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Carbonated Soft Drinks: Spotlight on Natural/Craft - US - June 2015

Published By :

Mintel

Published Date : Jun 2015

Category :

Non-Alcoholic Drinks

No. of Pages : N/A

The CSD category has faced several years of sales declines, the result of artificial ingredients, sweeteners, sugar concerns, links to obesity and diabetes, and other health issues. Total retail sales of carbonated soft drinks (CSDs) is expected to decline as negative diet soda sales continue to overtake regular sales gains. The category struggles as the diet CSD segment sours and leading companies increase prices to make up for lost sales volume. Opportunities exist in the category to strengthen brand trust, authenticity, and experience, particularly through trending natural and craft CSDs segments.
Table of Content

Overview

What you need to know
Definition

Executive Summary

The issues
Category sales are declining
Figure 1: Total US sales and fan chart forecast of carbonated soft drinks, at current prices, 2010-20
Unfamiliarity, high prices hinder success in craft segment
Figure 2: Negative craft CSD attributes, March 2015
Health concerns continue to plague category
Figure 3: Attitudes and behaviors toward craft and natural CSD, March 2015
The opportunities
Interest in craft and natural
Figure 4: Craft CSD interest, March 2015
Opportunities to highlight natural/premium ingredients
Figure 5: Positive craft CSD attributes, March 2015
Evolution of expectations
Figure 6: Attitudes and behaviors toward craft and natural CSD, March 2015
What it means

The Market - What You Need to Know

Category sales declines forecast to continue
Regular segment sees positive gains, diet decline continues
Race, presence of children drive CSD consumption

Market Size and Forecast

Category decline to continue
Figure 7: Total US sales and fan chart forecast of carbonated soft drinks, at current prices, 2010-20
Figure 8: Total US retail sales and forecast of carbonated soft drinks, at current prices, 2010-20
Figure 9: Total US retail sales and forecast of carbonated soft drinks, at inflation-adjusted prices, 2010-20

Market Breakdown

Regular CSDs recover slightly; diet continues to suffer
Figure 10: Total US retail sales and forecast of carbonated soft drinks, by segment, at current prices, 2010-20
Segments struggle through 2020
Figure 11: Total US retail sales and forecast of carbonated soft drinks, by segment, at current prices, 2010-20
Retail sales stagnant from 2013-15
Figure 12: Total US retail sales of carbonated soft drinks, by channel, at current prices, 2013 and 2015
Natural channel sales grow 14.3% from 2013-15
Figure 13: Natural supermarket sales of carbonated beverages, at current prices, rolling 52 weeks February 2013-February 2015
Natural sugar, sweetened CSDs experience growth
Figure 14: Natural supermarket sales of carbonated beverages, by type of sweetener, at current prices, rolling 52 weeks ending 2/24/13 and 2/22/15

Market Factors

Hispanic and Asian populations growing
Figure 15: Population by race and Hispanic origin, 2010-20
Presence of children influences consumption
Older Millennials
Figure 16: Households with own children, by age of householder, 2013
Hispanics and Asians
Figure 17: Households with own children, by race and Hispanic origin of householder, 2013

Key Players – What You Need to Know

Leading company MULO sales stall
Regular CSDs post slight gains
Diet CSDs MULO sales continue to decline

Manufacturer Sales of CSDs

Leading company sales remain flat
Manufacturer sales of carbonated soft drinks
Figure 18: MULO sales of carbonated soft drinks, by leading companies, rolling 52 weeks 2014 and 2015

What’s Working?

Regular Coca-Cola brands’ dollar sales recover slightly
Figure 19: Coca-Cola brand consumption, trended 2010-14
Fanta continues growth
Dr Pepper flagship a priority
Figure 20: Dr Pepper brand consumption, trended 2010-14
Squirt, ginger ale brands help fuel growth
Figure 21: Ginger Ale brand consumption, by brand, trended 2010-14
PepsiCo commits to Mountain Dew
Figure 22: Mountain Dew brand consumption, trended 2010-14
Figure 23: MULO sales of regular soft drinks, by leading companies and brands, rolling 52 weeks 2014 and 2015

Who’s Struggling?

The fall of artificial sweeteners in CSDs
Diet consumption decreasing
Figure 24: Diet CSD consumption, by brand, trended 2010-14
Figure 25: Diet CSD consumption-average # of drinks in last 7 days, by brand trended 2010-14
New campaigns to win back drinkers
Private label
Figure 26: Store brand CSD consumption, by type, trended 2010-14
Figure 27: MULO sales of regular soft drinks, by leading companies and brands, rolling 52 weeks 2014 and 2015
Figure 28: MULO sales of diet soft drinks, by leading companies and brands, rolling 52 weeks 2014 and 2015

What’s Next? – Natural and Premium

Natural CSDs
Real ingredients
Unique flavor experiences
Naturally sweetened
Natural CSDs with plant-based sweeteners dominate diet sales growth
Leading companies get sweet, naturally
Craft CSD pick up
National craft brewers

What’s Coming? – Evolution to Carbonated Beverages

Healthy sodas
Kombucha soda
Soda by another name
Non-alcoholic sparkling/carbonated beverages
CSD alternative and a mixer

The Consumer – What You Need to Know

Consumers interested in craft
Millennials, parents, Asian and Hispanics core craft/natural consumers
Natural perceived as healthier

Craft Interest

44% of non-drinkers interested in trying craft CSDs
Figure 29: Craft CSD interest, March 2015
Real, premium ingredients strongest draw
Figure 30: Positive craft CSD attributes, March 2015
Unfamiliarity, high price reasons for disinterest
Figure 31: Negative craft CSD attributes, March 2015

Millennials Core Craft Consumers

Opportunity with older Millennials
Figure 32: Craft CSD consumption – Any consumption, by generations, March 2015
Young Millennials open to trial
Figure 33: Craft CSD interest, by generation, March 2015
Natural ingredients drive interest
Figure 34: Positive craft CSD attributes, March 2015
Young Millennials unfamiliar, older Millennials price sensitive
Figure 35: Negative craft CSD attributes, by generation, March 2015

Non-Millennial Craft Potential

Some craft interest, opportunities with Gen Xers
Figure 36: Craft CSD interest, by generations, March 2015

Fathers and Mothers Heavy Craft Users

Fathers are core consumers, opportunities with mothers
Figure 37: Craft CSD consumption – Any consumption, by parental status, March 2015
Parents interested in craft trial
Figure 38: Craft CSD interest, by parental status, March 2015
Ingredients most important
Figure 39: Positive craft CSD attributes, by parental status, March 2015
Health, high prices fuel disinterest
Figure 40: Negative craft CSD attributes, by parental status, March 2015

Asian and Hispanic Craft Users

Asians and Hispanics are heavy craft users
Figure 41: Craft CSD consumption – Any consumption, by race and Hispanic origin, March 2015
Interest/disinterest similar across race groups
Figure 42: Craft CSD interest, by race and Hispanic origin, March 2015

Craft Purchase Locations

Stronger craft presence at supermarkets, mass merchandisers
Figure 43: Craft CSD purchasing locations, March 2015

The Natural CSD Consumer

Millennials
Figure 44: Natural and Stevia-sweetened CSD consumption – Any consumption, by generations, March 2015
Parents
Figure 45: Natural and Stevia-sweetened CSD consumption – Any consumption, by parental status, March 2015
Hispanics and Asians
Figure 46: Natural and Stevia-sweetened CSD consumption – Any consumption, by race and Hispanic origin, March 2015

Natural CSD Association with Health

Natural/organic CSDs perceived as healthier/more nutritious
Aversions to artificial sweeteners
Figure 47: Attitudes and behaviors toward natural CSDs, March 2015

Natural CSD Purchase Locations

More options at supermarket, mass merchandiser
Figure 48: Natural CSD purchasing locations, March 2015

Providing a Flavor Experience

Figure 49: Attitudes toward craft/natural CSDs

Appendix – Data Sources and Abbreviations

Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations

Appendix – Market

Regular soft drinks
Figure 50: Total US retail sales and forecast of regular soft drinks, at current prices, 2010-20
Figure 51: Total US retail sales and forecast of regular soft drinks, at inflation-adjusted prices, 2010-20
Diet soft drinks
Figure 52: Total US retail sales and forecast of diet soft drinks, at current prices, 2010-20
Figure 53: Total US retail sales and forecast of diet soft drinks, at inflation-adjusted prices, 2010-20
Total market by retail outlet
Figure 54: Total US retail sales of carbonated soft drinks, by channel, at current prices, 2010-15

Appendix – Key Players

Figure 55: MULO sales of regular soft drinks, by leading companies and brands, rolling 52 weeks 2014 and 2015
Figure 56: MULO sales of diet soft drinks, by leading companies and brands, rolling 52 weeks 2014 and 2015

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