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Soda Sales Fizzle, Premium Beverages Drive Growth

Posted On: 3/21/2012

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soda sales, beverage study, RTD tea, ready-to-drink tea and coffee, sports beverages, energy drinks, 2011 beverage trends, Beverage Marketing Corp., Coca-Cola, Pepsi-Cola, Michael C. Bellas

NEW YORK CITY -- Ready-to-drink tea and coffee, sports beverages and energy drinks drove modest growth in the beverage market during 2011. But larger, more established segments like carbonated soft drinks and fruit beverages failed to grow another time, according to Beverage Marketing Corp.

The overall U.S. liquid refreshment beverage market grew less than 1% in 2011, according to the New York City-based research firm. This marked a second year of growth after two consecutive declines, but it also represented a slowdown from 2010.

A weak economy hindered beverages sales in 2008 and 2009, and improving conditions contributed to their upticks in 2010 and 2011, according to BMC. Higher prices were almost certainly responsible for 2011's deceleration.

Energy drinks reportedly grew faster than all other segments with a 14.4% volume increase in 2011. Despite this advance, the segment only accounted for a small share of total liquid refreshment beverage volume.

The only liquid refreshment beverage type with a smaller share of volume was ready-to-drink coffee, which charted the second-fastest surge in 2011, growing by 9.4%.

The sports drink category grew 8.8% in 2011, with Gatorade ranking the fifth-largest trademark of all beverage brands during the year. RTD tea sales climbed almost 5% in 2011.

Like the beverage marketplace as a whole, bottled water declined in 2008 and 2009 but recovered in 2010, when volume grew 3.5%. Bottled water's growth accelerated in 2011, when volume swelled 4.1%. Bottled water held three of the leading trademarks in 2011.

CSDs were still the biggest liquid refreshment beverage category, but they continued to lose both volume and market share. Volume slipped 1.7% from 13.8 billion gallons in 2010 to 13.6 billion gallons in 2011, which lowered their market share from 47% to 46%.

Still, certain soda brands, such as Dr Pepper and Coke Zero, did achieve growth. And CSDs accounted for four of the 10 biggest beverage trademarks during 2011, with Coca-Cola and Pepsi-Cola retaining their usual first and second positions, respectively.

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 while Nestlé Waters North America had two and Dr Pepper Snapple Group had one.

"Beverages' continued growth in 2011 proved their essential vitality," said Michael C. Bellas, chairman and chief executive of Beverage Marketing Corp. "The strong showing by high-end and functional products shows that consumers -- at least the more affluent ones -- are not concerned exclusively with economic considerations when making their beverage selections."

US Beverage Market Charts