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Carbonated Soft Drinks - US - June 2016

"Total retail sales of CSDs (carbonated soft drinks) remained flat from 2015 to 2016 estimate – the result of a shift in consumer preferences for BFY (better-for-you) beverages; backlash from artificial ingredients and sweeteners, and high sugar content; and increasing competition from other drink innovations entering the market."
- Elizabeth Sisel, Beverage Analyst

This report discusses the following key topics:

  • Diet carbonated soft drinks struggle, overall category sales flat
  • High cross-consumption with sparkling waters
  • Slight declines in volume consumption, steeper consumer exit rate

Overall category sales at current prices are expected to remain positive but have started to plateau. Mintel forecasts this line of trajectory to continue through 2021 as companies and brands balance volume sales loss with price increases and new packaging formats and innovation continues to meet current consumer trends surrounding health and premiumization.

For the purposes of this Report, Mintel has used the following definition: Carbonated soft drinks are non-alcoholic beverages that have added carbonation. This includes beverages with a range of flavors, sweeteners, and colors. Colas, non-colas, craft, natural, and stevia-sweetened CSDs are combined in the regular and diet segments.

This Report divides the market into two segments:

  • Regular carbonated soft drinks, including full-calorie and reduced/mid-calorie soft drinks
  • Diet or zero-calories soft drinks

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Diet carbonated soft drinks struggle, overall category sales flat
            • Figure 1: Total US retail sales and forecast of carbonated soft drinks, by segment, at current prices, 2011-21
          • High cross-consumption with sparkling waters
            • Figure 2: CSD consumption – Any consumption, by CSD consumption – Flavored sparkling water, April 2016
          • Slight declines in volume consumption, steeper consumer exit rate
            • Figure 3: Carbonated soft drink consumption, trended 2011-15
          • The opportunities
            • Majority drinks more than one type of CSD
              • Figure 4: Repertoire of CSD consumption, April 2016
            • Rise of natural carbonated soft drinks
              • Figure 5: CSD consumption – Stevia-sweetened/natural/craft, March 2015 and April 2016
            • 73% of consumers want added functional/health benefits
              • Figure 6: Ideal CSD creation – Functions/benefits, April 2016
            • Ideal carbonated beverage is refreshing
              • Figure 7: Ideal CSD classification, April 2016
            • What it means
            • The Market – What You Need to Know

              • Category sales plateau
                • Regular carbonated soft drinks keep category afloat
                  • Majority of CSD drinkers consume flavored sparkling waters
                    • Health a key driver in CSD category evolution
                    • Market Size and Forecast

                      • Category sales growth forecast to remain flat
                        • Figure 8: Total US sales and fan chart forecast of carbonated soft drinks, at current prices, 2011-21
                        • Figure 9: Total US sales and forecast of carbonated soft drinks, at current prices, 2011-21
                        • Figure 10: Total US sales and forecast of carbonated soft drinks, at inflation-adjusted prices, 2011-21
                    • Market Breakdown

                      • Regular carbonated soft drinks keep category afloat
                        • Figure 11: Total US retail sales and forecast of carbonated soft drinks, by segment, at current prices, 2011-21
                      • Regular CSD segment growth remains flat through 2021
                        • Figure 12: Total US retail sales and forecast of carbonated soft drinks, by segment, at percent change of current prices, 2011-21
                      • “Other” retail channel posts only positive growth from 2014-16
                        • Figure 13: Total US retail sales of carbonated soft drinks, by channel, at current prices, 2014 and 2016
                      • Carbonated soft drink natural channel sales grow 3.6% from 2015-16
                        • Figure 14: Natural supermarket sales of carbonated soft drinks, at current prices, rolling 52-weeks March 2014-16
                      • Sugar-sweetened sodas dominate sales at natural channels
                        • Figure 15: Natural supermarket sales of carbonated soft drinks, by type of sweetener, at current prices, March 2016
                    • Market Perspective

                      • Majority of CSD drinkers consume flavored sparkling waters
                        • Figure 16: CSD consumption – Any consumption, by CSD consumption – Flavored sparkling water, April 2016
                      • Bottled water disrupts growth of natural sodas
                        • Figure 17: Beverage Tracker – Natural soda/diet drinks/drinks with natural sweeteners, at-home consumption, June 2014-April 2016
                    • Market Factors

                      • Health concerns remain top-of-mind with consumers
                        • Figure 18: Important to achieve good health – Any top three rank, May 2015
                      • Millennial population has positive growth
                        • Figure 19: Population by generation, percentage change, 2011-21
                      • Hispanic population growing
                        • Figure 20: Population by Hispanic origin, percent change, 2011-21
                      • Declining household income challenges some soft drink segments
                        • Figure 21: Median household income, in inflation-adjusted dollars, 2004-14
                      • Overlap between Millennials, acculturated Hispanics, and parents
                        • Millennials as parents
                          • Figure 22: Households with own children, by age of householder, 2013
                        • Hispanics as parents
                          • Figure 23: Households with own children, by Hispanic origin of householder, 2013
                        • Hispanics as Millennials
                          • Figure 24: Generations, by Hispanic origin, 2016
                      • Key Players – What You Need to Know

                        • Leading companies’ MULO sales flat, losses cancel out growth
                          • Regular soft drinks post positive growth at MULO channels
                            • Diet struggles at MULO channels, battle continues against sugary drinks
                              • Premiumization, functionality, hard sodas grab consumer interest
                              • Manufacturer Sales of Carbonated Soft Drinks

                                • Leading companies’ MULO sales flat, launch new/extended campaigns
                                    • Figure 25: MULO sales of carbonated soft drinks, by leading companies, rolling 52-weeks 2015 and 2016
                                  • Manufacturer sales of carbonated soft drinks
                                    • Figure 26: MULO sales of carbonated soft drinks, by leading companies, rolling 52-weeks 2015 and 2016
                                • What’s Working?

                                  • Regular soft drinks post positive growth at MULO channels
                                    • Figure 27: MULO sales of regular soft drinks, by leading companies and brands, rolling 52-weeks 2015 and 2016
                                  • Ginger ales continue to perform well
                                    • Leading companies’ cherry-flavored offerings see growth
                                      • Throwbacks, limited editions generate renewed product interest
                                        • Natural soft drinks trend
                                          • Craft continues to gain exposure
                                          • What’s Struggling?

                                            • Soda bans complicate positive category messaging
                                              • Diet struggles to recover at MULO channels
                                                • Figure 28: MULO sales of diet soft drinks, by leading companies and brands, rolling 52-weeks 2015 and 2016
                                            • What’s Next?

                                              • Premium carbonated soft drinks not limited to craft
                                                • Not soda, but sparkling beverages
                                                  • Functionality under-tapped, but desired
                                                    • Hard soda launches explode
                                                    • The Consumer – What You Need to Know

                                                      • Volume consumption only slightly declines among drinkers
                                                        • Regular carbonated soft drinks dominate consumer preference
                                                          • Natural carbonated soft drinks generate interest
                                                            • Total craft soda consumption only slightly up
                                                              • Taste, refreshment, all-natural important to CSD selection
                                                                • Greater concern about sugar content than artificial ingredients
                                                                  • Afternoon, evening most popular dayparts for consumption
                                                                    • Consumers drink on-the-go rather than at work/school
                                                                      • Consumers prefer CSDs with meals
                                                                        • Cola preferred flavor in ideal carbonated beverage creation
                                                                          • Consumers want cane sugar
                                                                            • Vitamins and minerals, caffeine preferred soft drink functions
                                                                              • Bottles preferred carbonated beverage packaging
                                                                                • Most described their creation as a soda
                                                                                • Volume Consumption versus Consumer Base

                                                                                  • Volume consumption only slightly declines among drinkers
                                                                                    • Figure 29: Carbonated soft drink consumption, trended 2011-15
                                                                                    • Figure 30: Carbonated soft drink consumption – Average number of drinks in the last seven days, trended 2011-15
                                                                                • Classic Carbonated Soft Drink Consumer

                                                                                  • Regular carbonated soft drinks dominate consumer preference
                                                                                    • Figure 31: CSD consumption – Regular/diet/low – or mid-calorie, April 2016
                                                                                  • Older Millennials lead carbonated soft drink consumption
                                                                                      • Figure 32: CSD consumption – Regular/diet/low- or mid-calorie, by generation, April 2016
                                                                                      • Figure 33: Repertoire of CSD consumption, April 2016
                                                                                    • Hispanics lead consumption, possible opportunity with Asians
                                                                                        • Figure 34: CSD consumption – Regular/diet/low – or mid-calorie, by race and Hispanic origin, April 2016
                                                                                      • Low/mid-calorie, diet consumption increases with income level
                                                                                        • Figure 35: CSD consumption – Regular/diet/low – or mid-calorie, by household income, April 2016
                                                                                    • Natural Carbonated Soft Drink Consumer

                                                                                      • Natural carbonated soft drinks generate interest
                                                                                        • Figure 36: CSD consumption – Stevia-sweetened/natural, April 2016
                                                                                      • Older Millennials core natural CSD consumer
                                                                                          • Figure 37: CSD consumption – Stevia-sweetened/natural, by generation, April 2016
                                                                                        • Hispanics stand out with their natural soft drink consumption
                                                                                            • Figure 38: CSD consumption – Stevia-sweetened/natural, by race and Hispanic origin, April 2016
                                                                                          • Natural soft drink consumption rises with income level
                                                                                            • Figure 39: CSD consumption – Stevia-sweetened/natural, by household income, April 2016
                                                                                        • Craft Carbonated Soft Drink Consumer

                                                                                          • Total craft soda consumption only slightly up
                                                                                            • Figure 40: CSD consumption – Craft, April 2016
                                                                                          • Older Millennials heaviest craft soda consumers
                                                                                            • Figure 41: CSD consumption – Craft, by generation, April 2016
                                                                                        • Impact of Taste, Refreshment, Health

                                                                                          • Taste, refreshment attributes important CSD drivers
                                                                                            • Consumers take note of all-natural ingredient
                                                                                              • Figure 42: Attitudes toward CSDs, April 2016
                                                                                            • Millennials drink for reasons beyond taste
                                                                                              • Figure 43: Attitudes toward CSDs, by generation, April 2016
                                                                                          • Replacement, Concerns

                                                                                            • Greater concern about sugar content than artificial ingredients
                                                                                              • Figure 44: Attitudes toward CSDs, April 2016
                                                                                            • Younger Millennials, iGeneration, Boomers concerned about sugar
                                                                                              • Figure 45: Attitudes toward CSDs, by generation, April 2016
                                                                                            • Some concern with brands going natural
                                                                                            • Daypart

                                                                                              • Afternoon, evening most popular dayparts for consumption
                                                                                                • Figure 46: Drinking occasions – Daypart, April 2016
                                                                                                • Figure 47: April 2016 ideal CSD creation – Function, by drinking occasions – Daypart, April 2016
                                                                                            • Activity

                                                                                              • Consumers drink on-the-go rather than at work/school
                                                                                                • Figure 48: Drinking occasions – Activity, April 2016
                                                                                              • Opportunity to connect with mothers through on-the-go use
                                                                                                • Figure 49: Drinking occasions – Activity, April 2016
                                                                                            • Usage with Meals, as Mixers

                                                                                              • Core consumers under index for consumption with meals
                                                                                                • Figure 50: Drinking occasions – Usage, April 2016
                                                                                              • Carbonated soft drinks as alcoholic mixers
                                                                                              • Ideal Flavor

                                                                                                • Cola preferred flavor in ideal carbonated beverage creation
                                                                                                  • Figure 51: Ideal CSD creation – Flavor, April 2016
                                                                                                • Millennials drive interest in unique flavors
                                                                                                  • Figure 52: Ideal CSD creation – Flavor, by generations, April 2016
                                                                                                • Blacks stand out for ginger ale, fruit flavors
                                                                                                  • Figure 53: Ideal CSD creation – Flavor, by race and Hispanic origin, April 2016
                                                                                              • Ideal Sugar/sweetener

                                                                                                • Consumers want cane sugar
                                                                                                  • Figure 54: Ideal CSD creation – Sugar/sweetener, April 2016
                                                                                                • Generations stand out for specific sugar types
                                                                                                  • Figure 55: Ideal CSD creation – Sugar/sweetener, by generation, April 2016
                                                                                              • Ideal Functions/benefits

                                                                                                • Vitamins and minerals, caffeine preferred functions
                                                                                                  • Figure 56: Ideal CSD creation – Function, April 2016
                                                                                                • Millennials, iGeneration want functionality
                                                                                                  • Figure 57: Ideal CSD creation – Function, by generation, April 2016
                                                                                                • Ideal drink contains vitamins, miners, caffeine, and zero calories
                                                                                                  • Figure 58: TURF analysis – Ideal CSD creation – Other add-ins, April 2016
                                                                                              • Ideal Packaging

                                                                                                • Bottles preferred carbonated beverage packaging
                                                                                                  • Figure 59: Ideal CSD creation – Packaging, April 2016
                                                                                                • Women want resealable packaging
                                                                                                  • Figure 60: Ideal CSD creation – Packaging, by gender, April 2016
                                                                                                • iGeneration disinterested in classic aluminium can, wants reusable
                                                                                                  • Figure 61: Ideal CSD creation – Packaging, April 2016
                                                                                              • Ideal Carbonated Soft Drink Creation

                                                                                                • Most described their creation as a soda
                                                                                                  • Figure 62: Ideal CSD classification – Drink type, April 2016
                                                                                                • Older Millennials make a natural soda
                                                                                                  • Figure 63: Ideal CSD classification – Drink type, by generation, April 2016
                                                                                                • Consumers want refreshing
                                                                                                  • Figure 64: Ideal CSD classification – Drink qualities, April 2016
                                                                                              • Appendix – Data Sources and Abbreviations

                                                                                                • Data sources
                                                                                                  • Sales data
                                                                                                    • Fan chart forecast
                                                                                                      • Consumer survey data
                                                                                                        • TURF methodology
                                                                                                          • Abbreviations and terms
                                                                                                            • Abbreviations
                                                                                                              • Terms
                                                                                                              • Appendix – Market

                                                                                                                  • Figure 65: Total US retail sales and forecast of regular carbonated soft drinks, at current prices, 2011-21
                                                                                                                  • Figure 66: Total US retail sales and forecast of regular carbonated soft drinks, at inflation-adjusted prices, 2011-21
                                                                                                                  • Figure 67: Total US retail sales and forecast of diet carbonated soft drinks, at current prices, 2011-21
                                                                                                                  • Figure 68: Total US retail sales and forecast of diet carbonated soft drinks, at inflation-adjusted prices, 2011-21
                                                                                                                  • Figure 69: US supermarket sales of carbonated soft drinks, at current prices, 2011-16
                                                                                                                  • Figure 70: US convenience store sales of carbonated soft drinks, at current prices, 2011-16
                                                                                                                  • Figure 71: US sales of carbonated soft drinks through other retail channels, at current prices, 2011-16
                                                                                                              • Appendix – Key Players

                                                                                                                  • Figure 72: MULO sales of regular soft drinks, by leading companies and brands, rolling 52-weeks 2015 and 2016
                                                                                                                  • Figure 73: MULO sales of diet soft drinks, by leading companies and brands, rolling 52-weeks 2015 and 2016
                                                                                                              • Appendix – Consumer

                                                                                                                  • Figure 74: Carbonated soft drink consumption – Average number of drinks in the last seven days, December 2015

                                                                                                              Companies Covered

                                                                                                              • Walmart Stores (USA)

                                                                                                              Carbonated Soft Drinks - US - June 2016

                                                                                                              £3,199.84 (Excl.Tax)