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Soft Drinks Target of Changing Market

By CSD Staff | March 26, 2018

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Noncarbonated beverages and sparkling waters are getting more space in coolers as customers look for alternatives to traditional soft drinks.

In the fourth quarter of 2017, Coca Cola eked out a 1% gain in sales of its carbonated soft drinks (CSDs) such as Coke, Sprite and Fanta in North America, while global volume sales dipped 1%.

Still, those kinds of numbers won’t grow the CSD segment and beverage companies such as Coke are committing to noncarbonated beverage products to bolster profits.

“We’ve noticed flavored sparkling water is taking over in cooler doors and alkaline Ph-balanced water is being noticed at the c-store level,” said Nicolette Jaeger, loyalty and foodservice manager of Warrenville, Ill.-based PRIDE Stores, which has 12 locations in the Chicago area. “We do see a move away from carbonated soft drinks, but people still crave the classics like Coke and Pepsi.”

Last year, the convenience channel accounted for about 19% of industry revenue, which totaled $44.6 billion in 2017. Still, annual growth of CSDs declined 0.4% in 2012 and 2017 and is projected to decrease 0.9% between 2017 and 2022.

STILL TOPS
CSDs in 2016 still topped the packaged beverage category with an average-monthly-sales-per-store total of $7,639, according to preliminary figures released in the NACS State of the Industry Summit Report from April 2017.

With top carbonated soft drink manufacturers further diversifying their lines and moving into other beverage arenas, the segment will continue evolving to suit consumer tastes.
“Whether the category stops hemorrhaging and whether Coke and Pepsi take from other beverages remains to be seen,” said Tom Pirko, managing director, BevMark Consulting, Santa Barbara, Calif. “We haven’t had these competitive dynamics before, with the two biggest players in the world looking to find a way to bring consumers back in.”

Both Coca-Cola and PepsiCo have launched new mid-calorie soda products, reported IBISWorld. In addition, craft sodas like Pepsi’s Stubborn line are more popular. In 2017, Coca-Cola debuted Blue Sky Zero Sugar, a craft soda, and Coca-Cola Zero Sugar, for consumers who prefer the taste of traditional sodas, but are weary of the added sugars and calories.

With the focus on obesity and rise in diabetes, the focus has turned to healthier versions of carbonated beverages that have less calories and healthier ingredient profiles.

“There will always be cola, lemon-lime beverages and orange soda in this category,” said Pirko. “The real issues are with things like the safety of artificial sweeteners and the big producers questioning their identities. These manufacturers will turn to other categories to right their ships.”

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  • Home
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    • Fuel & Gas
    • Health & Beauty
    • Independent Operators
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