Pubs' natural premium

LONDON - Healthier soft-drinks brands such as Feel Good are gaining favour in the on-trade.

The Feel Good drinks deal with pub company Orchid Group is an early indication that the UK's on-trade is starting to respond to consumer demand for healthier non-alcoholic offerings.

Sitting alongside Britvic's J2O juice drink, the Feel Good Drinks range, which contains no added sugar or artificial ingredients has recently been rolled out in pub-friendly 275ml bottles. Industry experts predict that J2O could be dropped by pub chains.

While the range of healthier food and drink options has been growing across retail channels for some time, the on-trade has been slower to respond to this trend. However, as more pubs are now catering for families and becoming 'food-led' rather than 'wet-led', they have had to widen the choices available to their customers.

Falling sales

Publicans are also keen to arrest a dip in their sales of premium soft drinks; according to Nielsen, in 2009 the value of the on-trade juice-drinks category decreased by 2% to £228m.

Sales of market-leader J2O also fell 2%, to £174m, with a 6% drop in volume. This was despite an overall rise of 3% in on-trade sales of soft-drinks to £2.4bn, following a decline in 2008.

Meanwhile, Mintel research in October found that 83% of UK adults surveyed believe that pubs should stock more healthy drink options.

Orchid's decision to introduce Feel Good alongside J2O was partly based on the amount of sugar and artificial additives that the Britvic range contains. By contrast, Feel Good highlights that each serving contains one of the recommended 'five-a-day' portions of fruit and vegetables.

David Gwilliam, senior purchasing manager at Orchid Group, says: 'Being made with 100% natural ingredients and with no added sugar or nasties, Feel Good will become our leading juice-drinks brand.'

Ben Perkins, a senior consumer analyst at Mintel, believes that more chains will follow Orchid's lead. 'Consumers are overwhelmingly in favour of (healthier soft drinks),' he says. 'These drinks are generally made from fresher and better-quality ingredients, but still have only a tiny penetration in the on-trade market.'

It is also understood that major pub chains, including Young's, are in discussions with Feel Good about stocking its 275ml variants.

Perkins believes that the range has an allure that extends beyond J2O drinkers. 'It has a fun, honest and optimistic positioning, which should appeal to customers,' he says. 'It was founded by ex-CCE (Coca-Cola Enterprises) people who understood the market and recognised a gap before many others.'

Increased competition

Perkins warns smaller independent brands that the bigger players are not likely to stand idly by as their market share is eroded; Coca-Cola now owns a majority stake in Innocent.

'The likes of Britvic and CCE are too savvy not to get involved,' he adds. 'They will be the ones who really grow this market in the on-trade, either through new product development or acquisitions, as they dominate distribution.'

According to Mike Hastings, director of communications at the British Beer and Pub Association, the on-trade will become more open to premium drinks ranges.

'We'll start to see an expansion of ranges in soft drinks, with (products such as) smoothies appearing more,' he says. 'It creates points of innovation and difference, which appeal to consumers and benefit pubs.'

Competition for the healthier premium soft-drinks category within the on-trade is likely to be fierce. The big players will certainly want to up their game, but independents such as Feel Good have already stolen a march. All eyes are now on CCE and Britvic to see what they will do next.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer