Soda Growth Slows: Diet, Flavored & New Out-Pace Cola

Mar 01, 2002

Carbonated soft drink sales increased a mere 0.5 percent in the United States in 2001 based on preliminary statistics released from Beverage Marketing Corporation. “Intensified competition from non-carbonated beverages – especially bottled water – has contributed to slower growth for carbonated soft drinks in the last few years,” said Michael Bellas, chairman, Beverage Marketing Corporation. The Beverage Digest-Maxwell report echoed similar findings.

Coca-Cola Classic and Pepsi remained the two most popular carbonated soft drink brands even though consumers bought less of each of them, according to two independent reports. Diet soft drinks outpaced regular soft drinks in 2001, thanks to strong growth by Diet Pepsi, Diet Coke and Diet Dr Pepper. Flavored soft drinks, such as orange, cherry and root beer, grew faster than colas. Austria’s Red Bull joined the ranks of the top 10 U.S. carbonated soft drink companies for the first time in 2001.

Moderator Comment: How should retailers manage the
soft drink category to generate maximum customer traffic while promoting margins
at the same time?

The soft drink market is a mirror to virtually every
consumer trend there is. The category is both impulse-driven (single serve)
and planned purchase (take-home). It is consumed by itself or added-on to other
food purchases. Soft drinks are key to on-the-go meals/snacking trend.

Various products appeal to younger consumers (and older),
different genders, and ethnic groups. From CSDs, bottled water, sports drinks,
etc. there are products for those motivated by health concerns (or not), brands,
price, etc. Vending units, cold cases, fountain, in-aisle departments, end-caps,
lobby displays, gas pump displays, you name it and retailers are using it to
drive traffic. Many still complain about the margins for the overall category,
however. Will consumers continue to purchase at higher price points or are there
other ways to achieve profit goals? [George
Anderson – Moderator

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