Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- On-going challenges limit growth in $36.2 billion CSD market
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- Figure 1: Total US sales and fan chart forecast of carbonated soft drinks, at current prices, 2012-22
- The issues
- Diet soda faces on-going challenges and continues to lose share
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- Figure 2: Total US retail sales of carbonated soft drinks, by segment, at current prices, 2015 and 2017
- Still beverages are go-to drinks for most everyday occasions
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- Figure 3: Occasion for beverage consumption, February 2018
- The opportunities
- High market penetration and engagement of 18-34 year olds and parents
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- Figure 4: Carbonated soft drinks consumed in past three months, for those 18-34 and parents, February 2018
- CSD usage climbs on weekends, for celebrations, and for treats
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- Figure 5: Occasion for beverage consumption, February 2018
- Ideal CSD is foremost “refreshing,” but also associated with aspirational qualities
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- Figure 6: Qualities of ideal CSD, February 2018
- Quest for new tastes and interest in craft CSDs from big brands
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- Figure 7: Attitudes toward flavors and craft sodas, for 18-34 year olds and parents, February 2018
- What it means
The Market – What You Need to Know
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- Little growth in mature, crowded CSD market
- Regular carbonated soft drinks are the larger, more stable segment
- Obesity and taxes hurt CSD sales, while economic factors lift them
Market Size and Forecast
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- Growth dips in 2017 and forecast shows little growth through 2022
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- Figure 8: Total US sales and fan chart forecast of carbonated soft drinks, at current prices, 2012-22
- Figure 9: Total US retail sales and forecast of carbonated soft drinks, at current prices, 2012-22
Market Breakdown
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- Regular soft drinks the larger, faster-growing segment
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- Figure 10: Market share of carbonated soft drinks, 2017
- Figure 11: Total US retail sales of carbonated soft drinks, by segment, at current prices, 2015 and 2017
- Sales down for diet CSDs, while regular CSDs hold ground
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- Figure 12: Total US retail sales and forecast of carbonated soft drinks by segment, at current prices, 2012-22
- “Other” retailers account for almost half of retail sales
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- Figure 13: Total US retail sales of carbonated soft drinks, by channel, at current prices, 2015 and 2017
Market Perspective
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- Bottled water sales climb, reflecting consumer quest for BFY drinks
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- Figure 14: Total US retail sales and forecast of bottled water, at current prices, 2012-22
- Coffee and tea – including new cold RTD brew – compete with soda
- Energy drinks continue to climb and are popular with males 18-34
- Juice drinks offer natural alternatives to CSDs
- Hybrid drinks offer competition, but also potential opportunity
- At-home carbonation offers low-cost, eco-friendly alternative
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- Figure 15: Sodastream infomercial, November 2017
Market Factors
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- Obesity concerns leading consumers away from CSDs
- Sin taxes raise health issues and increase prices on CSDs
- Disposable income and consumer confidence can shape CSD spending
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- Figure 16: Consumer confidence and unemployment, 2000-February 2018
- Younger consumers, including 18-34 year olds, are increasingly diverse
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- Figure 17: US population aged 18+, by age, 2013-23
- Figure 18: Population by race and Hispanic origin, 2013-23
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- Figure 19: Distribution of population, by age, race and Hispanic origin, 2018
Key Players – What You Need to Know
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- Two of the three largest CSD suppliers saw MULO sales grow in 2017
- Coca-Cola and Dr Pepper/Snapple promote core brands, revamp others
- Private label sales fall, while “other” suppliers innovate and build share
Brand Sales of Carbonated Soft Drinks
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- Coca-Cola and Dr Pepper/Snapple build share
- Pepsi continues to struggle, but rolls out new ad campaign in 2018
- Private label sales fall, as retailers shift focus to bottled water
- Niche suppliers do well as “others” grow sales from a small base
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- Figure 20: Multi -outlet sales of carbonated soft drinks, by leading companies, rolling 52 weeks 2016 and 2017
What’s Working?
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- Multi-platform marketing suggests there’s a Coke for everyone
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- Figure 21: Coke Super Bowl ad, “The Wonder of Us,” February 2018
- Connecting communities through celebration
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- Figure 22: Coca-Cola “Food Feuds,” February 2018
- Dr Pepper/Snapple grows share with Dr Pepper, Canada Dry
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- Figure 23: Dr Pepper, “Lil Sweet in a Cake,” February 2018
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- Figure 24: Canada Dry, “Busy is a 4-Letter Word,” August 2017
What’s Struggling?
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- Diet sodas continue to struggle, although sales stagnate rather than fall
- Pepsi Cola loses market share, but launches major campaign in 2018
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- Figure 25: Pepsi “Generations,” February 2018
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- Figure 26: Pepsi, “Paint the world blue,” March 2018
What’s Next?
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- Potential reinvigoration of diet soda category, as Coke gets proactive
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- Figure 27: Diet Coke, “Like What You Like/Because I Can,” February 2018
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- Figure 28: Diet Coke, “Twisted Mango,” February 2018
- Rebranding of Coca-Cola Zero with refreshed look and new taste
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- Figure 29: Coca-Cola Zero Sugar, January 2018
- Expanded craft/premium CSDs from major suppliers
- Health and digestive benefits in ginger ale and other natural craft sodas
- Natural craft CSDs with floral essences, botanicals, sophisticated tastes
The Consumer – What You Need to Know
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- Consumption is high, especially among younger adults and parents
- CSDs widely used on weekends, special occasions and as treats
- “Refreshing” is top quality sought in CSDs, but many others follow
- Dedicated regular CSD and diet CSD users have distinct profiles
- Brand allegiance is fairly strong, but lower among younger consumers
- Consumers favor sweeteners with a more natural profile
- Majority seek familiar tastes, but interest fairly high for craft CSDs
Consumption of Carbonated Drinks
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- Vast majority enjoy a range of CSDs
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- Figure 30: Carbonated drinks consumed in past three months, February 2018
- Younger consumers enjoy more regular CSDs, older ones turn to diet
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- Figure 31: Carbonated soft drinks consumed in past three months, by age, February 2018
- Younger adults also over index for other carbonated drinks
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- Figure 32: Non-CSD carbonated drinks consumed in past three months, by age, February 2018
- More affluent HHs show preference for low calorie, natural CSDs
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- Figure 33: Carbonated soft drinks consumed in past three months, by household income, February 2018
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- Figure 34: Non-CSD carbonated drinks consumed in past three months, by household income, February 2018
- Parents consume a greater number, wider range of CSDs
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- Figure 35: Consumption of regular cola and other soft drinks, for children aged 6-11
- Figure 36: Consumption of regular cola and other soft drinks, for teens aged 12-17
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- Figure 37: Carbonated soft drinks consumed in past three months, by parental status, February 2018
- Figure 38: Non-CSD carbonated drinks consumed in past three months, by parental status, February 2018
- Black consumers drink more regular CSDs, White consumers seek low-sugar options
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- Figure 39: Carbonated soft drinks consumed in past three months, by race, February 2018
- Figure 40: Non-CSD carbonated drinks consumed in past three months, by race, February 2018
- Hispanics over index for natural and craft sodas
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- Figure 41: Carbonated soft drinks consumed in past three months, by Hispanic origin, February 2018
Consumption Occasions
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- CSD usage climbs on weekends, at celebrations, and as treats
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- Figure 42: Occasion for beverage consumption, Part I, February 2018
- Figure 43: Occasion for beverage consumption, Part II, February 2018
- 18-34 year olds embrace regular and craft CSDs for special occasions
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- Figure 44: Occasion for CSD consumption, by age, February 2018
- Less affluent consumers favor regular and craft CSDs for celebrations and treats
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- Figure 45: Occasion for CSD consumption, by household income, February 2018
- Parents post high usage of CSDs for special occasions
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- Figure 46: Occasion for CSD consumption, by parental status, February 2018
Qualities Sought in Ideal CSD
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- Ideal CSD is above all “refreshing,” and more
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- Figure 47: Qualities of ideal CSD, February 2018
- Refreshment is key quality across age brackets
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- Figure 48: Qualities of ideal CSD, by age, February 2018
- Less affluent consumers associate CSDs with more aspirational qualities
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- Figure 49: Qualities of ideal CSD, by household income, February 2018
- Refreshment key for nonparents, parents seek energy and indulgence
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- Figure 50: Qualities of ideal CSD, by parental status, February 2018
- Black consumers desire a range of positive qualities
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- Figure 51: Qualities of ideal CSD, by race, February 2018
CSD Preferences in Terms of Type and Brand
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- Dedicated regular CSD users index somewhat younger and less affluent
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- Figure 52: Mostly drink regular CSDs, by age, gender, HH income, February 2018
- Staunch diet CSD users tend to be older, female, and more affluent
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- Figure 53: Mostly drink diet CSDs, by age, gender, HH income, February 2018
- Older consumers less likely to switch types or look at type of sweetener
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- Figure 54: CSD preferences, by age, February 2018
- Women trade less between CSD types, pay more attention to sweeteners
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- Figure 55: CSD preferences, by gender, February 2018
- About half of consumers report brand allegiance
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- Figure 56: CSD preferences related to brand, by age and household income, February 2018
Types of Sweeteners in CSDs
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- Consumers favor sweeteners with a more natural profile
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- Figure 57: Types of sweeteners preferred, February 2018
- Consumer age impacts sweetener preference
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- Figure 58: Most appealing sweetener in CSDs, by age, February 2018
- More natural sweetener options favored by both men and women
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- Figure 59: Most appealing sweetener in CSDs, by gender, February 2018
- Stevia stands out as a preferred sweetener of more affluent consumers
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- Figure 60: Most appealing sweetener in CSDs, by household income February 2018
Attitudes toward Flavors, Craft Sodas, and Taxes
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- Majority seek familiar tastes, but interest fairly high in new craft CSDs
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- Figure 61: Attitudes toward flavors, craft sodas, and sugar taxes, February 2018
- Younger consumers more open to new flavors and craft/premium CSDs
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- Figure 62: Attitudes toward flavors, craft sodas, and sugar taxes, by age, February 2018
- Parents open to new CSDs, but may cut back more if faced with tax
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- Figure 63: Attitudes toward flavors, craft sodas and sugar taxes, by parental status, February 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – Market
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- Figure 64: Total US retail sales and forecast of carbonated soft drinks, at inflation-adjusted prices, 2012-22
- Figure 65: Total US sales and forecast of regular soft drinks, at inflation-adjusted prices, 2012-22
- Figure 66: Total US sales and forecast of diet soft drinks, at inflation-adjusted prices, 2012-22
- Figure 67: Total US retail sales of carbonated soft drinks, by retail channel, at current prices, 2012-17
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Appendix – Key Players
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- Figure 68: MULO sales of regular soft drinks by leading companies and brands, rolling 52 weeks 2016 and 2017
- Figure 69: MULO sales of diet soft drinks by leading companies and brands, rolling 52 weeks 2016 and 2017
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Appendix – Consumer
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- Figure 70: Number of glasses of regular cola soft drinks in the past week, for children 6-11
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- Figure 71: Number of glasses non-cola soft drinks in the past week, for children 6-11
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- Figure 72: Number of glasses of regular cola soft drinks in the past week, for teens 12-17
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- Figure 73: Number of glasses of other regular soft drinks in the past week, for teens 12-17
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- Figure 74: Number of glasses of diet cola soft drinks in the past week, for teens 12-17
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- Figure 75: Number of glasses of regular cola soft drinks in the past week, for teens 12-17
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