From fewer calories to smaller package sizes, the beverage industry caters to heath conscious consumers.
Wells Fargo Securities LLC came away with positive takeaways about the future of the beverage industry after attending Beverage Digest’s “Wall Street Smarts” Conference in New York.
“A key theme in this year’s conference was how best to respond to shifting consumer preferences towards healthier alternatives as companies focus on smaller pack sizes and low/no calorie products,” said Bonnie Herzog, managing director of beverage, tobacco and convenience stores for Wells Fargo. “We are generally encouraged by the overall health of the beverage industry. With accelerated innovation, solid net price realization, and increased marketing support driven by productivity initiatives, we believe beverage manufacturers are well positioned to accelerate growth this year and beyond.”
At the conference, Sandy Douglas, president of Coca-Cola North America was among the speakers. He highlighted several of the company’s recent strategic initiatives, including how small pack sizes continue to drive the bulk of value and volume growth. John Brock, chairman & CEO of Coca-Cola Europe discussed the reduction in calories for the portfolio including a target of 10% reduction in calories/liter by 2020 through the introduction of new no/low calorie products, smaller pack sizes, labeling initiatives, and grassroots campaigns. In fact, Great Britain will likely be the first country to have 50% volume in no/low calorie products by 2020, Wells Fargo pointed out.
Regan Ebert, senior vice president of marketing for Dr Pepper Snapple Group described the significant opportunity that exists in catering to Hispanic/Multicultural consumers. The 56.7 million Hispanics in the U.S. have $1.5 trillion in buying power, and account for 17.6% of the population today, but are expected to more than double in number to 119 million by 2060. Hispanics generally spend 23% more on non-alcoholic beverages than non-Hispanics, and over-index in carbonated soft drinks.
