Other Hot Drinks in the United Kingdom

PROSPECTS

Other hot drinks have dipped in popularity

In 2019, retail volume sales of other hot drinks continued to drop, a decline which is likely to continue throughout the forecast period. Important criticism over these beverages’ high sugar content, the lack of new product development in hot chocolate and consumers’ continued interest in on-the-go hot drinks consumption are negatively affecting the category.

Struggle to widen consumer base with limited advertising

Leaders in the other hot drinks space continue to put emphasis on family occasions in their marketing strategies, positioning their beverages as coffee and tea alternatives for children at breakfast, while smaller players focus on enhancing chocolate flavour, thus seeking to premiumise their brands, with Belgian Chocolate, Pumpkin Spice or Salted Caramel options. Although these formats target higher income earners, their availability remains fairly limited across retail channels.

Plant-based options jumping on the “Instagrammable” trend

Within the non-chocolate-based flavoured powder hot drinks segment, brands innovate with plant-based offerings as a strategy to revive the overall hot drinks landscape and reposition it as a healthier offering. New players invest in appealing formats to provide consumers with “good looking” hot drinks.

COMPETITIVE LANDSCAPE

Cadbury expands outside chocolate-based flavoured powder drinks

Cadbury remains the star performer in other hot drinks, thanks to its strong portfolio and loyal customer base. However, over the last few years, Cadbury has shifted its focus returning to its core business: chocolate.

Horlicks unveils new campaign to reassure consumers

In 2018, Horlicks which is owned by GlaxoSmithKline was in talks with Unilever for a possible acquisition. However, a year later, this partnership still has not come to fruition - and Horlicks sales have plateaued.

Private label loses share

Private label products continue to perform well within the other hot drinks landscape yet lose share in chocolate-based flavoured powder drinks. Despite their lower price point, consumers tend to view private label products in other hot drinks as more unhealthy than branded ones - further contributing to overall category decline.

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