The Hard Truth About ...

Posted by M ws On Wednesday, April 17, 2013 0 comments

Here are ten hard truths that the soda industry won't say...

1. “The hottest new beverage is water.”

People aren’t losing their thirst, but they are going back to basics. Water is one of the fastest-growing segments of the beverage industry, studies suggest, while sales for traditional fizzy drinks are on the decline. From 2009 to 2011, sales of regular soft drinks declined by 1.9% to $27 billion, according to a 2012 report from market research group Mintel. “It would seem that the category has seen its peak and is now retreating,” the study reported. (Consumers are choosing more low- and no-calorie beverages, says a spokesman for the American Beverage Association.)

The decline is part of a shift in consumer tastes. From 2001 to 2011, annual bottled-water consumption soared 56% to 26 gallons per person — the equivalent of 166 of those typical 20-ounce bottles — according to the Beverage Information Group and the U.S. Census. At the same time, annual soda consumption fell 16%, to 44 gallons (about 281 single-serving bottles) per person. Indeed, many soda makers now also own bottled-water brands. Coca-Cola KO +5.69%   owns Dasani, PepsiCo PEP +1.37%   owns Aquafina, and Dr Pepper Snapple DPS +1.69%   owns Deja Blue.

While fizzy-drink sales may have lost their fizz, soda isn’t going away any time soon. A decade ago, 80% of Americans consumed at least one such beverage every two weeks, says Harry Balzer, chief industry analyst for market research firm NPD Group. Today, 72% continue to do so. “Soda is still a very popular part of the American diet,” he says. “More Americans drink soda than drink energy drinks and coffee.”

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