Smoothies - UK - September 2010

About this report

The smoothies category has seen its exponential growth – driven by the success of Innocent – checked in the past three years, with the economic downturn seeing many consumers switching to cheaper alternatives such as pure fruit juices.

However, the decline of the category has also been due to negative publicity around adverse health effects and brands such as Innocent have not made a strong enough case as to why they are worth paying more for in spite of people having less money to spend.

• Heavy discounting has failed to arrest the decline in the smoothie market, with consumers continuing to switch to cheaper alternatives such as fruit juice. As a result, the market declined by 36% between 2007 and 2009, following strong growth (+159%) between 2005 and 2007.
  
• Despite strong supporting evidence from the British Nutrition Foundation, Innocent has failed to defend itself, and the smoothie category in general, from accusations that smoothies are calorie laden and bad for your teeth.
  
• Innocent dominates the market, accounting for 80% of all value sales despite having a torrid time over the last two years. This is mainly on account of Pepsico’s decision to discontinue market number two brand PJs, and its lack of success in extending the Tropicana brand into the smoothies market to fill the gap.
  
• Smoothie brands should be shouting louder about their exotic flavours, with three quarters of drinkers finding their exotic combination of fruits exciting.
  
• Smoothies should also be targeting the impulse channel more, as time pressed consumers look for a quick health fix, rather than relying on sales of litre cartons in supermarkets, where margins are being eroded by heavy discounts.
  
• Coca-cola’s investment in Innocent should provide the brand with the distribution scale to improve margins while maintaining price competition. Mintel’s price-analysis shows that unlike their litre option, Innocent’s smaller sized 250ml bottles and 180g kids cartons are vey expensive compared to their soft drinks competitors.

Table of contents

Issues in the Market
Definition
Abbreviations
Market in Brief
A rollercoaster market…
…but one still worth investing in
Virtually a one-brand market
Barriers to purchase must be overcome
Exploiting new markets…
…and unique selling points
Internal Market Environment
Key points
A uniquely British market
Economic woes burst smoothies’ bubble
Figure 1: Trends for statements about shopping frugally, 2006-10
A more demanding consumer has emerged
Figure 2: Trends for general statements about shopping habits, 2006-10
There are still opportunities for non-essential goods
Health, convenience and premiumisation remain key drivers
The kids’ lunchbox market is now a key target
Health message not getting through
Less dependent on dodgy UK summers than most soft drinks
Figure 3: Trends for smoothie drinking, by quarter, Q1 2008-Q1 2010
Broader Market Environment
Key points
Smoothies benefit from health legislation
Recovery remains fragile but will improve from 2011
Figure 4: Trends and forecast for consumer expenditure, at constant 2010 prices, 2005-15
Demographic changes
Competitive Context
Key points
The growth of non-alcoholic drinks
Figure 5: Percentage yearly growth of UK household spend, for drinks categories in 2009, at constant value, (reference year 2006)
Energy drinks, squash and fizzy soft drinks prove the most recession-proof
Figure 6: Penetration of non-alcoholic drinks, 2006-10
Strengths and Weaknesses in the Market
Strengths
Weaknesses
Market Size and Forecast
Key points
Smoothies see dramatic reversal in fortunes
Figure 8: Trends and forecast for volume sales of smoothies, 2005-15
Figure 9: Trends and forecast for value sales of smoothies, at current and constant (2010) prices, 2005-15
Discounting prevents even greater losses
Figure 10: Retail price per litre of smoothies, 2004-09
Incremental growth from 2011
Figure 11: Trends and forecast for value sales of smoothies, at constant (2010) prices, 2005-15
There is growth potential but also limitations
Market Share
Key points
Innocent grows its share despite fall in sales
The kids are alright
PepsiCo get its fingers burnt
The next generation
Figure 12: Trends for take-home brand share of smoothie brands, 2007-09
Companies and Products
Key points
Take-home smoothie producers
Innocent (Coca-Cola)
Naked Juice (PepsiCo)
Tropicana (PepsiCo)
RDA Organic
Smoothie bar chains
Crussh
Revive Juice Bars
Brand Communication and Promotion
Key points
Past 12 months see a big push in adspend
Figure 22: Main media advertising expenditure on smoothies, 2006/07-2009/10*
Innocent shouting about five-a-day message
Innocent goes after the kids market
PepsiCo reduces its investment in smoothies
Figure 23: Total media advertising expenditure on smoothies, 2008-10*
Channels to Market
Key points
Limited presence in impulse means almost total reliance on major multiples
Figure 24: Trends for value sales of the smoothies market, by channel of distribution, 2007-09
Exploiting routes to market with huge potential
Café culture
The on-trade
The breakfast trade
Vending machines
Consumer Usage and Purchasing Habits for Smoothies
Key points
Smoothies tune into a new generation of consumers
A quarter purchase smoothies for their kids…
Figure 25: Penetration of non-alcoholic drinks in the past year, by drink type, June 2010
Figure 26: Who people buy smoothies for most often, July 2010
…in contrast to fruit juice which is more of a family purchase
Figure 27: Who people buy smoothies for most often compared to fruit juices, July 2010
Smoothies are an expendable luxury…
Figure 28: Frequency of consumption of RTD fruit/vegetable drinks and smoothies, 2006-10
…as well as being an ‘all or nothing’ product
The implications of discounting
Litre cartons dominate
Figure 29: Packaging types drunk most often, 2010
High price point prohibiting growth of impulse sales of Innocent…
Figure 30: Price positioning of selected soft drinks, based on size of packaging, August 2010
…as well as kids’ products
Figure 31: Price per 100ml for kids’ selected kid drinks multipacks, August 2010
The importance of targeting parents with younger kids
Figure 32: Trends for fruit juice versus smoothies consumption among kids, by age, 2008 and 2009
Changes in Consumer Consumption Over the Past Year
Key points
Picture is getting brighter for smoothies
Figure 37: Quantity of smoothies consumed compared to a year ago, July 2010
Younger generation driving uptake
Calorie content driving reduction in consumption more than value
Figure 38: Attitudes towards smoothies, by whether people have maintained or reduced their consumption in the past year, July 2010
Expense aside, cutting back is not an easy decision
Appendix
Consumer research
Advertising data
Focus groups
Appendix – Internal Market Environment
Figure 39: GfK NOP Consumer Confidence Index, January 1988-July 2010
Figure 40: Trends in personal concerns, June 2009 and June 2010
Appendix – Broader Market Environment
Figure 41: GDP, PDI, consumer expenditure and savings, at constant 2010 prices, 2005-15
Figure 42: Trends in the age structure of the UK population, 2005-15
Figure 43: Forecast adult population trends, by socio-economic group, 2005-15
Figure 44: UK households, by size, 2005-15
Appendix – Brand Communication and Promotion
Figure 45: Main monitored media advertising expenditure on smoothies, by leading advertisers, 2008/09 and 2009/10*
Figure 46: Main monitored media advertising expenditure on smoothies, by leading brand and advertiser, 2008/09 and 2009/10*
Appendix – Consumer Usage and Purchasing Habits for Smoothies
Figure 47: Most popular types of drinks drunk in the past year, by demographics, July 2010
Figure 48: Next most popular types of drinks drunk in the past year, by demographics, July 2010
Figure 49: Smoothies most often bought for, by demographics, July 2010
Figure 50: Trends for packaging types drunk most often, 2007-10
Appendix – Changes in Consumer Consumption Over the Past Year
Figure 55: Quantity of smoothies consumed compared to a year ago, by demographics, July 2010

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Related research categories

By sector: Smoothies (in Soft drinks)

By market: United Kingdom (in Europe)