Carbonated beverages: producers must react to declining sales
Published:01-April-2009
By Datamonitor staff writer
Beverage Digest reports that the volume of soda sold in the US experienced a year-on-year decline of 3% in 2008. This reflects an ongoing trend in the industry, which has been suffering lately from an unhealthy image and, more recently, recession. Some brands have still managed to increase sales in the sector, however, and the industry must look to examples such as Coke Zero to reverse the trend.
The volume of soda consumed in the US has fallen by 3% over the whole of 2008.
In 2008, the volume of carbonated beverages consumed in the US fell by 3%, according to the trade publication Beverage Digest. This follows a decline of 2.3% in 2007, and marks the fourth consecutive year that carbonated beverage volumes have fallen; levels are now at their lowest in the country since 1997.
Carbonated beverages have acquired an unhealthy reputation in recent years and are now being cited as one of the causes of the global obesity epidemic. Many consumers have switched to drinks perceived as being healthier such as smoothies and other functional beverages, while the meteoric rise seen in bottled water sales has also taken some share away from carbonates. Sales in the bottled water category have begun to fall recently, but consumers will be more likely to switch to tap water than return to carbonates.
The further decline seen in carbonated beverages cannot fully be attributed to the recessionary conditions currently being experienced in the US, as sales have been decreasing since 2005. However, the relatively steep fall seen in 2008 can be partially attributed to the credit crunch. Carbonated beverages are something that can be cut down on with relative ease when disposable income is tight. The 'occasional treat' status of carbonated beverages previously afforded the sector a degree of recession resistance, but the overall reduction in sales has undoubtedly been exacerbated in this case.
The carbonates sector will struggle to arrest the established decline seen in the last five years, and the diversification of Coca-Cola and PepsiCo into other areas suggests that these companies are already looking to generate revenue elsewhere. US residents were still the largest per capita consumers of carbonated beverages in 2008, however, and Coca-Cola's Coke Zero brand actually saw volumes increase by 36%, showing that growth is still possible in this mature market. The core sales provided by carbonated beverages to the industry's giants means that the sector cannot be abandoned, and new ways must be found to foster growth in this category.
