New Drinks Category Introductions in European Forecourt Retailing

Many drinks products are experiencing high growth rates but it is important that forecourt retailers understand which they should include in their limited shop space. Based on Datamonitor's consumer products database and customer research, this brief identifies the fastest growing drinks markets and allows forecourt retailers to repond to the latest consumer demands.



Report Highlights
Over the last decade functional drinks have become increasingly important to forecourt retailers, with growth having been particularly strong in Spain and Portugal. Demand for an energy boost is high amongst the motorist segment meaning functional drinks are particularly suited to the service station channel. Smoothies have been growing at a rapid rate through European forecourt shops particularly in the UK. Between 2000 and 2006 sales through UK forecourt shops grew at an annual rate of 50%, boosted by demand from consumers for a healthy beverage whilst on-the-go. Bottled water has become a core part of forecourt retailers' beverage range and can account for 50% of refrigerated storage space. However, as there is little differentiation between water products retailers are diversifying their range. In the UK, Total and Morrison stock 'One Water' for which all profits go to charity.


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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
SOURCES 1
ANALYSIS 2
The energy-replacing nature of functional drinks make them highly appropriate for retail within forecourt shops 2
In the majority of European markets, growth in sales of functional drinks through service stations have outstripped that of convenience stores 2
Sales of functional drinks through service stations are forecast to be strongest in Portugal and Belgium 4
Within functional drinks, nutraceutical drinks are predicted to grow at the strongest rates 5
Demand for an energy boost is likely to be accentuated amongst motorists 6
Forecourt retailers should stock functional drinks products which promote well-being 7
Smoothies should be stocked by forecourt retailers as they provide motorists with a healthy, fresh snack on-the-go 9
The growth of smoothie sales has been particularly strong in the UK 9
Forecourt sales of smoothies are expected to grow at the fastest rates in the UK, Belgium and Italy 10
Fruit-based smoothies are forecast to grow at around four times the rate of dairy-based smoothies 11
Smoothies offer service stations a strong opportunity to benefit from the increase in healthy on-the-go drinking occasions 12
Given their limited shelf space, forecourt retailers should focus on the best known brands 13
Fuel retailers should seek to benefit from the growing popularity of premium hot beverages 15
European forecourt retailers are placing a growing focus on hot beverages 15
Some fuel retailers have launched premium private label hot beverage offerings 16
Fuel retailers should not neglect carbonates, as despite their weak growth, they still account for the majority of soft drinks sales 17
The strongest growth in forecourt sales of carbonates is predicted to be in Belgium, Ukraine and France 18
Of the main types of carbonates, sales of diet cola are expected to grow at the fastest rate 19
Forecourt retailers can generate growth from carbonates by focusing on healthier options 20
Across Europe there are numerous examples of 'healthier' carbonated beverage launches 21
Forecourt shops offer a strong retail platform for bottled water as it is consumed throughout the day 24
In Western Europe, sales of bottled water through service stations have been growing at a quicker rate than convenience stores 24
Going forward, forecourt sales of bottled water are forecast to experience the strongest growth Belgium and France 25
Still flavored water is predicted to continue its robust growth over the next four years 26
Due to the large amount of space required to store bottled water, forecourt retailers need to be innovative with storage 26
Manufacturers have launched a number of products to 'de-commoditize' bottled water 29
APPENDIX 31
Definitions 31
Methodology 32
Product selection 33
Sales of fruit-based smoothies have been growing at a rapid rate across Europe 33
Further reading 34
Ask the analyst 34
• The Energy & Utilities analyst team can be contacted at asken@datamonitor.com 34
Datamonitor consulting 34
Disclaimer 34

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Figure 1: Service station sales of functional drinks have grown at a quicker rate than sales through convenience stores 2
Figure 2: Sales of functional drinks through Portuguese service stations are expected to grow at 12% annually 4
Figure 3: At the European level, nutraceutical drinks subsegment is expected to grow at an average annual rate of 5% 5
Figure 4: The sugar-free variant of Red Bull 7
Figure 5: The Vitaboost Activator 8
Figure 6: In the UK, sales of smoothies through service stations increased at an average annual rate of 50% between 2000 and 2006 9
Figure 7: Sales of smoothies through UK forecourt shops are expected to grow at an annual rate of 60% between 2006 and 2011 10
Figure 8: At the European level, fruit-based smoothies are expected to grow at an average annual rate of 25% 11
Figure 9: Healthy on-the-go drinking occasions across Europe are expected to grow at an average annual rate of 3.5% 12
Figure 10: Innocent's superfoods smoothie 13
Figure 11: Traktor Getraenke's mango and passionfruit smoothie 14
Figure 12: Sales of carbonates through convenience stores have grown at a quicker pace than through service stations in Western Europe 17
Figure 13: Sales of carbonates through Belgian service stations is predicted to grow at an average annual rate of 12% 18
Figure 14: On a year-on-year basis, European sales of diet cola are expected to grow 0.5% higher than regular cola 19
Figure 15: In Europe, 94% of respondents believed that carbonates are either very unhealthy or unhealthy 20
Figure 16: Coca-Cola's Light Plus 21
Figure 17: Organic drink from Bionade 22
Figure 18: The Bononi Vital-Drink 23
Figure 19: Between 2000 and 2006, UK sales of bottled water grew at an average annual rate of 12% 24
Figure 20: Belgian sales of bottled water through service stations are forecast to grow at an annual rate of 14% 25
Figure 21: At the European level, sales of still flavored water are expected to grow at an annual rate of over 7% between 2006 and 2011 26
Figure 22: In the UK bottled water can occupy half of service stations' fridge space 27
Figure 23: It is common to see the shop floor being used to store bottled water 28
Figure 24: All of the profits from 'One water' go to charity 29
Figure 25: Groupe Danone's Vitalinea 30
Figure 26: At the European level, fruit-based smoothies have been growing at the quickest pace 33


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