Soft drink sales surge amid declining alcohol consumption in the UK
Despite the ongoing cost-of-living crisis, the UK’s eating-out market reached a turnover of £97.3bn in 2023, surpassing pre-pandemic levels for the first time. This represents a 6% increase compared to 2022. However, Britvic's Soft Drinks Review 2024 highlights a shift in consumer preferences, with fast food outlets benefitting from consumers trading down, while casual dining and pubs face more significant challenges.
One notable trend is the decline in alcohol consumption in the UK. Recent reports indicate that alcohol consumption has dropped by 16% over the past decade, with more consumers opting for healthier, non-alcoholic alternatives. This shift has significantly impacted the food service industry, where soft drinks are increasingly driving growth. Sales of soft drinks rose by 4% to £3.2bn in 2023, with volumes increasing by 0.8%.
More people are opting for venues based on proximity and menu choices, rather than going out specifically for a treat. The share of eating out in city centres and high streets grew by 1% in 2023, reflecting demand for quick meals, snacks and drinks. Despite challenges in casual dining and pubs, the soft drinks category has shown resilience. Britvic’s report indicates that consumers are not willing to compromise on quality, even though 76.3% identify as value-led. A significant 73% of consumers are willing to pay more for high-quality drinks, presenting a substantial opportunity for food service operators to offer premium drinks.
Dino Labbate, GB commercial director for hospitality at Britvic, commented: “Soft drinks are playing a more central role in many operators’ propositions. Just look at Itsu with its range of co-branded LA Brewery kombuchas. Not to mention Indian street food operator, Mowgli, which has developed its own range of signature mocktails, lassis and low and no offerings. We’re urging more food service operators to follow suit and adapt their approach to selling soft drinks to stay ahead of the curve.”
Britvic’s report also points to positive trends for food service operators. Daytime dining is on the rise, offering opportunities to enhance everyday drinks like coffees, milkshakes and smoothies. Soft drinks are increasingly important in lunch and snacking occasions outside the home, with nearly half of food-to-go lunch occasions and 39% of snacking occasions featuring soft drinks in 2023.
Labbate also highlighted the importance of value, with good value for money being a key motivator for 38.1% of consumers when choosing soft drinks. Special offers and discounts also play a significant role. Operators are responding by enhancing meal deals and digital loyalty programmes to stand out in a competitive market.
As the soft drinks category continues to adapt to changing consumer preferences, its value to the food service sector remains significant, providing opportunities for growth and innovation in a challenging economic landscape. The ongoing decline in alcohol consumption further amplifies the importance of low and no in meeting evolving consumer demands.
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