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Has Scottish drinking culture gone Soft?

21st May 2018

Beverage companies in Scotland accounted for 31% of total Scottish Food and Drink turnover in 2015. Whilst alcoholic drinks have been a traditional area of focus with products such as whisky generating significant value for the Scottish economy plus gin and ale gaining increasing exposure, soft drinks have also been a key component of the drink industry in Scotland. In fact, Scotland has its own unique soft drinking culture, as it is one of the few countries where Coca Cola and Pepsi sell less than the domestic market leader Irn Bru.
More recently the focus on sugar has had an impact on the market as consumers become more health conscious and the Westminster and Scottish Governments clamp down on sugary drinks contributing to a rise in demand for healthier drinks. This has been reinforced in the May edition of the Scottish Grocer where over a third of consumers are demonstrating concerns regarding sugar.

Recent Kantar Worldpanel data reveals that Mineral Water is the leading “healthier” drink segment within the market with take home sales worth £494m and demonstrating strong growth of 5.0%, outperforming total soft drinks sales.
IRI data leading up to the 25th March 2018 shows that Highland Spring Scottish Water is the leading British Brand within the UK market ranked third in terms of value just behind French brands Volvic and Evian. However Highland Spring is outperforming both leading French brands with double digit growth in both value and volume – underlining the demand for Scottish water.

As in the wider soft drinks market in Scotland, the Scottish bottled water market has its own nuances. There is greater growth in natural sparkling variants in Scotland whereas still water is performing better in the rest of the UK. Whilst still and sparkling flavoured products are performing well in England, Wales and NI, in Scotland it is the sparkling flavoured products that are experiencing the strongest growth (+22.1%).
As well as flavoured products, functional products have also established a presence in the market. Scotland has an above average share of value sales in both of these segments Vs rest of the UK indicating that healthier drinks are resonating well with Scottish consumers.

Written by Duncan Macaskill

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