Carbonated Drinks in the US are Struggling
Carbonated drinks within the US were struggling in 2016, with off-trade volume sales declining by 1%. One of the reasons for this is health concerns involving sugar and artificial sweeteners. With no reversal of this trend in sight, major companies like PepsiCo have found ways to revive their carbonated drinks sales. One of the ways to increase sales is by temporarily bringing back discontinued brands, such as Crystal Pepsi and Mountain Dew Pitch Black. Another way companies are trying to leave way for health conscious consumers is by providing a smaller pack size and trying to remove aspartame from low calorie sodas. Removing aspartame has been hit with pushback though as PepsiCo did when they tried to remove the chemical from Diet Pepsi but had to put it back in after negative consumer response.
Yet, some companies are doing well despite the declining of sales. Dr Pepper Snapple Group had the best year yet, with its off-trade value sales growing by 3%. The company benefited from seltzers and tonic waters being a healthier alternative to make cocktails. Another company that saw an increase in sales is PepsiCo. Smaller brands within the company, such as Mountain Dew Kickstart and Pepsi with Real Sugar, have increased sales by 1%. Mountain Dew Kickstart has found a niche of consumers who was a carbonated energy drink while Pepsi with Real Sugar appeals to consumers who view natural sugar as healthier than high fructose corn syrup.
Overall, the carbonates category is set to continue to decline over the forecast period as the anti-sugar sentiment that has dogged it for years is showing no sign of abating. The success of carbonated waters like La Croix and certain mixers show that while American consumers still appreciate carbonation, they would prefer it to come with as little sugar and as few artificial sweeteners as possible. Non-carbonated beverages like RTD tea, RTD coffee and plant waters will all continue to grow at the expense of carbonates.