CSD Dollar Growth Continues for a Third Month
Energy-drink sales "soft" on back of fewer promotions
NEW YORK -- A third month of dollar-sales growth suggest carbonated soft drinks may have gotten their legs back under themselves after several months of decline.
Total carbonated-soft-drink (CSD) dollar sales ticked up 0.9% in all retail channels during the four-week period ending Nov. 22, according to Nielsen data cited by beverage analyst Bonnie Herzog of Wells Fargo Securities. While unit volume sales continue to decline, dollar sales of CSDs were up 0.5% for most recent 12-week period, also ending Nov. 22.
This increase is "driven by equivalent unit pricing increases of 3.1% and equivalent unit volume declines of 2.1%."
Coca-Cola continues to lead CSD dollar growth (up 1.5% during the four-week period) while still seeing a unit-sales decline of 3.1%. The contrast shows that Coca-Cola is leading pricing growth in CSDs, up 5.0% during the period, leading Herzog to conclude, "We continue to believe pricing will become an increasingly important driver of sales growth in CSDs."
PepsiCo, meanwhile, saw total company dollar sales up 3.3% for the recent 4 weeks (+1.8% for 12 weeks), mostly on the recovery of salty snacks. Total CSD dollar sales were up 1.1% (-0.4% for last 12 weeks) on 0.8% pricing and
0.2% equivalent unit volume growth. "We note that for this period, PepsiCo underpriced its CSDs relative to its peers, which led to positive volume growth and share gains, albeit with sales growth still below that of Coca-Cola," Herzog wrote. "[We] question whether PEP’s divergent pricing in CSDs is sustainable,"
Dr Pepper Snapple Group, following Coca-Cola's lead of price increases, saw total company dollar sales down 0.3% in the recent 4 weeks (+0.1% for 12 weeks), according to the report. CSD dollar sales were flat (+0.6% for 12 weeks) on 3.2% equivalent unit sales declines and +3.2% equivalent unit pricing.
In other beverage categories for the four-week period:
- Liquid teas remain strong with dollar sales growth of 9.1%.
- Sports drinks were up 4.8%, led by ongoing strength in Gatorade.
- Bottled-water dollar sales were up 4.2%.
- Energy-drink dollar sales were up 9.2% despite somewhat soft results from Monster in the take-home channel.
Total company dollar sales at Monster were up only 5.7% in the recent four weeks (+10.7% for 12 weeks), driven by 4.9% growth in equivalent unit pricing and particularly soft 0.8% growth in equivalent units. "Monster sold only 29.4% of volume on promo this period, a 14.6% decline from last period, when 44.0% was sold on promo," Herzog wrote. "We believe this is an anomaly of timing of promos and fully expect that sales growth will return to solid double-digit growth soon, especially given new products."
She also noted that Coca-Cola's energy-drink portfolio, which Monster is to absorb as part of a brand-swap deal, was up a solid 27.2% this period.