, explains: "The move follows requests from the trade, and will help independent stores to better meet the health trends of the consumer, offering a 'superfruit' blend at a competitive price. We are also carrying out tastings in depots, and a number of these are planned to support the launch of our 250ml PET bottle."

He says that across cash and carry and wholesale Ocean Spray sales are up 5% year-to-date compared with last year (ex-factory data to July 12, 2008). "This growth is being driven by a combination of TV and press advertising and a strong promotional programme. Our creative campaigns, which bring to life our 'helps protect you inside' message, have taken awareness of Ocean Spray to new heights with latest feedback returning 91% prompted brand awareness.

"We expect our new 250ml on-the-go size to further grow our share of soft drinks in the impulse category. Each bottle contains the optimum serving of Ocean Spray cranberry's antioxidants and natural compounds, to provide up to 10 hours of inner health protection."

Pomegreat has also taken the price-marked route with the launch of a new pack of Pomegreat Original 12x1litre exclusive to the cash and carry sector for this summer. Every bottle is marked at £1.39, and the outer carton is clearly marked in depot and offered to retailers at a specially discounted price.

Pomegreat marketing director Rob Sutton comments: "Increasing numbers of cash and carries are stocking the brand and investment in promotional activity has gone up to meet the increased demand."

A new entrant in the pure juice category comes from juice drink Ribena with its Ribena 100% Pure Juices. The drink is available in two berry flavours: Blackcurrant Blend and Raspberry & Blackberry Blend. They contain no added colours, flavours or preservatives and only the sugars that are naturally present in the fruit. They are naturally rich in antioxidants and each 250ml serving counts as one of your five-a-day.

The juices come in 250ml bottles, RRP £1.19 and one litre Tetra cartons, RRP £1.59.

Not every retailer has masses of chiller space in their storeroom, which is why the launch of ambient smoothies is such good news. Independents can store these out the back, putting them in the chiller on the shopfloor prior to sale.

Barr's ambient St Clements range contains no additives, preservatives or added sugar. It comprises Orange and Apple juice in 330ml PETs as well as three smoothies: Cranberry & Raspberry, Strawberry & Banana and Mango & Passion Fruit, all in 250ml resealable cartons. Since the range was launched last September, over three million cases have been sold. This July saw the addition of a new one litre pack of Orange and Apple juice, while August sees the launch of an exotic 330ml PET.

Another new ambient smoothie on the market is Sweetbird, available in the UK from Beyond the Bean. The Sweetbird 100% real fruit smoothies have a shelf-life of at least three months. There are three varieties: Orange & Mango, Pineapple & Passion Fruit and Blueberry & Blackberry, all of which contain no added sugar, preservatives, GMOs, artificial flavours or colourings. Beyond the Bean is currently in discussion with several large wholesalers about stocking the Sweetbird range.

Functional drinks company Boost also has a new ambient smoothie. It comes in two flavours: Strawberry & Banana and Orange & Mango. A marketing campaign will use a 'fuelled by nature' theme.

Boost Drinks managing director Simon Gray comments: "The smoothie market is now very competitive and price, brand and overall image are three key factors driving growth in the sector. It is important that wholesalers are aware of this when selecting suppliers and product."

Abbey Well has a new pouch juice drink that contains a straw, which is only revealed on opening. All variants are made with juice from concentrate and no additives. The Apple and Orange pouches are 100% juice, while the Raspberry, Blackcurrant and Tropical are blended with water and to ensure each pouch contains one of your five a day, they have a juice content of no less than 75%.

Eau zone

Liz Forte, shopper marketing manager at Danone Waters, reckons that over the next 12 months there are two key focus areas for the water industry: "First we need to restore the momentum of the category. Last year's poor summer weather meant that the category did not benefit from its typical surge in penetration. We need to get those consumers back into the category, and back into the habit of buying bottled water.

"Second we need to ensure that consumers are fully informed about the choice that natural mineral and spring waters provide. They are, by law, naturally pure, and undergo no chemical treatment. In this respect, they offer consumers a very different proposition to tap water. It's now well understood that good hydration is essential to health and wellbeing. In on-the-go situations bottled water is, of course, the accessible and convenient solution for those who are looking for pure and simple hydration.

"These are important messages for us to continue to get across, both to restore category momentum, but also to counter the emotive environmental arguments about our industry that circulate in the media from time to time. We are committed to providing consumers with a quality product, and to ensuring that, in doing so, we apply the highest level of environmental responsibility."

Danone Waters is by far the biggest bottled water manufacturer in the UK, with its brands - including Evian and Volvic - accounting for almost 40% of total sales.

According to Nielsen figures, Evian is the UK's best selling water brand with a 17% share of sales, followed by Volvic with a 13% share.

Evian kicked off 2008 with its Detox campaign and this was followed by a high profile presence at Wimbledon where the brand will be the official bottled water of the tennis championships for at least the next five years.

Meanwhile Volvic is currently backed by the '1L-for-10L' campaign in partnership with international relief and development charity World Vision. For every one litre of Volvic sold in the UK, Danone Waters and World Vision will generate 10 litres of clean and safe drinking water in communities across Africa through the provision of mechanised wells.

And Volvic Touch of Fruit has recently been reinvigorated with a new label design aimed at boosting on shelf-appeal. Liz Forte comments: "Along with the label change, we have introduced coloured caps to further reinforce both the range and flavour differentiation in-store. Strawberry original now has a red cap while Lemon & Lime variant has a yellow cap. The sugar free range will remain in the iconic blue caps."

Last year Danone introduced a field sales force to call on 9,000 independent retailers. This year it is extending this to call on 14,000 independents. The force's main priority is to drive distribution of the company's brands but it will also address space allocation problems, particularly in the summer when this can really become an issue. The company reports that in tests in independent stores, where water is traditionally under spaced, once the issue was addressed total soft drinks category sales grew by 8%.

Danone has also launched its 'Weatherman' service to independent retailers. This is a weekly email sent to retailers which details the week's weather forecast and the corresponding bottled water sales predictions.

Of all soft drinks, the weather makes the most impact on bottled water sales. Danone says that taking 14°C as a base, when the sun is shining and temperatures reach 20°C, sales will typically rise by 36% and when it reaches 25°C sales will increase by 78%. If the temperature tops 30°C bottled water sales typically increase by 125%, making it imperative for retailers to keep an eye on the weather forecast.

Liz Forte comments: "At Danone we want to work in partnership with independent retailers and this weekly Weatherman email is a useful tool and could help them make a massive difference to their profits. We always strongly recommend retailers stock up when it becomes hot and sunny but the Weatherman email service details exactly when that happens - and how much more water retailers can expect to sell as a result."

Britvic's Drench experienced a 51% uplift in sales in the impulse channel during 2007. The brand is currently supported by a new marketing campaign featuring Brains from Thunderbirds which reinforces the benefits of drinking Drench via a new tagline 'Brains perform better when they're hydrated - your brain is 75% water, stay drenched.'

Britvic has also added V Water to its portfolio through its exclusive bottling agreement with brand owner PepsiCo, which acquired the brand in May.

V Water is made from spring water with a combination of vitamins, herbs, minerals and natural flavours to suit different occasions and moods. The flavours include: Glow (pomegranate & blueberry); Kick (ginger & mango); Vital V (orange & passionfruit) De-stress (green tea); and Shield (lemon & lime).

Russell says: "V Water is a great addition to stores in the impulse channel. With additional marketing spend being focused on functional water, the sub-category is likely to continue to grow and presents a real opportunity for retailers to increase profits."

One brand that is doing very well in cash and carries is Highland Spring. According to figures gleaned for the Zenith Bottled Water Report 2008, the brand outperformed the bottled water market in 2007 and was the only one of the top three brands to have shown growth. And the company is obviously confident that this upwards trajectory will continue as earlier this year it announced a £30m investment in its Blackford bottling plant.

A spokesman for the company says: "Although the water category in the cash and carry sector declined by 10.8% in 2007, the decline was mainly attributed to poor summer weather and the poor performance of flavoured water. In 2007 Highland Spring outperformed the market and all major competitors in the cash and carry sector, outselling its nearest competitor by nearly 2:1. In addition Highland Spring 500ml is the number one SKU in the cash and carry sector and accounts for 14% of all volume sales within the market and was the only 500ml screw cap in growth (up 1% in 2007)."

Nestlé Waters has been working closely with the wholesale channel and was a major supporter of National Independents' Week with a money-off voucher in the Daily Mirror/Daily Record NIW supplement and staff helping out in participating stores.

Mark Arnold, senior business development manager, says: "The wholesale channel is a very important channel for Buxton, Vittel, Perrier, S. Pellegrino and Acqua Panna as it allows the brands an essential route to market to the thousands of independent retailers, hotel and catering customers across the UK. Nestlé Waters supports this channel with on-going flash packs, promotions and key sponsored events."

Cash and carry and wholesale is also a key channel for Strathmore Spring where, according to Nielsen figures, it is growing share and driving sales in both the on trade and impulse channels.

Strathmore remains the number one water brand in the on-trade and is outperforming the market by achieving year-on-year value growth of 70% in total impulse.

The brand is backed by TV and cinema advertising in Scotland through the summer, which will be followed by a re-launch with a new label design across PET and glass packs.

Waterbrands managing director Paul Martin says his company does very little in the way of promotions for wholesalers or retailers, preferring instead to offer ongoing favourable margins.

When it comes to choosing which brands to stock, he says wholesalers should recognise that consumer behaviour is changing as a result of increased environmental and ethical awareness. "Shoppers are no longer making their choices based on price but on the impact they believe a product has on the world around them. Waterbrands' commitment to running its business in an environmentally-friendly and ethically sound manner is gaining a loyal consumer following."

Its Thirsty Planet brand has attracted significant loyalty since its launch in March 2007, and now boasts a 65% volume share of the charity water sub-category (Nielsen Scantrack, 27/10/07). It makes a guaranteed, specified donation to the charity Pump Aid for every bottle sold, with the aim of bringing clean, safe water supplies to 10 million people in Africa by 2015. In the past 15 months, it has raised enough money to supply more than one million people with water, with sales of Thirsty Planet funding a pump every six hours.

Abbey Well is a brand dedicated to the delivered wholesale and foodservice sectors. The company provides regular promotional activity to support wholesalers comprising stock deals for its direct customers and sales incentives for its telesales and field sales teams. In addition, it generates transfer orders for wholesale customers from its own sales team. Stock deals are supported with branded fridges and vending machines and, according to trade marketing and national account manager Margaret Johnson, when the company works with delivered wholesalers it adds incremental sales.

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=== wholesale perspective ===

Soft drinks sales to independents are up 2% to June, with energy drinks and colas driving this growth. Water is down 12% while juice is holding level in independents. Landmark Group's overall branded water performance is down 8% to the end of June while juice is up 1% based on 2007 figures.

Water

The water category is dominated by key brands - Volvic sports cap bottles are up 41% and Evian 500ml up 37%. Our members are actively working on displays with the major suppliers. Lifestyle water 500ml sports cap has maintained its growth (+22% for the year to date). However the water market is waiting for a period of sustained (10 days) hot weather to ensure water purchasing is habitual in retail.

Fruit Juice

Just Juice one litre maintains its number one position thanks to its status as an exclusive brand for the sector with Lifestyle litres at number two, serving the needs of our 1,500 Lifestyle stores. Rubicon continues to do well with a healthy increase in the flavour sector. The foodservice arena has become more identifiable in wholesale and our members are providing for this sector with the CK brand of juice. Prices have stabilised on orange and have even fallen where over-supply exists. Apple is going up in price.

Outlook

With the hot weather for late July, both juice and water will respond positively. The supply chain needs to be ready for the upward surge of thirsty customers.

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=== Top 10 water by volume variance over last year ===

1. Volvic Still 24x500ml -2%

2. Vittel Still 24x500ml -54%

3. Highland Spring 24x500ml -16%

4. Volvic Still 12x1.5ltr -1%

5. Volvic Sports Cap 12x1ltr 41%

6. Volvic Touch of Fruit Strawberry 24x500ml 50%

7. Evian Water 24x500ml 37%

8. Volvic Touch of Fruit Lemon & Lime 24x500ml 3%

9. Buxton Still 24x500ml -16%

10. Lifestyle Still Water 12x500ml 1%

Water total -8%

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=== Top 10 fruit juices by volume Variance over last year ===

1. Just Juice Orange 12x1ltr -20%

2. Lifestyle Pure Orange Juice 12x1ltr 31%

3. Sunpride Tropical Juice 1ltr 9%

4. Rubicon Mango 330ml 29%

5. Sunmagic Orange Juice 24x330ml -5%

6. DelMonte Orange Juice 12 x 1ltr -16%

7. Lifestyle Pure Apple Juice 12 x 1ltr 29%

8. Kulana Apple Juice 27x200ml -6%

9. Lifestyle Pure Orange Juice 27x200ml 65%

10. Del Monte Fruit Burst 5 Fruits 12x1ltr 29%

Fruit Juice total 1%

Source: Landmark Wholesale's EIS

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