Customers continue to crave carbonated beverages, even as price points rise. Healthier options, including sugar-free varieties, are a bright spot for the category in the year ahead.
Carbonated beverage dollar sales rang in at $9.93 billion in the convenience store channel, a healthy gain of 7.6% for the 52 weeks ending Jan. 1, 2023, per IRI. Prices rose a whopping 10.6% per unit in 2022, which may have played a role in unit sales dipping 2.7% for the period.
At the same time, flavored seltzer/sparkling/mineral water saw sales of slightly more than $244 million, another 7.6% gain, with unit sales down 2.8%. Non-flavored seltzer/sparkling/mineral water recorded sales of just under $148 million, a leap of 14.6%.
According to Abigail Benn, communications specialist for NielsenIQ in Chicago, the total U.S. convenience store channel for the 52 weeks ending Dec. 31, 2022, saw sales of seltzer water of just over $27 million, up 2.6%. Soft drink sales were just under $9.7 billion, a gain of 8.3%. Sparkling juice saw sales of just over $13 million, down 8.4%. Sparkling water sales were just over $306 million, up 12.1%.
“Carbonated soft drinks (CSDs) remain one of the giants of refreshment beverage categories,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. (BMC). “Americans consume more of only bottled water, and on a dollar basis, CSDs are the largest refreshment beverage category.”
After 16 years of declines, carbonated soft drink consumption increased in 2021 and very slightly again in 2022, according to BMC’s research.
“This was driven by a rebound after particular weakness in the foodservice channel, and to a lesser extent convenience stores, caused by the pandemic,” said Hemphill. “Within the category, diets continue to outperform as consumers opt to consume less sugar.”
Sugar-Free Demand
C-store retailers are seeing the demand for healthier and sugar-free soda options.
“Healthier, better-for-you items will continue to be on-trend items for consumers this year,” said Dana Renfro, category manager for Yesway, which operates more than 420 stores under the banners Yesway and Allsup’s in nine states. “The ‘zero’ sugar items will continue to grow in popularity over the ‘diet’ items.”
In January, Pepsi Zero Sugar tweaked its formula and unveiled a new and improved taste, and with good reason. Valued at $125.3 billion in 2020, the sugar-free carbonated drink market is projected by Allied Market Research to hit $243.5 billion by 2030.
Corinne Gangloff, marketing manager for The Freedonia Group, a division of MarketResearch.com, pointed out that soda will continue to benefit indirectly from the COVID-19 pandemic in 2023. “Carbonated soft drinks like soda, especially diet versions, did well because they are shelf-stable and could be stockpiled and stored. Soda’s pandemic-era revival was attributable to people drinking them for the caffeine jolt as they worked or schooled from home.”
