Latest Beverage Stats Positive for All But CSDs
Growing categories include teas, bottled water, isotonics, energy drinks
NEW YORK -- In recent months, beverage makers have promised new flavors, new packaging and new marketing to give the carbonated-soft-drink category a boost. And it's much needed as category sales continue to sag across all channels.
Total CSD dollar sales declined 2.1% (and -1.9% for 12 weeks) in the latest XAOC (expanded all outlets combined) Nielsen period during the 4 weeks ending March 15, 2014 (vs. -3.4% in the prior year), according to a recent research report from analyst Bonnie Herzog of Wells Fargo Securities, New York. This drop is "driven by equivalent-unit pricing declines of 2.3% and equivalent-unit volume gains of 0.2%," she wrote. "Downward pressure remains on diet CSDs, with dollar sales down 7.3%."
In other beverage categories, Herzog noted:
- Liquid teas had modest dollar sales growth of 1.1%, while isotonics were up a solid 4.9%.
- Bottled-water dollar sales were up 3.2%, while sparkling water continues to be one of the fastest-growing categories, up 26.2%.
- Energy [drink] dollar sales were up a solid 8.3%, led by Monster's strong 16.0% growth (including Muscle Monster), offset by Red Bull +6.3%.
"Bottom line," she summarized, "given ongoing pressure on CSDs, we generally remain cautious going into Q1 earnings results."
Specifically, Herzog noted that Coca-Cola's total company dollar sales declined 0.3% for the recent 4 weeks (and -0.6% for 12 weeks). Total CSD dollar sales declined 0.8% (-1.4% for 12 weeks) on 3.7% equivalent unit sales (volume) increase and 4.4% pricing.
PepsiCo's CSD sales also remain weak, she said. Total company dollar sales declined 0.5% (and +1.1% for 12 weeks), as salty snacks posted a 0.4% sales decline in the recent 4-week period, the first decline in well over a year. Total CSD dollar sales were down 1.2% (and -0.6% for last 12 weeks) on 0.7% equivalent unit sales (volume) increase and 1.8% average equivalent unit-price decrease. "While CSD performance continues to remain weak, we acknowledge that PepsiCo at least maintained value and volume share this period."
And Dr Pepper Snapple Group dollar sales declined 3.1% in the recent 4 weeks (and -2.2% for 12 weeks). CSD dollar sales fell 2.8% (-2.0% for 12 weeks) on 0.2% equivalent unit sales declines despite -2.6% equivalent unit pricing. "DPS' diet CSD portfolio suffered the most relative to its peers, with dollar sales down nearly 10%," Herzog wrote. "Bottom line, DPS' performance this period lagged its underperforming peers, with volume and value share declines across the majority of its portfolio. We expect Q1 earnings may come under pressure as a result."