CSD volume in Canada grows +4.8% to 623 mil 192-oz cases last year. Compares to +3% growth in US (BD 2/12/99). Per capita consumption at 493 eight-oz servings in 1998 vs 471 in 1997, according to Canadian Soft Drink Association (CSDA). Canadian executives say 1998 characterized by "brutal" retail pricing. But executives say volume helped by rollout of 600 ml (about 20-oz) PET bottles in vending and cold-bottle channels. Coke's corporate share jumps +1.3 points. Diets increase share vs regular; bottle/can (b/c) is up vs fountain.

Industry challenges in Canada. At CSDA's annual meeting May 19, out-going Pepsi Canada president and association chairman David Shaw issues industry "call to action": "Our goal is ... to eliminate barriers to our growth." Lists 4 main areas of concern: 1) retailer consolidation: "As retailers become more powerful, they are able to flex their muscles." Points out "less than a dozen" supermarket chains now compete in Canada and "several" major grocers push for end to direct-store-door (DSD) delivery. Shaw says "we need to broaden where we do business" and "we must maintain our way of going to market." 2) innovation: Cites success of 600-ml bottles and Canada-wide introduction of Barq's and Mug root beers. Concludes "we need both products and packages to meet every thirst occasion." 3) government regulation: Urges continued vigilance on deposit and recycling laws. 4) preservation of CSDA: Shaw notes "(CSDA) serves as a common ground" for competing companies with common interests. Specifically urges CSDA "to work together as one voice and for all soft drink companies" including private label giant Cott, which resigned from CSDA several years ago.

Shares. Table shows 1998 corporate shares and changes vs 1997 for overall business, b/c channels and fountain channel. In Canada, Pepsi owns 7UP and distributes Dr Pepper under master license agreement with Cadbury. A&W, owned in US by Cadbury, is independent company in Canada; distributed in fountain to A&W restaurants by Coke system; elsewhere Coke uses Barq's.

Diet/regular. CSDA says diet brands capture 25 share of volume in 1998, up +2.8 points vs 1997 (BD 7/2/98). Diet's gain builds on 1997 upward trend.

Channels. CSDA says b/c channels account for 83.1 share of volume, fountain 16.9 B/c up +0.3 points vs 1997, fountain down -0.3. Canadian executive says supermarket channel accounts for about 55% of total volume. Packages. CSDA reports: 41.6% of volume in cans, 41.5% in PET/glass bottles and 16.9% in fountain.

Bottling systems. Coke bottling system -- made up of Coca-Cola Enterprises plus 12 other bottlers -- holds 44.5 share of all-channel Canadian volume, up +0.9 vs 1997. Coke bottlers handle Coke products plus 90.2% of Canada Dry, 9.1% of Schweppes. Coke ceases distribution of A&W in b/c as Barq's rolls out in 1998. Pepsi system -- made up of Pepsi Bottling Group plus 21 others -- handles 39.2 share of industry volume, down -0.7 share. Pepsi system handles all Pepsi, Crush and Dr Pepper plus 90.9% of Schweppes and 9.8% of Canada Dry.

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