09 Apr 2014 Decline in soft drink sales accelerates despite big marketing spend

That’s despite the efforts of Coca-Cola, PepsiCo and Dr Pepper Snapple Group to market lower-calorie sodas, like Pepsi Next and Dr Pepper Ten, as well as a variety of packaging options such as smaller cans.

In the last year, Coca-Cola has also responded to the obesity debate with a series of ads meant to encourage consumers to be active.

Carbonated soft drink volume declined 3% in 2013, compared to a 1.2% decline in 2012 and a 1% decline in 2011, according to Beverage Digest. The category has seen declines for the last nine years, despite the industry’s massive advertising and marketing outlays. Two years ago, PepsiCo committed to spend an additional $500 million to $600 million on its core brands, of which Pepsi is one.

More recently, Coca-Cola committed to spending an additional $1 billion on media and brand-building efforts by 2016.

“The industry’s headwinds are not abating, and results are worsening,” said John Sicher, editor and publisher at Beverage Digest. “This puts a premium on sweetener innovation.”

The major beverage players have all been working to develop natural, low-calorie sweeteners as consumers shy away from the artificial sweeteners in diet sodas and the calories in traditional sodas.

Still, soft drinks remain the largest single beverage category, controlling about 43% of the market, according to Beverage Marketing Corporation. Categories that did see growth in 2013 include ready-to-drink coffee, energy drinks, bottled water, sports drinks and ready-to-drink tea.

In addition to soft drinks, fruit beverages and enhanced waters saw declines.

“Beverages endured a transitional year in 2013,” said Michael Bellas, chairman-CEO at Beverage Marketing Corporation. “Even in the face of economic challenges, healthier products thrived and even formerly floundering segments like ready-to-drink coffee demonstrated their potential. Certainly the state of the economy is crucial for overall beverage category success, but so are products that connect with the evolving American consumer.”

Source: Beverage Digest, AdAge.com