The soft drink industry sees first dollar sales decline in a year

By Frazer Jones
The carbonated soft drinks (CSD) industry has been in a precarious state for some time now. While lawmakers and courts are siding with soda manufacturer...

The carbonated soft drinks (CSD) industry has been in a precarious state for some time now. While lawmakers and courts are siding with soda manufacturers on an ideological level, consumer bases are evolving and are increasingly looking for something new and different from their soft drinks—something more natural and less caloric than the original model. This has been leading to lower sales, even when consumers have all the freedom in the world to buy as many large soft drinks as they want.

RELATED CONTENT: Soda scores another win as NYC Appeals Court strikes down soda ban

According to new Nielsen scan data, dollar sales for soft drinks through June dropped for the first time in a year:

"Total CSD dollar sales in all channels were down -0.2% (and up +1.4% for prior 12 weeks) during the four-week period ending June 13, 2015, driven by solid average equivalent price growth of +4.2% but offset by equivalent unit volume declines of -4.2%," according to a Wells Fargo Securities research report citing Nielsen data.

RELATED CONTENT: How are Pepsi, Coca-Cola, and Dr. Pepper changing the way U.S. consumers drink soda?

This study of dollar sales is different from unit sales, which have been in a steadier decline. The data also indicates that PepsiCo is bearing the brunt of this trend with a 2.5 percent sales decline, the result of double-digit volume decline in “nearly half” of PepsiCo’s CSD products. The report notes an influx of pricier “premium” products from PepsiCo launched this year, like Mountain Dew Kickstart—it’s possible that consumers just weren’t interested in these new offerings, especially at a higher price point.

RELATED CONTENT: Diet Pepsi is giving aspartame the boot

While Coca-Cola and Dr. Pepper Snapple Group reportedly fared better, the overall trend has been toward decline. The lesson to take away from this is one that PepsiCo already knows well: the time for soft drink companies to diversify is now. While PepsiCo’s soft drink sales have been in decline, the company’s snack production through Frito-Lay has been on the rise, leading to growth overall (especially in growing markets) and helping the company overcome challenges in tougher segments. Whether diversification is into more health-conscious products or non-CSD brands, branching out has never been more important.



Let's connect!   

Check out the latest edition of Food Drink & Franchise!


Featured Articles

Diageo Trials new Baileys Paper-Based Bottle

Diageo trials a dry moulded fibre bottle made of 90% paper by partnering with PA Consulting, as part of the Bottle Collective with PA and PulPac.

Unilever CEO Schumacher Lays out Plastics Roadmap

Unilever CEO Hein Schumacher sets out a roadmap to a Global Plastics Treaty, in wake of controversy that saw company criticised for watering down ESG goals

Ahold Delhaize Targets Sustainability & Omnichannel Goals

Multinational food business Ahold Delhaize prioritises sustainability and omnichannel innovation as part of its new plan for financial and strategic goals

US Bird flu Turns Spotlight on Milk Pasteurisation


Nestlé 'Meeting Sustainability Targets on Nescafé Coffee'


Coffee Prices Soar as Extreme Weather Hits Brazil & Vietnam