Are sales of squash and cordial going to boom?

September 15, 2022

squash and cordial

There’s been a squeeze on juices and smoothies – making way for squash and cordial.  As households and businesses alike face financial pressures, premium drinks options are becoming less affordable, creating ripe conditions for value options like squash and cordial.

This category has already enjoyed mixed fortunes in recent years. After a spell of strong sales in 2020, these fell back as lockdowns were lifted and consumers sought out premium options.  But while 2021 sales dropped by £11.2m, with 6.9m fewer litres sold in supermarkets, overall the squash and cordial category is still up by £38m compared to pre-pandemic levels, according to NielsenIQ.

Now the stage is set for stronger sales again.  A mixture of consumer trends and difficult economic conditions bode well for dilutable drinks. For consumers trading-down squash and cordial are a viable, value-for-money and tasty alternative.  Recent years have created all sorts of opportunities and challenges for the drinks industry.  Environmental concerns and a focus on improving health have changed what kinds of drinks are seen as a go-to for the conscious consumer. But economic uncertainty has impacted how and where people spend their money too. The squash and cordial category is one that ticks a lot of boxes for today’s consumer so and is expected to experience strong growth.  Social, economic and environmental factors will contribute to predictions from market analysts’ ReportLinker that the category could grow at a CAGR of 4.5% in the coming years.

Responding to economic influences

Financial pressures for households and businesses are perhaps the biggest drivers for the category right now. As inflation rises, shoppers are seeking to make savings wherever possible. But few want to cut out little luxuries altogether.  As economic indicators suggest spending will slow on non-essentials like out-of-home eating and drinking, squash and cordial could capitalise here. Both standard squash and premium cordials can be affordable alternatives for creating tasty drinks at home. Creating up to 10 times more product than standard juices, smoothies or soft drinks, cordial and squash are ideal for budget-conscious shoppers.

Supermarket sales of dilutables rose during lockdowns for similar reasons. Squash and cordial allowed people to enjoy their purchases for longer, requiring fewer shopping trips in order to respect social distancing guidelines. Now the same benefits will be seized on by shoppers impacted by the cost-of-living crisis.

For the hospitality sector – many still recovering from pandemic losses – diversifying stock to cater to cautious spenders will be essential to maintaining sales. Squash and cordial typically have a longer shelf life too, offering both economic and environmental savings for vendors.

Choosing squash and cordial reduces environmental impact

Getting more bang for your buck extends to the usable life of the product’s packaging too. As more consumers seek out environmentally-friendly options, cordial and squash allow shoppers to reduce their plastic consumption.  Lengthening the time between purchases of single use plastic bottles appeals to the eco-conscious.

In fact, such is the mass market appeal, and tangible difference made, by switching to products like these other sectors are taking inspiration too. Cleaning and personal care products are increasingly being sold as soluble ‘just-add-water’ solutions to cut down on plastics use.

The same environmental benefits extend to businesses too. Commercial sized squash and cordial cut down on packaging and transport requirements as well as storage space in energy intensive fridges.

At Simpsons our on-trade customers appreciate the environmental value these products offer. Bag in box cordials are supplied in recyclable packaging and in concentrate levels that can reduce transport-related emissions by up to 600%.

Offering health benefits

As well as cutting back on plastics use, many more consumers are reducing their alcohol or sugar intake. In the age of health-conscious consumption, premium cordials can offer a tasty alternative to alcoholic beverages as well as carbonated or sugar-rich drinks.  Like other categories, cordial and squash have kept pace by offering sugar-free or ‘diet’ alternatives. And where sweet drinks still appeal to so many, there’s the potential to create Stevia-sweetened dilutables, as a natural, zero-calorie sweetener.  Low-sugar squash is also an ideal solution for those seeking some extra incentive to drink the recommended 2l of water each day.

As well as offering simple hydration, squash and cordials can be used for fortification too. Many brands are enhancing the health benefits of naturally derived ingredients in dilutables. So-called functional cordials contain extra vitamins and minerals to boost drinkers’ immunity, energy or concentration levels.   These healthy options are increasingly popular with consumers, with the wellness trends which sprang out of the pandemic showing no signs of slowing their influence on food and drinks trends.

Changing habits

Where people want to cut down on sugar or alcohol without compromising their social occasions, restaurants and venues can use squash and cordial to offer ‘clean’ drink options. These will also appeal to those who will cut down on alcohol consumption to suit tighter household budgets.

Premium cordials work well in restaurants and venues where new flavours can complement meals or allow drinkers to moderate their drinking and seamlessly switch between sweet wines or spirits and flavourful cordials.  Cordials are viewed as a viable alternative to cocktails, offering the same versatility of flavours and aromas.  With initiatives like sober October and dry January on the horizon, many are likely to turn to these drinks to during their social occasions.  The high-end packaging often used by the premium options is another similarity between dilutables and standard alcoholic beverages, giving a premium feel to the drinks.

Focussing on flavour

Budding mixologists opened opportunities for at-home use of squash and cordials as mixers for cocktails or to create mocktails.  This rise of at-home mixology during lockdowns has widened the appeal of creative combinations that go beyond the citrus or berry-based flavours typically used in non-alcoholic, non-carbonated drinks.  Bottlegreen and Belvoir Farm provide perhaps the best examples of this, each expanding their lines to offer flavour combinations like Pomegranate & Elderflower, and Mulled Winter (containing clove, cinnamon and nutmeg extracts). These premium options helped the brands to enjoy sales growth of 9.7% and 5.8%, respectively, last year, according to The Grocer.  One only has to look at the rise of flavoured vodkas and gins to see how open drinkers are to new and unusual flavour combinations. The same florals or botanicals that work well in G&Ts are being creatively applied to cordials and squashes. The bigger brands show the very real benefits these creations can bring.

Squash and cordial can appeal to all ages

These ‘grown-up’ dilutable flavours are helping the market to capture and hold on to adult drinkers too. As the birth rate has dropped in recent years, creating ‘mature’ cordial and squash is key to maintaining strong sales. With an aging population, a category that traditionally catered to children needs to be creative to reach older markets, through attractive flavours and strong marketing.  This market will allow for some balance between developing premium offerings and setting higher pricing, since older consumer are less likely to feel the same squeeze on their budgets in the coming months.

Children remain an important consumer group for squash and cordial though. And as new HFSS legislation comes into force, getting the ingredients right is particularly important for this particular consumer group.  These regulations restrict how food and drink high in fat, sugar or salt (HFSS) can be promoted or positioned for retail.  At Simpsons we we’re seeing more brands invest in repurposed recipes to ensure they fulfill regulations and reduce sugars in drinks. This is the right thing to do by consumers, to shift habits away from unhealthy food and drinks, but it’s also a smart business decision to capitalise on wellness trends.

As financial pressures, health kicks and environmental concerns all influence drinks purchases, expect to see more squash and cordial on supermarket shelves and on menu.

Check out our other blogs to read more about the latest drink trends.

 

Check out our other blog posts

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