Table of Contents
Executive Summary
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- Market shows signs of coming out the recession
- Carbonated drinks, dairy/dairy-alternative drinks, and juice/juice drinks sales stagnate
- Bottled water makes anemic recovery, sports drinks thrive, energy drinks buck the recession
- Coffee faces inflation due to supply issues; RTD tea contributes to tea growth
- Beverage manufacturers employ multipronged marketing platform
Insights and Opportunities
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- Functional claims become hard to include; market potentially faces sales decline
- Plant-based bottles a competitive advantage
- Stevia: mixed success, offers growth potential
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- Figure 1: U.S. population aged 18+, 2006-16
Inspire Insights
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- Inspire Trend: “Supernanny State”
Market Size and Forecast
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- Key points
- Market shows signs of coming out of recession; inflation poses next challenge
- Top three segments show signs of maturity: tea, sports, and energy drinks bring growth
- Private labels continue to wield influence
- Sales and forecast of non-alcoholic beverages
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- Figure 2: FDMx sales and forecast of non-alcoholic beverages, at current prices, 2005-15
- Figure 3: FDMx sales and forecast of non-alcoholic beverages, at inflation-adjusted prices, 2005-15
- Fan chart forecast
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- Figure 4: Fan chart forecast of FDMx sales of non-alcoholic beverages, at current prices, 2005-15
- Walmart sales
Market Drivers—Health and Wellness Trends
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- Obesity rates steady, but still a cause for concern
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- Figure 5: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2008
- Obesity affects over a third of all children and teens aged 6-19
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- Figure 6: Prevalence of obesity among children and adolescents aged 2-19, 1976-2008
- Diabetes—the ugly expression of obesity; threatens beverage growth
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- Figure 7: prevalence of diagnosed and undiagnosed diabetes among adults aged 20+, 2005-08
- Over half of all adults watch their diets; A majority of those seek low-fat/low- sugar food
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- Figure 8: Trends in watching diet among adults aged 18+, 2005-10
- Figure 9: Trends in watching diet among adults aged 18+, 2005-10
- Let’s Move program likely to influence choices within non-alcoholic beverages
- High-fructose corn syrup continues to bother consumers
Market Drivers—Demographic and Economic Factors
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- Households with children are key driver in the market
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- Figure 10: Households by presence of children, 2000-10
- Kids’ population growth lower during 2011-16 compared to 2006-11
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- Figure 11: Personal consumption of different types of beverages among kids, April 2009-June 2010
- Figure 12: Population of kids aged 6-11, 2006-16
- Teen population offers little growth for 2006-11, better outlook during 2011-16
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- Figure 13: Personal consumption of different types of beverages among teens, April 2009-June 2010
- Figure 14: Teen population by age, 2006-16
- Black and Hispanics are growth-driving population groups
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- Figure 15: Population, by race and Hispanic origin, 2006-16
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- Figure 16: U.S. population buying power, by race and Hispanic origin, 1990-2014
- High unemployment rate keeps consumer spending conservative
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- Figure 17: Employment status of the civilian non-institutional population aged 16+, 2000-11 (month to date)
- Key non-alcoholic beverage consumers continue to struggle with unemployment woes
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- Figure 18: Unemployment status (seasonally adjusted) among civilian non-institutional population, by age, gender and race/Hispanic origin, March 2010-March 2011
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- Figure 19: Consumer Price Index,* all items, January 2008-February 2011
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- Figure 20: Percent change in CPI* in food and energy sectors, August 2010-February 2011
Competitive Context
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- Increasing trend toward hybrid beverages poses confusion, increases competition
- Juice + tea concept debuts
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- Figure 21: V8 V-Fusion, tea leaf lands on bottle, TV ad, 2011
- Flavored water includes fruit and tea flavors
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- Figure 22: U.S. New product launches in flavored bottled water, by flavor, 2010
- Energy drinks continue to include fruit juice and coffee products
Segment Performance
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- Key points
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- Figure 23: FDMx sales and forecast of non-alcoholic beverages, at current prices, by segment, part 1, 2005-15
- Figure 24: FDMx sales and forecast of non-alcoholic beverages, at current prices, by segment, part 2, 2005-15
- Figure 25: FDMx sales of non-alcoholic beverages, by segment, 2008 and 2010
Segment Performance—Carbonated Drinks
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- Key points
- Regular soda exhibits bigger decline than diet soda in 2010
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- Figure 26: FDMx volume sales for regular soda, low-calorie soda, and seltzer/tonic water/club soda, 2005-10
- Key consumers continue to move away; need to rekindle links with teens, young adults
- Natural and sugar-sweetened soda gains, but still remains small
- Diet soda offers growth opportunity only if the taste is right
- FDMx sales and forecast of carbonated drinks
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- Figure 27: FDMx sales and forecast of carbonated drinks, 2005-15
Segment Performance—Dairy and Dairy-alternative Beverages
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- Key points
- Price and supply volatility affect milk sales, may continue in 2011
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- Figure 28: Trends in dollar and volume sales and price of milk* in FDMx, 2005-10
- Soy, kefir, and nut milk show impressive gains
- Yogurt drinks turn in dismal performance, need innovation
- FDMx sales and forecast of dairy and dairy-alternative beverages
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- Figure 29: FDMx sales and forecast of dairy and dairy-alternative beverages, 2005-15
Segment Performance—Juice and Juice Drinks
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- Key points
- A mature segment turns in lackluster performance
- Price increases and consumer aversion for orange flavor impacts 100% juice
- Juice drinks do not resonate with pro-health trend
- Coconut water shows sign of becoming mainstream
- FDMx sales and forecast of juice and juice drinks`
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- Figure 30: FDMx sales and forecast of juice and juice drinks, 2005-15
Segment Performance—Bottled Water
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- Key points
- Bottled water makes anemic recovery, bedeviled by price promotions
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- Figure 31: Volume sales and price of PET bottled water in FDMx, 2005-10
- Enhanced water sales strong in 2010, low-calorie products will find favor
- Premium brands rebound, albeit slowly
- Major players make efforts to deal with the environmental issue
- FDMx sales and forecast of bottled water
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- Figure 32: FDMx sales and forecast of bottled water, 2005-15
Segment Performance—Coffee and RTD Coffee
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- Key points
- Coffee growth remains stable in 2010, but mostly due to inflation
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- Figure 33: FDMx volume sales and price trends for coffee* (excluding RTD coffee), 2005-10
- Coffee commodity prices likely to follow the upward trend
- Growth from premium coffee may get derailed due to price hikes
- Single-cup coffee infuses growth
- RTD coffee recovers in 2010, needs to grow consumer base
- FDMx sales and forecast of coffee and RTD coffee
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- Figure 34: FDMx sales and forecast of coffee and RTD coffee, 2005-15
Segment Performance—Tea and RTD Tea
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- Key points
- Tea rebounds after the recession, future outlook positive
- Canned and bottled tea aids growth, premium and value-priced brands proliferate
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- Figure 35: FDMx sales and forecast of tea and RTD tea, 2005-10
- Tea prices likely to fluctuate as major growing regions report mixed expectations
- Dairy producers increase foothold in tea through refrigerated tea
- FDMx sales and forecast of tea and RTD tea
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- Figure 36: FDMx sales and forecast of tea and RTD tea, 2005-15
Segment Performance—Sports Drinks
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- Key points
- Sports drinks make impressive comeback on the strength of innovation
- Coconut water: competition or growth driver?
- Children and teens show declining interest; teens important for growth
- FDMx sales and forecast of sports drinks
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- Figure 37: FDMx sales and forecast of sports drinks, 2005-15
Segment Performance—Energy Drinks and Shots
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- Key points
- Segment bucks recession but continues to face criticism
- Energy shots bring in key growth but remain small part of the overall segment
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- Figure 38: FDMx sales of energy drinks and shots, 2005-10
- FDMx sales and forecast of energy drinks
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- Figure 39: FDMx sales and forecast of energy drinks*, 2005-15
Segment Performance—Drink Mixes (Other)
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- Key points
- Drink mixes largely remain flat; innovation needed from brands with high awareness
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- Figure 40: FDMx* sales of drinks mixes, by segment, 2005-10
- Other drink mixes turn in lackluster performance
- FDMx sales and forecast of drinks mixes (other)
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- Figure 41: FDMx sales and forecast of other drinks mixes,* 2005-15
Retail Channels
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- Overview
- Supermarkets continue to rule as a beverage purchase destination
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- Figure 42: FDMx sales of non-alcoholic beverages, by channel, 2008 and 2010
Companies and Brands
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- Key points
- Acquisition and alliance activity heats up
- Coca-Cola and PepsiCo continue to lead, both lose market share during 2009-10
- Dr Pepper Snapple Group maintains market share
- Nestlé disappoints due to softness in juice sales, Kraft remains stable
- Dean Foods gains on the strength of price increases in milk segment
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- Figure 43: FDMx sales of leading non-alcoholic beverage companies, 2009 and 2010
Brand Share—Carbonated Drinks
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- Key points
- Most regular soda brands decline, natural brands show small growth
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- Figure 44: FDMx brand sales of regular soda and seltzer/tonic water/club soda, part 1, 2009 and 2010
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- Figure 45: FDMx brand sales of regular soda and seltzer/tonic water/club soda, part 1, 2009 and 2010
- Coke Zero and Pepsi Max exhibit growth, compete on product attributes and marketing push
- Diet Pepsi shows bigger loss than Diet Coke
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- Figure 46: FDMx brand sales of diet soda, 2009 and 2010
Brand Share—Dairy and Dairy-alternative Drinks
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- Key points
- Private labels share remains stable, branded milk loses market share
- Lactaid declines as consumers adopt other dairy-free alternatives
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- Figure 47: FDMx brand sales of dairy and dairy-alternative drinks, part 1, 2009 and 2010
- Figure 48: FDMx brand sales of dairy and dairy-alternative drinks, part 2, 2009 and 2010
Brand Share—Juice and Juice Drinks
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- Key points
- Coca-Cola outpaces PepsiCo on the strength of its Simply brand
- Kraft’s kids-targeted brands bring in growth
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- Figure 49: FDMx brand sales of juice and juice drinks, part 1, 2009 and 2010
- Figure 50: FDMx brand sales of juice and juice drinks, part 2, 2009 and 2010
Brand Share—Bottled Water
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- Key points
- Nestlé’s bottled water portfolio outperforms rivals
- Coca-Cola’s Dasani and Glacéau Vitaminwater turn in weak performances
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- Figure 51: FDMx brand sales of bottled water, part 1, 2009 and 2010
- PepsiCo’s SoBe Lifewater turns in stellar performance
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- Figure 52: FDMx brand sales of bottled water, part 2, 2009 and 2010
Brand Share—Coffee and RTD Coffee
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- Key points
- Folgers declines and Maxwell House flat; both face competition from gourmet brands
- Coffeehouse brands perform well, price hike may dampen future growth
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- Figure 53: FDMx brand sales of coffee and RTD coffee, part 1, 2009 and 2010
- Frappuccino finds growth, DoubleShot flat
- Green Mountain Coffee Roasters charges ahead by building a single-cup coffee empire
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- Figure 54: FDMx brand sales of coffee and RTD coffee, part 2, 2009 and 2010
Brand Share—Tea and RTD Tea
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- Key points
- Lipton/PepsiCo partnership maintains leadership but loses market share
- AriZona continues to chart its growth path
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- Figure 55: FDMx brand sales of tea and RTD tea, part 1, 2009 and 2010
- Coca-Cola’s premium brands, Gold Peak and Honest Tea, thrive
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- Figure 56: FDMx brand sales of tea and RTD tea, part 2, 2009 and 2010
Brand Share—Sports Drinks
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- Key points
- Gatorade finds its footing, brand’s repositioning brings growth
- Coca-Cola’s Powerade makes a push with Zero and Ion4 extensions
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- Figure 57: FDMx brand sales of sports drinks, 2009 and 2010
Brand Share—Energy Drinks
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- Key points
- Red Bull increases market share, Monster and Rockstar cede
- Living Essential’s 5-Hour Energy continues its growth onslaught
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- Figure 58: 5-Hour Energy , TV ad, 2010
- Figure 59: FDMx brand sales of energy drinks, part 1, 2009 and 2010
- Coca-Cola and PepsiCo continue the downward slide
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- Figure 60: FDMx brand sales of energy drinks, part 2, 2009 and 2010
Brand Qualities
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- Gatorade goes through a makeover, reconnects with target consumer
- Nestlé Pure Life finds success by marketing wellness at a value price to families and Hispanics
- GMCR accumulates single-cup coffee brands through acquisition and allinaces
Innovations and Innovators
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- Pace of innovation improves in most segments in 2010
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- Figure 61: Number of new product launches, by non-alcoholic beverage segment, 2005-10
- Carbonated soft drinks
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- Figure 62: Top claims in new carbonated drinks products, 2006-10
- All-natural claims and the use of real sugar continue to grow in new products
- Fruit-flavored Italian soda gains traction; exotic flavors appear in lesser-known brands
- Dairy and dairy-alternative beverages
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- Figure 63: Top claims in new dairy and dairy-alternative beverages, 2006-10
- Functional claims make dairy and dairy-alternatives more competitive to other segments
- Nut, seed, soy, and grain milk target vegans; Silk debuts coconut milk
- Juice and juice drinks
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- Figure 64: Top claims in new juice and juice drink products, 2006-10
- Superfruits still popular, but move away from pomegranate to fancier Amazon berries
- Coffee and RTD coffee
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- Figure 65: Top claims in new coffee and RTD coffee products, 2006-10
- Coffee makers underscore convenient packaging
- Fair-trade certified coffee continues to grow
- Functional and healthy coffee products promise a boost in metabolic rate, and more
- Bottled water
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- Figure 66: Top claims in plain and flavored bottled water products, 2006-10
- Enhanced water incorporates exotic flavors, makes flamboyant functional claims
- Tea and RTD tea
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- Figure 67: Top ten claims in new packaged and RTD tea products, 2006-10
- Chocolate flavor becomes popular in new tea products
- Sports drinks
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- Figure 68: Top claims in sports drink products, 2006-10
- Coconut water–based sports drinks make appearance
- Gatorade and Powerade innovations focus on sports performance
- Energy drinks
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- Figure 69: Top claims in energy drinks products, 2006-10
- New products tout healthy and natural energy boosts
- Drink mixes
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- Figure 70: Top claims in new beverage mix products, 2006-10
- Innovation ranges from protein water mixes to pure fitness to soda tablets
Marketing Strategies
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- Overview
- Competitive advertising
- PepsiCo’s competitive edge: Pepsi Max and Sierra Mist Natural ads take a dig at Coca-Cola
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- Figure 71: Pepsi Max—competition with Coke Zero, TV ad, 2010
- Figure 72: Sierra Mist Natural—trees plan to trip hiker , TV ad, 2010
- Social media use proliferates beyond having a dialogue with consumers
- Kraft distributes free MiO samples on Facebook prior to store launch
- Gatorade’s new twist on social media: Mission Control
- Engage in community improvement
- Coca-Cola funds community parks to make people more active
- PepsiCo continues with its Pepsi Refresh project
- Diet soda brands heavily target men
- Coke Zero continues with its masculine-tone advertising
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- Figure 73: Coke Zero—man enters a time machine , TV ad, 2010
- Dr Pepper 10 targets only men, excludes women from product advertising
- Selling health
- Welch’s picks health platform as the launch pad for its Healthy Start extension
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- Figure 74: Welch’s Healthy Start , TV ad, 2010
Appendix—Trade Associations
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