J. D. Heyes
March 26, 2012
Better late than never, but more Americans finally seem to be getting the message they’ve been consuming far too much soda and as such, sales of pop have been falling.
In reality,soda sales have been falling for about seven years, but they really dropped off in 2011 as consumers made other choices about what sort of refreshments to put in their bodies.
The beverage market actually grew last year by about 0.9 percent, but according to sales data, consumers chose more coffee and teas, sports and energy drinks and bottled water over soda and fruit juices.
Beverage Marketing, a research, consulting and financial-services firm that tracks the beverage industry, said 2011 was the second year of growth for the beverage industry after two consecutive declines in 2008 and 2009.
Costs are up, sure, but choices are healthier
One of the reasons why sales were down, according toBeverage Digest, an industry newsletter, is cost: Prices for carbonated soft drinks climbed about 3 percent last year, making them harder to afford. Drink makers passed on higher prices for the cost of sweeteners, such as corn syrup and other raw materials, to consumers.
According to an analysis of sales data byBeverage Digest, all three big soda-makers — Coca-Cola, PepsiCo and Dr. Pepper Snapple — showed slower sales of popular brands like Coke, Diet Coke, Pepsi-Cola, and Mountain Dew.
Coke and Pepsi market shares shrank while Dr. Pepper’s share was mostly flat. And though sales ofsomesoda brands rose, sales of Dasani — a bottled water sold by Coca-Cola — was the fastest-growing beverage brand, rising 11 percent, according toBeverage Digest. It was followed by Arizona iced tea (9.3 percent) and Pepsi’s Gatorade (8 percent).
Carbonated drinks, by comparison, grew about 3 percent a year through the 1990s, but sales have been declining steadily since 2005, as more health-conscious consumers increasingly turn to better choices of drink.
Sales of Gatorade, meanwhile, are ballooning as well, topping the one billon-gallon mark last year for the first time. In fact,Beverage Marketingsays Gatorade, coupled with G2 and other brand variations, is the fifth-largest beverage trademark.
Niche drinks and water sales increasing
According toBeverage Marketing, other niche drinks are making headway.
“As the proliferation of ‘beverages with benefits’ continues with the introduction of a variety of drinks marketed as delivering specific functional results,”Beverage Marketinghas begun to focus “on a niche within a niche: relaxation beverages,” says the summary ofa new reportby the analytical firm, which calls such beverages an “emerging sub-segment of the wellness and functional beverage marketplace.”
But clearly growth in sales of bottled water continues unabated, according to industry figures. In 2008 and 2009, the poor economy led to a decline in sales but they rebounded again in 2010, as growth really accelerated last year. Bottled water sales volume was up 4.1 percent in 2011, faster than the 3.5 percent growth in 2010.
“The strong showing by high-end and functional products shows that consumers — at least the more affluent ones — are not concerned exclusively with economic consideration when making their beverage selections,” Michael C. Bellas, chairman and CEO ofBeverage Marketing, said.
The ill-health effects of drinking sugar-laden soda are well-known. Soda consumption is a major cause of obesity, which can lead to a range of health problems including heart disease, stroke and, of course, diabetes.
In fact, recent research has found that just drinkingone soda per dayincreases heart risk in men, even if it is not contributing to overall weight gain.
“Continually subjecting our bodies to high amounts of glucose, to high blood sugar levels that trigger large secretions of insulin results in stresses that in the long run show up as high risk of heart disease and diabetes,” the study’s co-author, Dr. Walter Willett, toldCBS News.
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This article was posted: Monday, March 26, 2012 at 2:58 am