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Report: Beverage Sales Edge Up In 2012, CSDs Continue Decline

Posted On: 4/1/2013

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TAGS: beverage study, beverage volume, vending machine soda, beverage consumption, cold drinks, water sales, RTD sales, energy drink trends, U.S. liquid refreshment beverage market, Beverage Marketing Corp., CSD sales, carbonated soft drinks, RTD coffee, Gatorade, Powerade, Coke Zero, Dr Pepper, Coca-Cola, Coke, Pepsi-Cola, Nestlé Pure Life, Dasani, Michael C. Bellas

NEW YORK CITY -- The U.S. liquid refreshment beverage market grew by 1% in 2012, according to preliminary data from Beverage Marketing Corp. This marked a third year of growth, after two consecutive declines. It also represented faster growth than occurred the year before.

Carbonated soft drinks remained by far the biggest liquid refreshment beverage category, but continued to lose both volume and market share. The weakened economy hindered beverage performance in 2008 and 2009, according to BMC, and improving conditions contributed to their upticks in 2010, 2011 and 2012.

Total liquid refreshment beverage volume approached 29.8 billion gallons in 2012, according to BMC. Niche categories outperformed traditional mass--market categories.

Such premium beverages as ready-to-drink tea and coffee and (especially) energy drinks advanced forcefully during 2012. Aggressive pricing contributed to the sizeable increase in bottled water volume, according to the research firm. Larger and established segments like carbonated soft drinks and fruit beverages remained flat once again.

Energy drinks moved forward faster than all other segments, with a 14.3% volume increase in 2012. The segment, however, accounted for a relatively small share of total liquid refreshment beverage volume. The only beverage types with smaller shares of volume were RTD coffee, which charted the second-fastest surge, growing by 9.5%, and value--added water, which contracted during the year. Not surprisingly, however, no energy drink, RTD coffee or value-added water brand ranked among the leading trademarks by volume.

In the sports beverage category, Gatorade (including all brand variations) was the fifth-largest beverage trademark during the year, and the category it led grew faster than the overall liquid refreshment beverage market, BMC reported. The brand topped 1 billion gallons for the first time in 2011 and remained above that level in 2012, despite its decline. Its chief rival, Powerade, also drove category growth.

Carbonated soft drink volume slipped by 1.8% from 13.6 billion gallons in 2011 to 13.3 billion gallons in 2012, which reportedly lowered its market share from 46% to less than 45%.

Despite the overall decline, certain soda trademarks, such as Coke Zero and Dr Pepper, grew. Additionally, CSDs accounted for four of the 10 biggest beverage trademarks during 2012, with Coca-Cola and Pepsi-Cola retaining their usual first and second positions.

Bottled water held three of the leading trademarks in 2012, according to BMC. The category climbed 5.8% in 2012, and two of the three biggest brands -- Nestlé Pure Life and Dasani -- grew significantly faster.

RTD tea grew by nearly 5% in 2012, according to beverage researcher's data.

Four companies accounted for all of the leading refreshment beverage trademarks. Pepsi--Cola had four brands, including the only fruit beverage brand to make the list, Tropicana. Coca-Cola had three, Nestlé Waters North America had two and Dr Pepper Snapple Group had one.

"Beverages showed gathering strength in 2012," said Michael C. Bellas, chairman and chief executive of Beverage Marketing Corp. "While an improving economy remains the key impetus for beverage category success, the vitality of premium products like energy drinks and RTD coffee shows that Americans' thirst for both functional and fun products is strong."