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Impulse Food and Drink Channels in the United Kingdom
Euromonitor International, July 2007, Pages: 164
Our Impulse Food and Drink Channels in the United Kingdom report analyses food and drink sales (2001-2006) through outlets including foodservice, kiosks, service stations, duty free and vending machines. The number of outlets, key companies and the factors influencing food and drink sales including, economic context, consumer lifestyles, tourism and seasonal consumption are analysed. Forecasts to 2011 illustrate how the market is set to change.
Sector coverage: packaged food, packaged drinks and unpackaged drinks
Why buy this report?
- Get a detailed picture of retail sales through impulse food and drink channels
- Pinpoint trends and identify factors driving change
- Understand the competitive environment, the market’s major players and leading brands
- Use five-year forecasts to assess how the market is predicted to develop
Executive summary
Public health and binge drinking set the greatest challenges
2006 was a challenging year for the impulse food and drink industry. With obesity and alcohol abuse issues frequently under the spotlight, these problems are troubling public-health leaders as well as hindering growth of many sectors within the industry. Consequently, major food and drinks players invested heavily in promoting healthy options and responsible messages.
New food labelling systems, namely the Traffic Light system and the Guided Daily Amount (GDA) system, were unleashed across the packaged food and drink industry in January 2007. However, despite these initiatives the government and manufacturers have not reached an agreement on how the information should best be displayed to provide consumers with the information they need to make the right decisions.
Blurring distribution formats as multi-grocers join the impulse battlefield
Competition with mass retail is escalating as major multi-grocers continue to expand their impulse businesses. While Tesco and Sainsbury strengthened their positions in forecourt retailing, Marks & Spencer entered the fray by opening quick-service counters at selected stores, serving freshly prepared burgers, fruit juice and smoothies.
While product mix continues to grow at forecourt retailers, many are serving as convenience stores in every aspect. As the power of chained operators intensifies, smaller players are pressurised to fight for survival. Nonetheless, the impulse food and drink industry remains rich with opportunity.
Grab-and-go, heat-and-serve products are winning formats
Despite the growing national preoccupation with healthy lifestyle and nutritious eating, consumers on-the-go still opt for convenience over health. Research suggested that many people in the UK rarely or never plan ahead, looking instead to grab a drink and a bite to eat where they can. Impulse purchases offer retailers, especially kiosks, forecourts and vending, the greatest opportunity to attract these mobile consumers. This benefits operators as impulse products have traditionally commanded higher margins. Impulse consumers are also willing to pay more in their search for convenience. To satisfy their needs, manufacturers and operators all the way through the supply chain – from food packaging and preparation methods to point-of-sales layout – therefore have to work together closely.
Quality counts, brand trust over price in impulse
Apart from healthier options, rising consumer demand for premium quality food and drinks also underpins growth in high added-value ranges. Since product quality and convenience are of greater importance to most shoppers, price is generally not the main purchasing criterion in impulse purchases. For instance, Premium coffee manufacturer, Lavazza won the entire coffee contract for the JD Wetherspoon pub chain. Apart from the supply of premium coffee, the contract also included the provision of training sessions for JD Wetherspoon pub managers who were shown how to make quality coffees properly. The training led to impressive results. The pub chain was able to put the price of its cappuccinos up from 79p to £1.25 without any adverse impact on its sales – just as JD Wetherspoon had predicted.
Transitional period as carbonates make way for non-carbonates
The ever-increasing focus on health and wellness drove changes in soft drinks. While soft drinks are still heavily consumed in the UK, their shares tumbled as consumers looked for greater variety in their dedication to healthier living. As a result, less shelf space was allocated to mainstream carbonates with impulse retailers reallocating more to non-carbonated drinks. The rising stars included functional/energy drinks, fruit and vegetable juice, and RTD teas. In spite of this, dairy drinks is the fastest expanding range which has true potential to take up space in impulse channel coolers.
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