Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Regular category popular but sales declining; seltzer posts strong growth
- Carbonated juice and energy among primary competitive threats
- Regular soda declines while diet soda and seltzer water/natural soda posts growth in FDMx
- Convenience stores and supermarket primary channels
- Wellness trend leveling off but still undermining growth of some brands
- Diet Coke and Pepsi remain at top of diet segment
- Schweppes, Canada Dry and Polar hold share in seltzer/tonic water/club soda segment
- Usage among adults declining slowly; demand strong in 18-24 segment
- Coke and Pepsi remain dominant but Dr Pepper Snapple Group posted impressive growth
- More than one in three (38%) report drinking less soda than last year
- Three in ten drinking less because of recession; proposed soda tax could drive down sales
- Many concerned about sugar content and prefer natural sweeteners
- Refreshment, taste and pairing with foods powerful usage drivers
- Incidence of use down among teens but amount consumed by day by users rose 2007-2009
- Kid usage declining but still high demand segment
- Incidence of use on the decline in all major race and ethnicity segments
Insights and Opportunities
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- All-natural zero-calorie sweeteners could revive the diet segment
- Build brand community
- Use eco-friendly packaging to appeal to green consumers
Inspire Insights
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- Trend 1: Do pop taxes work?
- What’s it about
- Implications for the soda industry
- Trend 2: Soft drinks cause aging
- What’s it about
- What we have seen
- Implications for the soda industry
Market Size and Forecast
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- Key points
- Sales growth decelerated in recession due to price promotions and wellness trend
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- Figure 1: U.S. sales and forecast of carbonated beverages, at current prices, 2005-15
- Figure 2: U.S. sales and forecast of carbonated beverages, at inflation-adjusted prices, 2005-15
Competitive Context
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- Key points
- Growing popularity of carbonated juices poses competition for soda
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- Figure 3: Health perception of carbonated juice/juice drinks vs soda, by age, October/November 2009
- Energy drinks provide fizz as well as energy boost
- Walmart price cuts could create “discount mentality” that serves to drive down overall sales
Segment Performance
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- Key point
- Seltzer outperforms regular and diet soda as many seek healthier options
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- Figure 4: FDMx sales and forecast of carbonated beverages, by segment, 2005-10
- Figure 5: FDMx sales of carbonated soft drinks, segmented by type, 2008 and 2010
Segment Performance—Regular Carbonated Drinks
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- Key points
- Low prices drive demand during recession
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- Figure 6: FDMx sales and forecast of regular carbonated drinks, at current prices, 2005-15
Segment Performance—Diet Carbonated Drinks
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- Key point
- Sales of diet drinks follow trajectory similar to regular carbonated drinks
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- Figure 7: FDMx sales and forecast of diet carbonated drinks, at current prices, 2005-15
Segment Performance—Seltzer/Tonic Water/Club Soda
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- Key point
- Seltzer/Tonic Water/Club Soda well positioned to capitalize on health and wellness trend
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- Figure 8: FDMx sales and forecast of seltzer/tonic water/club soda, at current prices, 2005-15
Retail Channels
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- Key points
- FDMx and convenience stores
- Mass outperforms other channels during economic downturn
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- Figure 9: Total U.S. sales of carbonated soft drinks, by retail channel, 2008 and 2010
- Supermarkets perform relatively well due to frequent visits and value pricing
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- Figure 10: Supermarket sales of carbonated beverages, 2005-10
- Convenience stores show declines due to price perceptions
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- Figure 11: U.S. sales of carbonated soft drinks at convenience stores, 2005-10
- Mass merchandiser sales
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- Figure 12: U.S. sales of carbonated soft drinks at mass channel, 2005-10
- Drug and other channel continues to produce modest gains
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- Figure 13: U.S. sales of carbonated soft drinks at other* channels, 2005-10
- Natural channel
- Natural channel overview
- Sales of carbonated beverages in the natural channel
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- Figure 14: Natural supermarket sales of carbonated beverages, at current prices, 2008-10
- Figure 15: Natural supermarket sales of carbonated beverages, at inflation-adjusted prices, 2008-10
- Natural channel sales by segment
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- Figure 16: Natural supermarket sales of carbonated beverages, by segment, April 2008 and April 2010
- Leading brands
- Hansen’s Blue Sky Number One Brand
- Reed’s also on Top
- Organic soda sales shrink even smaller
Market Drivers
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- Key points
- Incidence of health concerns hits plateau in 2009, as sales increase
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- Figure 17: Incidence of presently watching/controlling diet, May 2004-June 2009
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- Figure 18: Percentage of population aged 20 and over who are overweight or obese or extremely obese, 1988-2008
- Childhood obesity reaches an all-time high
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- Figure 19: Prevalence of obesity among children and adolescents, 2-19 years of age, 1976-2008
- Concerns about fat and weight often shape purchase decision-making
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- Figure 20: Reasons for watching/controlling diet, 2006 and 2009
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- Figure 21: Attributes diet-watchers look for in food, 2006 and 2009
- Incidence of and concern about obesity higher among boomers
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- Figure 22: Prevalence of obesity and overweight among adults aged 20 years or older, by gender and age, 1999-2008
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- Figure 23: U.S. population, by age, 2005-15
- High unemployment and underemployment drives many to seek less expensive options
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- Figure 24: U.S. unemployment and underemployment rate, January 2007-March 2010
- Historically low levels of confidence discourage many from spending
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- Figure 25: Consumer Sentiment Index, January 2007-March 2010
Leading Companies
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- Key point
- Dr Pepper Snapple Group achieves impressive growth with innovation and PepsiCo partnership
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- Figure 26: FDMx sales of carbonated beverages for leading companies in the U.S., 2009-10
Brand Share—Regular Carbonated Drinks
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- Key point
- Pepsi realizes some growth with Mountain Dew
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- Figure 27: FDMx brand sales of regular carbonated drinks in the U.S., part 1, 2009-10
- Crush shows phenomenal growth as a result of partnership and high appeal with strong demand segments
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- Figure 28: FDMx brand sales of regular carbonated drinks in the U.S., part 2, 2009- 2010
Brand Share—Diet Carbonated Drinks
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- Key points
- Coke Zero and Diet Mountain Dew reveal effective growth strategies in diet
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- Figure 29: FDMx brand sales of diet carbonated drinks in the U.S., part 1, 2009-10
Brand Share—Seltzer/Tonic Water/Club Soda
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- Key points
- Polar and private label are driving growth in FDMx sales
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- Figure 30: FDMx brand sales of seltzer/tonic water/club soda in the U.S., 2009 and 2010
Brand Qualities
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- Mountain Dew builds brand community through consumer participation
- Coke Zero
Innovation and Innovators
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- Key points
- Pace of new product introductions picks up in 2010
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- Figure 31: Number of new carbonated soft drinks product introductions in U.S., 2004-10
- Top claims in new carbonated drinks
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- Figure 32: Top claims in new carbonated soft drinks products in U.S., 2005-10
- Top flavors in new carbonated drinks
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- Figure 33: Top flavors in new carbonated soft drinks products in U.S., 2005-10
- Trend toward juice mixed carbonated drinks
- Functional soda
- Relaxation claims on the rise
- Stevia and Agave appear in carbonated soda
- All-natural and organic ingredients
- Use of superfruit flavors—pomegranate, açaí...
- Natural cane sugar soda on the rise
- Limited edition soda
- Packaging innovation include downsizing the can and green packaging
Marketing Strategies
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- Overview
- Television ads
- Some companies emphasizing BFY options
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- Figure 34: Cherry 7 Up Antioxidant TV ad, 2009
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- Figure 35: Coke Minis, Pop poured into glass, TV ad, 2010
- Coke Zero uses masculine creative to pitch diet product, without alienating women
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- Figure 36: Coke Zero (Coca-Cola Zero) clones, TV ad, 2010
- Use of television ads to engage consumers in online communities
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- Figure 37: Mountain dew, DEWmocracy awaits your vote, TV ad, 2010
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- Figure 38: Pepsi Refresh project: People have ideas, TV ad, 2010
- Social media efforts become more sophisticated
- Dr. Pepper
- MySpace
- YouTube.com
- Coca-Cola
- MySpace
- YouTube
- Pepsi
- YouTube
- 7UP
- Sprite
- Schweppes
Carbonated Drinks Usage, Type and Frequency
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- Key points
- Regular soda usage slowly declining as more turn to BFY alternatives
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- Figure 39: Trends in the incidence of personal consumption of carbonated drinks, January 2005-December 2009
- Incidence of use on the decline among men
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- Figure 40: Trends in individual consumption of soda, by gender, January 2005-December 2009
- Incidence of use declining slowly among young adults
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- Figure 41: Trends in individual consumption of soda, by age group 18-34, January 2005-December 2009
- Incidence of diet usage on the decline among the middle-aged
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- Figure 42: Trends in individual consumption of soda, by age group 35-54, January 2005-December 2009
- Use of regular soda among the fast-growing 55+ segment on the decline
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- Figure 43: Trends in individual consumption of soda, by age group 55-65+, January 2005-December 2009
- Drinkers consuming less per week
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- Figure 44: Trends in the mean consumption of carbonated drinks, January 2005-December 2009
- Young adults still heavily over-index while affluents under-index
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- Figure 45: Mean consumption of soda, type of soda, by gender, age, household income, and households with children, November 2008-December 2009
Brand Usage
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- Key points
- Incidence of cola brand use continue to be flat
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- Figure 46: Trends in the incidence of using top regular cola brands (in 2009) among adults, January 2005-December 2009
- Incidence of using non-cola beverages drives sales growth in regular soda category
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- Figure 47: Trends in the incidence of using top regular non-cola brands (in 2009) among adults, January 2005-December 2009
- Coke Zero shows that diet brands need to be reinvigorated in order to grow
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- Figure 48: Trends in the incidence of using top diet/sugar free cola brands among adults, January 2005-December 2009
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- Figure 49: Trends in the incidence of using top diet/sugar free non-cola brands (in 2009) among adults, January 2005-December 2009
Changes in Usage of Soda During The Past Year
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- Key points
- Young adults much more likely to report increase in usage
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- Figure 50: Incidence of drinking more or less regular soda compared to a year ago, by age, April 2010
- Households with children much more likely to report increased usage
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- Figure 51: Incidence of drinking more or less regular soda compared to a year ago, by presence of children, April 2010
- Weight and High-Fructose Corn Syrup (HFCS) primary reasons for avoiding regular soda
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- Figure 52: Reasons for drinking less regular soda than a year ago, by gender, April 2010
- Men more likely to report an increase in diet usage
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- Figure 53: Incidence of drinking more or less diet soda compared to a year ago, by gender, April 2010
- Reasons for drinking less diet soda, compared to a year ago
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- Figure 54: Reasons for drinking less diet soda than a year ago, by gender, April 2010
Carbonated Soft Drinks: Attitudes and Motivations
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- Key points
- Most people have heard of soda tax and say they will drink less if cost rises
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- Figure 55: Economy and tax-related attitudes towards carbonated soft drinks, by gender, April 2010
- Most think soda is unhealthy; users tend to be brand loyal
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- Figure 56: Health, brand, flavor, and diet soda marketing-related attitudes towards carbonated soft drinks, by gender, April 2010
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- Figure 57: Health, brand, flavor, and diet soda marketing-related attitudes towards carbonated soft drinks, by gender, April 2010
- Packing and feminine image discourage use among a small number of men
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- Figure 58: Men’s attitudes towards diet carbonated soft drinks, April 2010
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- Figure 59: Men’s attitudes towards diet carbonated soft drinks, by age, April 2010
- Young adults more likely to think soda tax can be good and less likely to pay the premium
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- Figure 60: Economy and tax-related attitudes towards carbonated soft drinks, by age, April 2010
Attitudes Toward Soda Sweeteners
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- Key points
- Many concerned about sugar content and prefer natural sweeteners
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- Figure 61: Attitudes towards sweeteners in soda, by gender, April 2010
- Young adults tend to be somewhat less knowledgeable about sweeteners and more likely to avoid artificial low cal sweeteners
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- Figure 62: Attitudes towards sweeteners in soda, by age, April 2010
Why Soda Drinkers Drink Soda
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- Key points
- Refreshment, taste and pairings key usage drivers
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- Figure 63: Why soda drinkers drink soda, by gender, April 2010
- Young adults more likely to report impact of advertising and habit
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- Figure 64: Why soda drinkers drink soda, by age, April 2010
The Teen Soda Consumer
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- Key points
- Incidence of teen use on the decline but users consume more than adults per day
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- Figure 65: Trends in the incidence of teen personal consumption of carbonated drinks, January 2005-December 2009
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- Figure 66: Mean consumption of soda, by type of soda drunk by teens, January 2005-December 2009
- Coca-Cola and Pepsi remain favorites among teens
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- Figure 67: Trends in the incidence of using top regular cola brands among teens, January 2005-December 2009
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- Figure 68: Trends in the incidence of using top regular non-cola (in 2009) brands among teens, January 2005-December 2009
- Coke Zero resonates with teens
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- Figure 69: Trends in the incidence of using top diet/sugar free cola brands among teens, January 2005-December 2009
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- Figure 70: Trends in the incidence of using top diet/sugar free non-cola brands (in 2009) among teens, January 2005-December 2009
The Kid Soda Consumer
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- Key points
- Kid use remains high but reflects gradual decline observed among adults and teens
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- Figure 71: Trends in the incidence of personal consumption of carbonated drinks among kids, January 2005-December 2009
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- Figure 72: Trends in the mean frequency of drinking carbonated drinks among kids, January 2005-December 2009
- Preference for cherry-infused cola on the rise
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- Figure 73: Brands of regular cola liked best by kids, January 2005-December 2009
- Parents becoming more hesitant to purchase kids’ favorite cola
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- Figure 74: How often kids’ favorite colas are in the house, January 2005-December 2009
- Kids contribute to spike in Crush sales
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- Figure 75: Trends in the other soft drinks preferred by kids, by top brands (in 2009), January 2005-December 2009
- Favorite non-cola also less frequently available in household
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- Figure 76: How of often kids’ favorite other soft drinks are in the house, January 2005-December 2009
Impact of Race/Hispanic Origin
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- Key points
- Declines seen in all major race segments; Asians significantly less likely to use
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- Figure 77: Trends in individual consumption of soda, by race/Hispanic origin, January 2005-December 2009
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- Figure 78: Mean consumption of soda, by type of soda, by race/Hispanic origin, November 2008-December 2009
- Asians most likely to report increased usage of regular soda
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- Figure 79: Incidence of drinking more or less regular soda compared to a year ago, by race/Hispanic origin, April 2010
- Hispanics most likely to report drinking less regular soda due to weight concerns while many blacks reduce consumption on doctor’s orders
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- Figure 80: Reasons for drinking less regular soda than a year ago, by race/Hispanic origin, April 2010
- Blacks and Hispanics most likely to report increase in diet soda use
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- Figure 81: Incidence of drinking more or less diet soda compared to a year ago, by race/Hispanic origin, April 2010
Cluster Analysis
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- Top-Poppers
- Demographics
- Characteristics
- Opportunity
- Dieters
- Demographics
- Characteristics
- Opportunity
- Regulars
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 82: Carbonated beverages clusters, April 2010
- Figure 83: Incidence of drinking carbonated beverages, by carbonated beverages clusters, April 2010
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- Figure 84: Health, brand, flavor, and diet soda marketing-related attitudes towards carbonated soft drinks, by carbonated beverages clusters, April 2010
- Figure 85: Economy and tax-related attitudes towards carbonated soft drinks, by carbonated beverages clusters, April 2010
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- Figure 86: Attitudes towards sweeteners in soda, by carbonated beverages clusters, April 2010
- Figure 87: Why soda drinkers drink soda, by carbonated beverages clusters, April 2010
- Cluster demographics
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- Figure 88: Carbonated beverages cluster, by gender, April 2010
- Figure 89: Carbonated beverages clusters, by age group, April 2010
- Figure 90: Carbonated beverages clusters, by household income, April 2010
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- Figure 91: Carbonated beverages clusters, by race, April 2010
- Figure 92: Carbonated beverages clusters, by Hispanic origin, April 2010
- Cluster methodology
Custom Consumer Groups
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- Many women prefer diet, but kids often get regular soda
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- Figure 93: Personal consumption of soda, by moms and non-moms, November 2008-December 2009
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- Figure 94: Mean consumption of carbonated drinks, by moms and non-moms, November 2008-December 2009
- Blue-collar workers, struggling societies, and urban essence groups exhibit above-average regular soda consumption
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- Figure 95: Mean consumption of carbonated drinks, by high use Mosaic segments, November 2008-December 2009
- Affluent Suburbia, Upscale America, and Rural Villages/Farm groups are key target for diet soda
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- Figure 96: Incidence of consumption of diet carbonated drinks, by affluent suburbia, upscale America and rural villages/farms groups, November 2008-December 2009
- Front-of-Pack calorie counts important when promoting diet products
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- Figure 97: Consumption of soda, by inclination to eat healthier, November 2008-December 2009
- Most dieters use at least some zero or low calorie soda
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- Figure 98: Consumption of soda, by attitudes towards watching diet or dieting, November 2008-December 2009
SymphonyIRI/Builders Panel Data—Key Household Purchase Measures
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- Overview of carbonated beverages
- Regular soft drinks: Consumer insights on key purchase measures
- Brand map
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- Figure 99: Brand map, selected brands of regular soft drinks, buying rate, by household penetration, 2009*
- Key purchase measures
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- Figure 100: Key purchase measures for the top brands of regular soft drinks, by household penetration, 2009*
- Low-calorie soft drinks: Consumer insights on key purchase measures
- Brand map
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- Figure 101: Brand map, selected brands of low-calorie soft drinks, buying rate, by household penetration, 2009*
- Brand leader characteristics
- Key purchase measures
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- Figure 102: Key purchase measures for the top brands of low-calorie soft drinks, by household penetration, 2009*
Appendix: SymphonyIRI/Builders Panel Data Definitions
Appendix– Additional Race and Hispanic Origin Tables
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- Proposed tax and recession
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- Figure 103: Economy and tax-related attitudes towards carbonated soft drinks, by race/Hispanic origin, April 2010
- Health, brand, soda flavor, and diet soda marketing
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- Figure 104: Health, brand, flavor, and diet soda marketing-related attitudes towards carbonated soft drinks, by race/Hispanic origin, April 2010
- Men and diet soda
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- Figure 105: Men’s attitudes towards diet carbonated soft drinks, by race/Hispanic origin, April 2010
- Attitude toward soda sweeteners
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- Figure 106: Attitudes towards sweeteners in soda, by race/Hispanic origin, April 2010
- Why soda drinkers drink soda
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- Figure 107: Why soda drinkers drink soda, by race/Hispanic origin, April 2010
Appendix – Trade Associations
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