Adult soft drinks: innovation is the key Adult soft drinks are now a well established market, but are they starting to run out of steam? Sue Barnard investigates Orchid Soft Drinks marketing controller John Vincent is indignant. He is not enamoured of the suggestion that adult soft drinks are out of energy. Although he agrees that the market has matured since its early days in the mid-90s, he considers it still has an immense way to go in reaching a wider audience. Vincent says: "There have been casualties along the way and some brands are no longer on the market. But that is a natural progression. There will be winners and losers and those that remain will be all the stronger." According to Nielsen statistics, the adult soft drinks sector in multiple grocers was up 21% to £86m in 1999 compared with 1998, while the total soft drinks market increased just 11%. Some brands grew even stronger. Amé was up 39%, Aqua Libra 32%, Purdey's 43% and Appletise 21%. This, according to Vincent, is a direct result of the dynamism that some of the manufacturers have contributed to the sector. Orchid Drinks was set up in 1992 and has grown into a multi-million pound company because, according to Vincent, it has focused on innovative launches, targeted at an expanding range of consumers. Vincent says: "Some of the players in this sector may not be big in comparison with Coca-Cola & Schweppes Beverages and Britvic, but we have kept our market alive because of our innovation. Adult soft drinks give consumers choice and retailers the opportunity to make money on premium products where the rest of our industry is being squeezed." Peverel Manners, managing director of Belvoir Fruit Farms, agrees. He says: "This is a profitable market for retailers. Our sales were up 25% in value last year. Consumers are not fools. They are turning to quality products with a point of difference. "It is the smaller companies like ours that can provide the flexibility to innovate. If we like an idea, we can launch it quickly. We don't have to go through endless debate." And these smaller companies are growing. Bottle Green Drinks is currently expanding its salesforce to handle an increasing workload. Sales and marketing manager Elizabeth Steele says: "If adult soft drinks didn't have a good rate of sale they would never survive in the multiples. And if the multiples didn't think there was potential they wouldn't be introducing own-label versions." Princes Soft Drinks is so convinced that there is scope for development within adult soft drinks that it has recently taken on the production, sales and marketing of three cranberry-based Ocean Spray cordials. Category marketing manager Graham Breed feels that, rather than running out of steam, the opposite is a more accurate reflection of this category. He says: "Products targeted at adults have not even got into their stride yet. Adults have not been well served by the soft drinks industry." Breed highlights a serious disparity emerging in marketing focus. According to the company's estimates, 32% of adults are currently over 50, but only 20% of the marketing focus is on this group. By 2030, the over-50s will account for 43% of the population. "If marketing continues at this level, there will be a serious under-focus on this group, which is considered to hold 80% of the UK's wealth," he says. Breed believes functional foods will play a major part in the development of drinks in the future. We are already seeing products with soluble fibre and added calcium and he sees no reason why this aspect should not play a larger role in the adult soft drinks sector. But he doesn't just see potential in the over-50s. "There's huge potential waiting in the wings in other areas," he says. "The 20 year-olds of today have much more of a soft drinks habit than one of drinking tea or coffee. They'll be taking their liking for soft drinks into their older years. The industry will need to do a lot more to address this. This is just the beginning." {{FOCUS SPECIALS }}