Beverage World - May 2008 - (Page 36) [INFOCUS] GLOBAL REPORT: CARBONATED SOFT DRINKS Sipping Away CSDs are ceding market share to newer beverage categories. By Tom Strenk A ll over the globe, consumers seem to be losing their PepsiCo reports beverage volume in 2007 grew 6 percent, taste for carbonated soft drinks (CSDs), or rather, led by double-digit growth in the Middle East, China and they’re thirsting for something else, whether it be Pakistan; the company also saw high single-digit volume bottled water, ready-to-drink (RTD) tea or energy increases in India. However, much of that growth was drinks. Although CSDs are still the most popular category— non-carbonated products. “India and Pakistan are big marin the United States, for example, it comprises 48.1 percent kets in part because they are big countries, have a large popof the liquid refreshment beverage ulation base and the economics are market, with bottled water a far improving, with a growing middle second at only 28.9 percent—volclass so products are becoming umes have been generally softenmore affordable to more people,” ing for the last decade as other bevpoints out Hemphill. erages sip away at market share. However, despite these bright In the 1990s, CSDs were one of spots scattered around the globe the strongest growth categories, lifting the overall totals, CSD conaccording to New York City-based sumption continues to generally Beverage Marketing Corporation decline, especially in major markets (BMC), but that long string of 4 such as the US and parts of percent and greater volume growth Western Europe. came to an end in 1998. Volume At 14.7 billion gallons in 2007, increases remained low in the first the US still leads the world in CSD years of the new century. Although consumption, and the category still volume increases in the US, the accounts for nearly half of the liqbiggest CSD market, have tipped uid refreshment market. However, into the negative, recently the global that volume is down 2.6 percent picture has brightened with more over 2006 and share of volume than 4 percent growth in 2006, dropped two points from 50.1 perthanks to a revival in Germany cent in 2006, according to BMC. and strong growth in some parts “What’s happening in the US of the world, notably, in the market is similar to what’s happenup-and-coming markets of Eastern ing globally,” explains Hemphill. Europe, Latin America, Thailand, “People are moving toward prodIndia and China. ucts that they perceive to be healthWHILE CSDS lose market share to other beverage categories, “In developing markets where ier. So we see greater growth in marketers continue to innovate in attempts to reverse this the per-caps are low, you’ll see products that have high health and trend, adding new sweeteners and coming out with a variety of new flavors. stronger growth than you do in wellness attributes.” more mature markets,” says Gary “Obesity and other health Hemphill, BMC’s managing director. concerns may reduce demand for some of our products,” conCSD companies are taking advantage of these markets. ceded Coca-Cola in its 2007 annual report. Assuredly, that’s For example, Coca-Cola launched new CSDs in Latin one reason the company has been actively expanding its bevAmerica, Croatia, Romania and Pakistan. Overall, the company erage portfolio to non-carbonated beverages. saw unit-case beverage (including non-carbonated) volume Last year, Coca-Cola acquired glacéau, Fuze and Leao increase by 6 percent in 2007. Junior, a Brazilian herbal beverage company, and, with Coca» BEVERAGEWORLD.COM 36_BEVERAGE WORLD_MAY 2008 http://BEVERAGEWORLD.COM
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