The U.S. carbonated soft drink market's long struggle to achieve growth persists. After six straight years of sub–1% growth, volume declined for the third straight year in 2007. Prior to 2005, the market had not declined in at least 20 years. U.S. carbonated soft drink volume has not increased at an annual rate greater than 1.0% since 1998, and over the course of the nine–year period since then, it has actually decreased at a compounded annual rate of 0.1%. In 2007, volume decreased by 2.6% to 14.7 billion gallons (9.8 billion cases) from 15.1 billion gallons (10.1 billion cases) in 2006.
For years — decades — average intake of carbonated soft drinks consistently edged upward. From the early 1970s to the late 1980s, per capita consumption more than doubled. In 1998, volume per person neared 55 gallons. By 2007, however, that figure had fallen to less than 49 gallons. Despite this dip in average intake levels, U.S. consumers still drink roughly two–thirds more soft drinks than bottled water, the number–two beverage by volume.
Although virtually every type of CSD — including both regular and diet as well as cola and the other major flavors — contracted in 2008, volume did not decline in all distribution channels. Mass merchandisers have been a fast growing distribution channel for carbonated soft drinks recently. After accounting for less than 8% of volume in 2002, their share exceeded 10% five years later. Unlike supermarkets, mass retailers continued to position CSDs as loss leaders. A mass merchandiser such as Target can justify the CSD loss leader positioning by selling high margin clothing, cosmetics and home products that are often purchased on impulse. During the same timeframe, club stores enlarged their share from less than 2% to almost 4%. Clubs' 24– and 36–count multi–packs appeal to consumers looking to stock their pantries and to owners of bodegas and other small resale businesses.
Today, while supermarkets remain the single largest retail channel for carbonated soft drinks, marketers have placed great emphasis on making their products available through every major retail channel – from convenience stores to drug stores and mass merchandisers.
| Charlene Salito +1 212-688-7640 ext. 1962 |
