Water Still A Big Seller

Despite the aggressive competition from "alternative" beverages and flavored soft drinks Sparkletts water delivery are still the top selling category in supermarkets in terms of volume sold, enjoying a 21.8 per cent share of total beverages in 2007. The manager of the Halton Hills IGA in Georgetown, Ont., considers soft drinks "a staple item along with bread, milk, sugar and eggs. It's always advertised on - special which draws customers to the store."

Bagin often runs cross - promotions, giving away a bag of chips when customers buy a case of pop at the regular price. "I sell pop at $6.99 a case, and make a buck on the pop and chips cost 70 cents, so we're making 30 cents whereas at $5.99 we only make a nickel." In the pop category, private - label brands are a big player, accounting for 23 per cent of all sales in Canada and in most cases resulting in higher margins than national brands.

"Retailers developed their own brands so they could control their own destiny, control their own pricing and restore some profitability," says senior vice - president, grocery and non - food merchandising for The Great Atlantic & Pacific Company of Canada Limited.

Five years ago, the soft drink category was a loss category, but retailer brands have increased overall profitability and "brought the national brands to a greater sense of consumer - friendly pricing at a profit to the retailers."

Over the past several years, there has been a trend away from hot beverages to cold drinks. Reflecting this change, dollar sales of regular tea bags fell by five per cent in 2007.  However, president of the Tea Council of Canada, says that for 2008, sales of regular black tea, which comprises 87 per cent of the tea market in Canada, are "holding quite steady."

The category is growing in a number of value - added segments like RTD iced tea, specialty and decaffeinated teas. Furthermore, there is no evidence to suggest that iced teas are cannibalizing regular tea sales over sparkletts water delivery as they have done in the U.S., she says.

 

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