The imminent smoking ban in pubs in England and Wales is expected to provide a further boost to already growing on-premise soft drinks sales, writes Annette Farr, with more female consumers and families attracted to the new smoke-free environment.

The ban on smoking in public places, which comes into force in England and Wales on 1 July is viewed by many as a significant growth opportunity for the soft drinks industry.

Soft drinks already outperform alcoholic ones in the on-premise market, with sales last year growing 5% faster than total alcoholic beverages. Sales of soft drinks are worth more than those for wine and for spirits and are three and a half times the sales of cider according to AC Nielsen.

Research carried out in January by pub and brewery group Greene King, revealed that 14% of pub regulars (18-24 year-old working males) and 10% of smoking singles said that post-ban they were likely to be visiting the pub less. Taking their place will be so-called 'pub virgins': upmarket, married, female 40-somethings and first-generation families. According to research published by soft drinks company Britvic, 40% of parents questioned said they would be more likely to visit pubs after the ban.

"While the younger generation and male population currently make up a large proportion of Brits visiting pubs to drink, the introduction of the smoking ban looks set to entice a new wave of female customers into pubs across the country with professional women and young families now keen to visit smoke-free pubs to socialise, eat and drink," says Greene King's David Elliott. "The ban could see pub culture in Britain take on a whole new identity."

Martin Hartridge, managing director of Hartridges, the UK's oldest independent company supplying the on-premise market, agrees. "I certainly do think that the smoking ban will have an impact on the sale of soft drinks in the on-premise market. It will make this market more food-orientated, more family-friendly and will encourage more female drinkers."

With this in mind, the company has recently launched a 100% fruit smoothie range. Hartridge says: "It's not too thick, contains nothing but fruit and is rich in vitamin C. Also being in a glass bottle, it is 100% recyclable and has a much lower carbon footprint than not-from-concentrate juices."

Adult soft drink producer Shloer, whose heritage is the take-home market, has just announced a significant listing for its White Grape, Red Grape and White Grape, Mango & Passionfruit drinks with the JD Wetherspoon pub chain. Shloer managing director Mike Coppard comments: "In recent years there has been significant growth in informal out-of-home eating and once the ban comes into effect, predictions are that pubs and bars will benefit as more consumers, in particular families, will choose to eat in their local pub, more frequently."

Coppard adds: "Soft drinks sales are continuing to grow within the on-trade, and research has shown that currently 79% of soft drinks are served with food and 65% are served at lunchtime (Nielsen). It is anticipated that from 1 July soft drinks sales will increase further as more people take advantage of smoke-free environments for an evening meal."

The food factor is significant. Julian Mears of Britvic Soft Drinks, the UK's largest supplier of soft drinks to the on-premise sector with a 44% market share and GBP1bn (US$4bn) in sales, points out that the dining experience opens up opportunities for sub-categories in health and wellness drinks and, crucially, bottled water. "Wine and water go together when out dining." Indeed, bottled water was the fastest growing category in the on-premise market last year, up 28% in value and 24% in volume.

When it comes to stocking the right soft drinks, Mears predicts that although there will be growth from smaller sub-categories, the traditional top-selling colas, lemonades and juice drinks (the top three brands last year were Coca-Cola, Pepsi and R. Whites lemonade) will retain their status.

He also stresses the importance of getting the consumer profile right. "There is a huge difference between what consumers in an inner city pub drink compared with that of a country pub," he explains.

With profit margins on soft drinks servings traditionally greater than alcoholic ones, the happy challenge for publicans is to ensure that they have a full repertoire of soft drinks behind the bar.

As Andy Slee, channel marketing director at Coca-Cola Enterprises (CCE), points out: "With soft drinks in impressive growth in pubs and close to overtaking spirits in sales value, licensees should not overlook the opportunity that this category can offer. 45.6% of on-trade soft drink sales don't come from mixers, so stocking best sellers such as Coca-Cola and diet Coke for single serves should also be considered."

CCE has recently launched Oasis, Peartiser and Schweppes Straightcut into the on-trade. We have developed a strong range for when the smoke clears to help pubs make the most of the opportunity," Slee adds. "However, we know that new income from these groups is not guaranteed for any pub. Many people have identified a potential problem that looms larger than the smoking ban, responsible drinking, glass-bans or legislation. This is the possibility of the pub offering a relatively disappointing out-of-home experience, which will lead to dissatisfaction and, over time, declining frequency of visits."

CCE says it is committed to improving customers' overall experience during a pub visit which should feature "great service, great menus for food and drink and unsurpassed serving quality".

To help licensees prepare for 1 July, Britvic has been sharing its research with publicans, and making sure they have the right portfolio of drinks. It has also implemented its 'Perfect Serve Programme' encouraging publicans to serve soft drinks in an attractive manner, thought to be particularly crucial in appealing female drinkers.

Indeed, Tony Harwood, managing director of Pago Fruit Juices (UK), believes that emphasising how drinks are served is far more important to soft drinks sales growth than the generally expected positive impact of the smoking ban, which he suggests has been over-estimated.

"My view is that the supposed positive impact of the smoking ban on soft drinks sales is mainly apocryphal," Harwood says. "The theory is that the smoking ban will see more families heading out for a drink with children and there will be an increase in sales of soft drinks. With soft drinks being more profitable than beers, that in turn would see the bars making higher profits and becoming instant converts to the smoking ban. It's a good theory but I'm not convinced. 

"I believe it's far more about how soft drinks are served. Serve them correctly - in a long glass, over ice so they look good and taste good - and you'll serve more soft drinks anyway, smoking ban or no smoking ban."