Beverages

U.S. Soda Consumption Decline Continues

Excluding energy drinks, volume down 1.5% last year

NEW YORK -- U.S. carbonated soft drink consumption fell faster last year as strength in energy drinks failed to offset weakness in traditional sodas from The Coca-Cola Co. and PepsiCo Inc., according to Reuters, citing Beverage Digest.

Total sales volume of soda fell about 1% in 2011 to 9.27 billion cases, said Beverage Digest, about the same level it was in 1996. Sales volume fell 0.5% in 2010.

Excluding energy drinks such as Red Bull and Rockstar, soda volume was down 1.5% last year, the industry publication said.

"Carbonated soft drinks, while still the biggest category, are playing a declining role in Americans' beverage consumption," it said.

Soda sales in the United States grew about 3% annually throughout most of the 1990s but began to slow in 1999. Sales have been in decline since 2005 as increasingly health-conscious consumers turn to options they see as healthier, such as bottled water, juice and tea.

Americans on average drank 714 eight-ounce servings of carbonated soft drinks last year, down from 728 in 2010, Beverage Digest said, noting that consumption was the lowest since 1987.

At retail, revenue rose about 2% to $75.7 billion.

The publication estimated that prices were up about 3% last year as manufacturers sought to pass through some of the increase in costs of raw materials including corn syrup, used as a sweetener. Those price increases likely contributed to the volume weakness.

Including bottled waters, juice drinks, teas and sports drinks, bottled beverage sales rose 0.8% to 15.2 billion cases in 2011, said the publication. That represented a slowdown from 2010, when sales rose 1.7%.

According to separate data released by Beverage Marketing Corp, premium-priced drinks such as bottled tea and coffee, sports drinks and energy drinks performed well in 2011, said Reuters.

Still, the research, consulting and financial services firm said the economy had an impact.

"Higher prices did almost certainly contribute to 2011's deceleration as lower-income consumers continued to struggle," the company said.

According to Beverage Digest, the top four sodas--Coke, Diet Coke, Pepsi-Cola and Mountain Dew--all saw declining sales last year. Of those, Coke's market share was flat, while the other three all lost share.

Including all bottled drinks, Coca-Cola cornered 34% of the market, followed by PepsiCo with nearly 27%, Dr Pepper Snapple Group Inc. with 11%, and Nestle Waters North America with about 10%, said the report.

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