Consumers cut their carbonated soft drink consumption at US retail during the first nine months of 2022 relative to the same period in 2021. Strong pricing growth of +14% for the total CSD category drove dollar sales almost +12% higher, according to BD data. Volume declined -2.0% (decelerating from -2.2% for the first six months of this year), reflecting a post-pandemic era of unprecedented retail pricing power and lower-than-expected price elasticity for soft drinks. While Coca-Cola and Keurig Dr Pepper posted modest volume sales declines for their CSD portfolios and outperformed the category by that measure, PepsiCo’s -5.4% volume decline was more than double the category pace, even as its pricing growth trailed that of Coca-Cola and Keurig Dr Pepper (see table). Most of the top-10 brands by volume tracked by BD saw unit sales decline at retail, and that trend was consistent across all tracked channels (see Green Sheet with this story). Regular Coke and Pepsi declined -2.3% and -3.9% respectively, while Mtn Dew fell -5.1% and Dr Pepper dropped -1.0%. Diet Coke declined -1.0%. All the top-10 brands posted strong dollar gains, with Coke, Dr Pepper, Sprite, and Coke Zero Sugar outpacing category growth.
LOOKING AHEAD. A key question facing US soft drink makers now is how long unprecedented lower price elasticity will last. Coca-Cola, PepsiCo, Keurig Dr Pepper executives have said they are watching closely for changes in consumer behavior. (See page 3 for two experts' view of what to expect.)
COKE ZERO SUGAR EDGES DIET PEPSI. Coca-Cola Zero Sugar’s +12.6% category-beating volume growth pushed the brand past Diet Pepsi, which posted a -4.6% decline at retail during the first nine months of 2022, according to BD data (see Green Sheet). Coke Zero Sugar holds the No. 7 spot in BD brand volume rankings for the period, pushing Diet Pepsi down to No. 8 by volume. Some of Coke Zero Sugar’s volume growth has come at the expense of No. 5 Diet Coke, which declined -3.6% in the period as consumers continue to age out of the product and Coca-Cola focuses investment on Coke Zero Sugar. PepsiCo’s Pepsi Zero Sugar (0.9 volume share) is smaller than Coke Zero Sugar (3.9 share) and grew at less than half the rate (+5.3%) during the period (not in top-10 tables). BD notes that PepsiCo’s investment priorities for its CSD portfolio differ from Coca-Cola’s given PepsiCo’s strong market leadership in sports drinks with Gatorade, premium ready-to-drink coffee with Starbucks, and snacks with Frito-Lay. However, PepsiCo won’t likely be content to cede ground to Coke Zero Sugar given the growing consumer demand for zero sugar soft drinks, which has been boosted by continually improving artificial sweetener blends.
DRUG STORE SALES SUFFER. CSD sales at supermarkets and C-stores fared much better than at drug stores during the period (see Green Sheet). The drug channel saw double-digit volume decreases and tepid dollar sales performance compared to the CSD category for nearly every top-10 brand tracked by BD. Mass merchandisers, club and dollar stores, and the military channel (listed as “all other” in Green Sheet) fared better in aggregate with a -0.3% volume decline that was far less than the category decline and double-digit percentage dollar sales gains for most top-10 volume brands.
PRIVATE LABEL FALLS BACK TO EARTH. During this year’s inflationary period, BD has reported on signs of a consumer shift to private label CSDs as households cut back amid rising food inflation. This trend seems to have tapered, as private label volume fell -3.0% for the first nine months of this year, which was a narrower decline than the -4.8% drop posted for the first six months of this year (see Green Sheet). Dollar sales rose +11.3%, which was just shy of the category increase. Within the private label CSD segment, cola posted a slight volume increase of +0.8%, while diets declined -1.8% and flavors declined -5.7% (not shown in table). All three segments grew by dollars: colas +17.2%, diets +17.3%, and flavors +9.9%.
DATA. Quarterly, BD tracks multi-channel soda sales at retail from two data sets. This does not include the fountain channel (see Fact Book, 27th Edition for all-channel results, including fountain, for 2021). The data are combined to present a cumulative snapshot of the industry. The data cover supermarkets, c-stores, drug chains, mass merchandisers including Walmart, some dollar/club stores, and the military channel. The table within this story shows volume, dollar, and pricing metrics by company from the combined data set for the period covered. The Green Sheet that accompanies this newsletter shows corporate and top-10 brand shares for the combined data sets, plus breakouts for major channels.
© 2022 Beverage Digest.
Design, CMS, Hosting & Web Development :: ePublishing