The bad guy: juices & smoothies category report 2020

No comments

While it may not be a poison apple, juice has become a villain thanks to a flurry of negative press. How is it fighting back?

Forget the poison apple. If the Wicked Queen had really wanted to do away with Snow White, she should have turned it into juice. Because juice is fast becoming the bad guy of food and drink, thanks to a flurry of negative headlines that have even linked it to an early grave.

“Large glass of fruit juice a day increases risk of premature death, research suggests,” shouted The Telegraph last May. Two months later, The Guardian followed that up with the headline: “Sugar in fruit juice may raise risk of cancer, study finds”.

This flurry of negative press shows no signs of abating this year. In January an article from the Daily Express on visceral fat named fruit juice “one of the primary culprits to watch out for” due to its sugar content. Not content to stop there, it went on to list “other reasons to cut out fruit juice”.

All of which could help explain the downturn in sales this year. The juices & smoothies market fell 4.5% to £1,267.5m, equating to a near £60m drop [Kantar 52 w/e 4 November 2019]. Even own-label offerings, which typically draw in shoppers with lower prices, failed to remain in the black, with a £28.3m decline. Brands fared even worse, shedding £31.5m.

“The category has lost shoppers, and those who remain aren’t buying juice as often”

That’s been driven by lower volumes. “The category has lost shoppers, and those who remain are not buying juice as often,” says Kantar analyst Rebecca Watterson.

So, just how much is bad press to blame for juice’s misfortunes? What are the other factors dragging down sales, and where are the potential areas for growth?

The decline in juice isn’t as bad as it may first appear. After all, it is working against some tough year-on-year comparisons. “We’ve gone a little bit backwards, but we are lapping a particularly strong 2018,” explains Steven Hind, marketing director for PepsiCo’s juice brands. Despite its Tropicana losing £5.3m [Nielsen 52 w/e 25 January 2020], Hind insists there are “no huge concerns” with its performance. “We haven’t lost share.”

There’s no denying 2018 was an anomaly in many ways. The combination of a distinctly un-British hot summer and the CO2 crisis - which forced shoppers to consider alternatives to fizzy drinks - bolstered juice and smoothie sales. Value edged up 0.7% to £1,326.9m following years of decline [Kantar 52 w/e 4 November 2018].

The category fell back to reality with a bump in 2019, says Ben Parker, at-home commercial director at J2O owner Britvic. For him, that was the main culprit behind J2O’s £3m drop. “If you compare this year’s numbers to a more ‘balanced year’ like 2017, the brand is in growth,” he says.

Spilling sales: top 10 juice brands by value

Top ten juice brands

	Value (£m)	% growth
Innocent	272.6	6.6
Tropicana	208.9	-2.5
Ribena	80.3	-20.1
Naked	73.3	-0.2
Oasis	71.7	4.7
Capri Sun	61.9	-10.7
Robinsons	50.7	-0.5
Britvic J20	35.0	-8.0
Copella	29.5	-19.1
Vita Coco	22.0	0.0


Source: Nielsen 52 w/e 25 January 2020

Talk about leaking value. Eight of the top 10 juice brands are in the red this year, totalling a sales decline of more than £34m.
So how did the exceptions manage it? For Innocent, a revamp of its Super Juices (now Innocent Plus) drove its £16.9m sales boost – by far the highest absolute gain in the category.
For Oasis, the only other juice brand in growth this year, success was driven through larger pack sizes and unique flavours. “Flavour firsts like our Sours range have kept our consumer base engaged, and our take-home 1.5-litre packs have delivered significant growth in our core range,” says Simon Harrison, VP for commercial development at brand owner CCEP GB.
PepsiCo-owned Naked, which kept sales relatively steady, is turning its attention to sustainability. It’s set to roll out its entire juice and smoothie range in 100% recycled plastic next month.
It’s not the only brand focusing on sustainability. “Our range has used 100% recycled plastic since 2007, which a lot of our shoppers don’t realise,” says Charlotte Flook, head of Ribena. The brand plans to up communications around its eco-friendly credentials this year, alongside “continuing to support no-added-sugar and zero-sugar lines”.
Britvic’s J2O is also pinning its hopes on comms. It will continue investing in its Find Your Moji campaign, which launched in 2018.

Sugar

Indeed, Tropicana and J2O aren’t the only brands suffering from tough comparables. Just two of the top 10 brands in juice are in growth, while the remaining eight lost a combined total of £34.4m, driven largely by volume losses [Nielsen].

But even taking into account the impact of 2018, there is a more worrying and long-running trend at play. Juices have been steadily losing money for years now, thanks in no small part to concerns over sugar content.

Recent headlines will only have made that worse. A Streetbees poll of over 1,100 shoppers found 30% had read news stories about juice being bad for their health in the past year. Of those shoppers, 44% said they had actively reduced the amount of juices and smoothies they drank as a result. “We know that shopping habits are influenced by the press, and this year has been particularly dire for negative coverage of the category,” admits Alex Lai, CEO of functional beverage company Raylex Brands.

Of course, consumers don’t necessarily swallow everything they read. The scientific rigour of many of these studies has come under fire and Lai believes that is coming through in public feeling. “There is growing scepticism around news stories from the public, and the story about juice being connected to cancer wasn’t widely accepted to be true,” he says.

“This year has been particularly dire for negative coverage of the category”

However, he believes the widespread media coverage around the sugar content of juice has touched a nerve. “Sugar coverage has definitely struck a chord amongst shoppers, and that’s been hampering sales since 2018,” he says.

It’s not just media hype, either. Public Health England recommends just 150ml of juice a day diluted and consumed with a meal because of its high fructose content. That means a growing number of shoppers are diluting juice with still or sparkling water, which is hitting volumes. “It’s a way of reducing the sugar content of the drink, and is particularly popular amongst parents,” says Lai. Some would rather avoid it altogether given that the fructose in fruit juice is classified as free sugar - the type that is particularly worrying health campaigners.

The extent of these worries is evident in our Streetbees research. While two thirds of juice drinkers believe the sugar content of juice is too high, 43% believe juice should only be consumed occasionally.

These concerns are particularly damaging considering juice is marketed as a healthy option, says Hamish Renton, MD at fmcg consultancy HRA Global.

“Historically, juice has been positioned as an everyday drink, which is really problematic because of its high fructose content,” he argues. “The category has been complicit in spreading the myth that it was perhaps healthier than it is for a long time, which makes the shock tactics used by the press all the more impactful.”

Losing shoppers: juices & smoothies value sales

Juices and smoothies growth by sector

	Value (£m)	% growth	Market share
Not From Concentrate	493.4	-2.5	38.9
Juice Drinks	348.6	-8.9	27.5
From Concentrate	290.9	-5.9	23
Smoothies	114.8	2.3	9.1
Freshly Squeezed	19.8	15.4	1.6

Brands vs Own Label
	Value (£m)	% growth
Brands	595.8	-5
Own label	671.7	-4

Source: Kantar 52 w/e 4 November 2019

The juices & smoothies category has experienced a 4.5% value decline this year. That performance goes against total grocery, which is in 1.3% growth.
Both brands and own label are in decline. While penetration losses and smaller baskets dragged down branded sales, volume losses were the biggest factor in own label’s value decline.
There has been a notable drop in price cuts and volume-driving deals. However, both full price sales and promotional sales saw an equal decline.
Not from concentrate, juice drinks and from concentrate juices have driven the loss of value in the category, shedding a combined £65m.
Still, there are some pockets of growth. Freshly squeezed juice managed to find growth by attracting new shoppers. Smoothies also continue to grow, attracting new consumers as well as seeing shoppers pick up products more often.
Within retailers, Aldi, Lidl and Ocado are growing their not from concentrate sales. Tesco’s juices are also growing by 5%, in contrast to the declines seen across the rest of the big four.

Rebecca Watterson, Kantar

Communications

So far, juice doesn’t seem to have done much to counteract this narrative. Even the top brand, Innocent, admits its main method of communicating the nutritional benefits of its products come from its customer service team, who field any comments, queries and complaints. “We are looking at how in future we can communicate that to drinkers in the best way across packs and via marketing,” says Graeme Farrington, UK & Ireland MD.

Rather than highlighting the benefits of standard juice, the focus has been on innovation that plays better to consumer trends. Farrington says much of Innocent’s success over the past year - the brand is up £16.9m - has come from the relaunch of its Super Juice range under the name Innocent Plus to attract the healthy living crowd. “Our customers kept telling us that health was their most pressing need, so we made the range more functional by adding more vitamins,” he says. “We also wanted some innovation that really stood out on shelf, so we added exciting colours to the category, including Bolt from the Blue.”

Buoyed by the success of Innocent Plus, the brand has turned its attention to its smoothie range this year. Following a Super Juice-style makeover, the range is set to relaunch this month, with new flavours Blue Spark, Culture Crush and Up & Oat joining the existing four lines. “We know shoppers are looking for natural products that add benefits like vitamins, so we’ve added extra vitamins into our smoothies as well as great colour on shelf, new packaging and a new brand campaign,” says Farrington.

Number two brand Tropicana is similarly bringing out new products to attract health-conscious shoppers. After several years of development, the brand launched its Whole Fruit range in May made using a “new and unique process that helps retain more of the whole fruit”. Each 150ml bottle claims to provide on average over 50% more fibre than a standard fruit juice or smoothie as well as one of consumers’ 5 a day.

“We know shoppers are looking for natural products that add benefits like vitamins”

“It’s a category first,” says Hind of PepsiCo, who reports the range has accrued £2.2m in sales since launching. “We found that fibre is really well understood particularly with an older demographic, and the shoppers of Whole Fruit were more mature than our core range.”

That older demographic could be a big win. Because according to Harris Interactive research conducted for The Grocer in April, these shoppers are under-represented in juice. A poll of 1,233 shoppers found that more than half of 16 to 24-year-olds drink juice at least once a day, a number that drops to just 28% of the over-45 age group.

Kiti Soininen, category director for UK food & drink research at Mintel, believes Tropicana is thinking along the right lines with Whole Fruit. “The spotlight on sugar has put pressure on the category for several years now, but emerging health trends offer opportunities for these products to promote their health credentials,” she says.

As the category kingpins, Innocent and Tropicana are in a prime position to lead this wave of healthy innovation. But they’re not the only ones on an NPD drive. There’s also a serious amount of effort going on among juice drinks, which have typically suffered from their lack of natural credentials compared with pure fruit juice. This year was an especially tough one for juice drink sales, which fell 8.9% to £348.6m.

Ribena is addressing that by moving out of the juice drinks category. It made its first foray into flavoured water in March with Frusions, a low-calorie range of blackcurrant waters infused with fruit and botanicals. These were supported by a multimedia campaign in May spanning TV, out of home, digital and in store. Since launching, Ribena says the lineup has accumulated £4m.

Sugar concerns were a major motivation behind that launch. Although Ribena has reformulated to reduce sugar – its standard juice drink now contains 11.6g per 250ml serving – it has still struggled to gain sales. Ribena took the biggest hit of the top 10 juice brands this year, haemorrhaging more than a fifth of its volume and value sales [Nielsen].

“Sugar awareness is the biggest trend affecting juice and soft drinks overall,” says Charlotte Flook, head of Ribena at parent company LRS. “Consumers are looking for alternatives to juice that they perceive to be healthier like plain and flavoured waters,” she says. “That’s driven a higher volume of low and no-sugar drink sales than regular soft drinks for the first time ever last year.”

Sugar concerns: shopper perceptions of juices & smoothies

Visibility and purchases in juices and smoothies

% of shoppers who…
	Grocery average	Chilled juice	Smoothies
Saw the category	28%	14%	9%
Made a purchase after seeing the category	14%	43%	7%

Source: Shopper Impact study of 1,100 shoppers from Shopper Intelligence. Enquiries to www.shopperintelligence.co.uk.

Low & no-sugar

That is influencing what goes on the shelves. “Across retailers, space on shelf is being reallocated from pure juice to waters and new low and no-sugar options,” says Simon Harrison, VP of commercial development at brand owner CCEP GB.

He should know. Because that trend has hit CCEP’s juice drink brand Capri-Sun hard. It has seen sales drop £7.4m this year on volumes down 12.6% [Nielsen]. For Harrison, that’s down to perceptions among parents. “Our research shows that parents are confused at point of purchase and are concerned about the sugar content and artificial ingredients in kids’ drinks,” he says.

CCEP is hoping to address that issue with the launch of “simple and clear new pack designs” this year to communicate that Capri-Sun contains no artificial ingredients, as well as highlighting its low and no added sugar options. This will be backed by a £6m campaign for the brand including ATL, social, digital, and in-store activity throughout 2020. Plus, it is broadening its portfolio with a new Blackcurrant 330ml on-the-go pouch.

“Parents are often confused at point of purchase and are concerned about sugar”

The rate of innovation is pretty staggering. Yet the biggest players don’t want to stop there. PepsiCo’s Hind says the evolution of the soft drinks category could hold lessons for the future of juice. “Low-sugar options remain an unfulfilled area for growth in juices,” he says. “In soft drinks, 47% of products are either low or no sugar, compared to just 13% of juices.”

Indeed, PepsiCo has already ventured into this area with the launch of low-sugar smoothies under its Naked brand in June. The three-strong Naked Lean range comprises watermelon & raspberry, kiwi & cucumber and peach & ginger flavours, each of which claims to contain 40% less sugar than the average smoothie.

According to Hind, the low sugar proposition is proving highly lucrative. Naked Lean has already amassed £4m in sales since launching in Tesco. “Thirty per cent of the shoppers for the range hadn’t bought into the category in the previous 12 months, so it was really incremental value.”

Consumer research backs up his optimism. A Mintel report in August found low and no-sugar credentials were the most important factor in juice and smoothie purchases alongside flavour. And our exclusive Streetbees research found 67% of juice drinkers would drink it more often if there were more low-sugar products available.

Plus, consumer appetite isn’t the only motivation to delve into low-sugar options. Fruit juices may be exempt from the soft drinks levy, but they do fall under Public Health England’s Sugar Reduction Programme, which is set to publish a progress report on juice by summer 2021. The body has challenged brands and retailers to reduce the total sugar content of juices and juice-based drinks by 5% by that date. Although the targets are voluntary, juices will be keen to avoid another bout of negative media coverage.

Still, reducing sugar isn’t the only route to growth. Indeed, fructose levels don’t seem to have dampened growth in the smallest sub-section of juices this year: freshly squeezed juices. Its value is up 15.4% to just shy of £20m, driven by both volume increases and more premium prices. Despite freshly squeezed only accounting for 1.6% of the entire market value, the £2.6m gain is actually the largest actual value increase across juices & smoothies.

Unlike the rest of the market, where growth is coming from innovation that plays to consumer trends, the appeal of freshly squeezed derives from sticking to the basics. Growing interest in juices perceived to be more natural and as close to the fruit as possible has resulted in “the sector successfully attracting new shoppers for freshly squeezed juice”, says Kantar’s Watterson. Indeed, Streetbees research found the sector was the most popular among juice shoppers, with 40% stating it was their favourite kind of juice.

Freshly squeezed juice is the only own-label sector in growth this year. Which tells us plenty about the state of retailer offerings. Although freshly squeezed doesn’t require innovation, that back-to-basics approach isn’t working across the rest of the market.

While brands have been busy innovating with new, health-led propositions, own label offerings have largely relied on their lower prices (on average 74p cheaper than branded per litre) to attract customers. That own label sold 12 million fewer packs this year suggests this approach is no longer working.

“A lot of the own label launches have been underwhelming over the past few years, which is failing to keep shoppers interested,” says HRA Global’s Hamish Renton. There could be substantial area for growth across own label if retailers got more imaginative, he believes. “It’s an area where retailers could really push the boat out.”

After all, if juice is to overcome its bad guy image, it can’t afford to sit back.