Pi-Consulting

Consumption of carbonated soft drinks — sodas to you and me — is in decline in the USA. Data from industry bible Beverage Digest shows case sales falling for the first time in 20 years, slipping by 0.7% to 10 billion cases. Individual brands have fallen more sharply. Coca-Cola Classic is down 2% year-on-year, while regular Pepsi is off 3.2%. Nor are their diet equivalents exempt from the trend, with Diet Coke failing to grow significantly, and Diet Pepsi falling by 1.9% last year. The slippage in full-sugar sodas is in response to growing public fears about obesity, particularly childhood obesity. Diet soda turn-offs include changing tastes and concerns about artificial sweeteners. Overall, the downward trend is driven by consumer misgivings over health. As colas and other sodas decline, their “share of bladder” is being taken up by bottled water, sport drinks like Gatorade, and energy drinks such as Red Bull, a migration which translates to a 10%+ growth pattern for such beverages, and which some industry analysts describe as “permanent”. Morgan Stanley suggests that two-thirds of bottled water sales growth is at the expense of sodas, while other flavored drinks are benefiting from what they describe as “wandering taste buds”. PepsiCo has been diversifying with the trend, while the Coca-Cola Company vows that its carbonated soft drink business in the USA can return to growth. One of them is getting it wrong. (Source: The New York Times)