Study Finds Renewed Growth In Beverage Markets Carbonated Soft Drinks Continue To Lose Share

NEW YORK CITY -- The U.S. liquid-refreshment beverage market enjoyed renewed growth in 2014 after having been essentially flat in 2013, according to the latest data from research firm Beverage Marketing Corp.

Beverage-specific factors, such as the vibrancy of the already-large bottled water segment, as well as broader market forces, including the continuing economic recovery, contributed to the overall increase. Liquid-refreshment beverage volume reached 30.9 billion gallons in 2014, up 2.2% from 30.2 billion gallons a year earlier, according to BMC.

Carbonated soft drinks remained by far the biggest liquid-refreshment beverage category in the U.S., but they continued to lose both volume and market share. Volume slipped by 1% from 12.9 billion gallons in 2013 to less than 12.8 billion gallons in 2014, reducing their market share from slightly less than 43% to just above 41%.

Even so, the CSD category declined more slowly than it had in previous years; and some soda trademarks, including Sprite and certain varieties of Mountain Dew, did achieve growth last year. Moreover, carbonated soft drinks accounted for five of the 10 biggest beverage trademarks during 2014, with Coca-Cola and Pepsi retaining their usual first- and second-place positions.

Bottled water growth accelerated, which BMC said is rare for a category of the size that water already has attained. Volume increased by 7.3% and pricing continued to be aggressive, which aided the category's increase.

Bottled water had four entries among the leading trademarks in 2014, up from three the year before. All four outperformed the liquid refreshment beverage category, as a whole.

Niche categories once again continued to outperform most of the traditional mass-market ones. Premium beverages such as energy drinks and ready-to-drink coffee advanced particularly forcefully during 2014. Larger, more established segments, including fruit beverages, failed to grow once again, BMC reported.

RTD coffee moved forward faster than all other segments, with a 10.7% volume increase in 2014, according to the BMC report. However, the segment accounted for a tiny share of total liquid refreshment beverage volume. The research firm said chilled portion-packed coffee remains the smallest category, trailing even value-added water -- which registered the largest decline of any liquid refreshment beverage type other than fruit beverages or carbonated soft drinks.

Energy drinks reportedly advanced by 6.4%, but the category remained fairly modest in size. Not surprisingly, no energy drink, RTD coffee or value-added water brand ranked among the leading trademarks by volume.

Sports beverages, on the other hand, had Gatorade (including all brand variations) as the sixth-largest beverage trademark for the year. The sports beverage segment exceeded 1 billion gallons for the first time in 2011 and topped 1.4 billion gallons in 2014, BMC reported.

Four companies accounted for all of the leading refreshment beverage trademarks. PepsiCo had four brands. Coca-Cola had three, Nestlé Waters North America had two and Dr Pepper Snapple Group had one. For the first time in recent memory, no fruit beverage brand ranked among the top 10.

"Beverages rebounded in 2014," said Beverage Marketing Corp. chairman and chief executive Michael C. Bellas. "Products that connect with what contemporary consumers want, like bottled water and functional offerings, added buoyancy to the ever-changing market."

During its more than 40 years in business, New York City-based Beverage Marketing Corp. has become a leading consulting, research and advisory services firm dedicated to the global beverage industry.

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