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CONFECTIONERY FROM PAGE 65 about their usual convenience impulse purchases over the summer period. Finances aside, the AACS’s Mr Rogut says it’s of great importance that retailers customise their stock according to customer requirement and that they remain abreast of changing customer requirements, such as offering bait and tackle if near a fishing venue, as an example. As summer is usually warm, retailers would do well to stock items from sunglasses to coolers, and if near a beach to consider all relevant items consumers might require, such as lip balm, sunscreen and insect repellent. As a result of Covid-19, manufacturers and retailers can take advantage of the fact consumers are looking to convenience stores more for household cleaning products, hand sanitisers, toiletries and medicinal products, according to IRI Food and Grocery Consultant Brooke Olliver-Burnside. Integral to the merchandise mix are snacks and beverages, with frozen and novel beverages enticing consumers in with the promise of relief and a taste reprieve, as well as easily accessible condoms as we all know summer fun can be synonymous with sex. A volatile channel mix The Australian Beverages Council anticipates that all FMCG categories will continue to face challenges caused by Covid-19, including over the summer months, in a channel mix that is now more volatile than ever. Throughout the first half of 2020 the majority of the drinks industry has successfully pivoted to continue to sustain consumers through the supermarket channel during the most restrictive period of lockdown, and by innovating to provide consumers with drinks directly at home, the Council’s CEO Geoff Parker says. The way companies in the drinks industry operate will change permanently, he advises, with potentially a greater use of e-commerce, and as some parts of the economy start to open up again, P&C or on-the-go outlets will play an important role in the beverage business. “While we’re aware of uncertainty in this channel, the speed of the recovery, particularly heading into summer, will largely depend on getting people moving around Australia and the domestic tourism industry contributing to this,” Mr Parker said. “Anecdotally, drink sales are largely a proxy for foot traffic.” It’s expected that on-the-go outlets in CBD locations will continue to be affected due to the lack of foot traffic caused by many people continuing to work remotely, and a lack of international tourists in the centres of major cities, he adds. “We’ll continue to see new product developments, and on-the-go often provides a platform for the drinks industry to trial variations to regular favourites,” he said. “As such, consumers can expect to see continued innovation in low- and no-sugar drinks through this channel, even in the current uncertain economic environment.” Mr Parker cites a recent study that found significant changes in the types of beverages provided in drinks fridges, such as those in on-the-go locations: in 1997, 64 per cent of drinks' in the fridge were sugar-sweetened, with the remaining 36 per cent made up by non-sugar options; today, those stats have flipped, with 59 per cent non-sugar drinks and 41 per cent sugar-sweetened. This represents a sizeable 30 per cent decrease in per capita sugar contribution from non-alcoholic water- based beverages over the 22 years from 1997 to 2018, which is equivalent to a reduction of 32 teaspoons or 127g of sugar per person, per year. “Australians visiting a convenience store or servo this summer can expect to see their favourite drinks alongside some new no-sugar products tasting equally as a great, and this will provide not only more choice for consumers, but some category support for drink companies,” Mr Parker said. The Australian Beverages Council strongly supports and promotes its members proactively engaging with stakeholders to showcase the industry’s reformulation and innovation agendas, he says. “As the peak body for the drinks industry, the Council has naturally maintained a close relationship with its members throughout the pandemic, many of whom have said that they’ve taken the time to either realign their corporate strategy and/or have used the opportunity to focus on production updates and efficiencies as well as explore research and development or new product development opportunities,” Mr Parker said. In partnership with KPMG, the Council has also recently commissioned an industry recovery blueprint, focusing on areas of pragmatic reform for government stakeholders to consider in their economic rebuilding deliberations. The economic policy paper details some recommendations on the necessary settings to support the drinks industry’s recovery – and sustained growth – over the coming months and years. This represents an invaluable tool as the industry negotiates the challenging road to recovery, Mr Parker says. “For those members that are signatories to our ‘sugar reduction pledge’, reformulation and new product development remains a major focus for achieving the 20 per cent sugar reduction by 2025,” he said. “The pledge is the first time in Australia where an industry has self-regulated its use of sugar in this manner, and we expect more members to join this flagship initiative in the coming months.” Anticipated hurdles The industry’s supply chain is diverse, from local and imported ingredients to R&D laboratories, transportation, logistics, materials handling, plant and equipment, and much more. As with many other industries, Mr Parker says, it will be some time before the full extent of the economic downturn is known. “As we convey to governments the importance of jobs within drinks manufacturing, we’re also emphasising the end-to-end supply chain that’s critical to supporting core operations,” he said. “There are some clear lessons from the Covid-19 emergency and ones that will remain with the industry for some time, but there are also some clear opportunities for reform and positive change, including a refocusing of domestic manufacturing and supply, and a celebration of the diversity of the Australian drinks industry. “This will also contribute to businesses being even more agile and responsive in the future. As the country adjusts to the new reality, we know that, in turn, the industry will continue to chart a fascinating and innovative course forward to continue to provide Australians with refreshing drinks for any occasion during summer and beyond.” 66 CONVENIENCE WORLD SEP/OCT, 2020