Energy Drinks See Continued Growth

Beverages 2013

Soft Drink Volume and Share Decline

The U.S. liquid refreshment beverage market grew by 1 percent in 2012, according to newly released preliminary data from Beverage Marketing Corp. This marks a third year of growth after two consecutive declining years. It also represents faster growth than occurred the year before. Total liquid refreshment beverage volume approached 29.8 billion gallons in 2012.

Carbonated soft drinks remained by far the biggest category, but lost both volume and market share during 2012. Volume slipped by 1.8 percent from 13.6 billion gallons in 2011 to 13.3 billion gallons in 2012, which lowered their market share to less than 45 percent. While the segment faltered, certain soda trademarks, such as Coke Zero and Dr Pepper, did achieve growth. According to published reports, the soda industry has seen ­declines since 2005, but 2012’s soda consumption figures ­represent a 26-year low.

Reports speculate that soda’s decline stems from health advocates, who point to soda as a cause of the obesity epidemic. Soda companies won’t be discouraged, though, as The Coca-Cola Co. has jumped into the obesity debate with ads that tout the company’s efforts in improving its products. In its “Coming Together” commercial, the Atlanta-based company emphasizes its philosophy of bringing people together and then claims it has reduced calories per serving in its drinks by an average of 22 percent due to smaller pack sizes and low- and no-calorie versions of its drinks. A statement that “all calories count” ends the commercial, suggesting that all industries and consumers share the blame for obesity. However, reactions from New York Mayor Michael Bloomberg’s recent attempt to ban large sodas at restaurants—backed by some media voices, such as CNN’s opinion piece, “Banning Large Sodas is Legal and Smart”—have overshadowed the industry’s efforts to ease concerns over sugar content. Negative attention from health and wellness organizations—like the Harvard School of Public Health saying the drinks cause kidney damage and cancer in addition to obesity—probably won’t help the industry’s 2013 figures either.

Other segments show growth

Premium beverages, such as ready–to–drink (RTD) tea, coffee and energy drinks, advanced during 2012. Energy drinks moved forward faster than all other segments with a 14.3 percent volume increase in 2012, even though the segment is a relatively small share of the industry. The only liquid refreshment beverage types with smaller shares of volume were RTD coffee, which charted the second fastest surge, growing by 9.5 percent, and value-added water, which contracted.

RTD tea grew by nearly 5 percent in 2012.

“Beverages showed gathering strength in 2012,” said Michael C. Bellas, chairman and CEO 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.”

New York City–based Beverage Marketing Corp. is the leading research, consulting and financial services firm dedicated to the global beverage industry.

Coffee consumption increasing

More Americans are turning to coffee than in previous years, according to a report from the Drinks Business Review. A market research study by the National Coffee Association found that coffee consumption increased by 5 percent from the previous year.

Daily consumption has not changed and stays at 63 percent, but those reporting drinking coffee at least once a week increased to 75 percent, the report says.

Thirteen percent of the U.S. population drinks coffee from a ­single-cup brewer, while drip coffee use has decreased from 43 percent to 37 percent.

The study also found that those in the 18-39 age bracket drink more espresso-based drinks than seniors 60 and older, but consumption by the youngest participants (18-24) declined nine percentage points to 41 percent, while consumption for seniors 60 and older rose five percentage points to 76 percent, the report says.

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