Description

“The top-heavy carbonated soft drink category has a unique advantage in this equally unique time: deeply rooted connections with not only their most engaged fans, but also with less frequent users. Decades of legacy brand building centered not only on refreshment and enjoyment, but also community and family, are likely paying off in spades as consumers crave comfort, normalcy and nostalgia. Going forward, consumers will be challenged with new economic uncertainties and hurdles, encouraging a continuation of in-home consumption behavior and even indulgence, resulting in kind in sustained growth for the category. The way forward for all types of brands is to inspire consumers to rediscover ways to enjoy CSDs all over again, with new recipes, times and occasions, especially riding the tailwinds of other dayparts getting a boost, like mealtime and cocktail hour.”

– Kaitlin Kamp, Food and Drink Analyst
This Report looks at the following areas: 
  • The impact of COVID-19 on carbonated soft drinks

  • COVID-19-triggered shifts in fundamental food and drink shopping will impact CSD brands

  • Positioning for indulgence and functionality to maintain light users

  • Targeting new occasions to build on momentum

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
        • Executive Summary

            • Market Overview
              • Figure 1: Total US sales and forecast of carbonated soft drinks, at current prices, 2014-2024
            • Top takeaways
              • Figure 2: Short-, medium- and long-term impact of COVID-19 on carbonated soft drinks, April 2020
            • The issues
              • CSD drinkers are cutting back, reaching for H2O
                • Figure 3: frequency of carbonated soft drink replacements, February 2020
              • Light consumers aren’t the minority
                • Figure 4: Net carbonated soft drinks consumption frequency, February 2020
              • Few territories remain for soda to conquer
                • Figure 5: carbonated soft drink occasion, February 2020
              • The opportunities
                • Encourage drinkers to celebrate the small things
                  • Figure 6: carbonated soft drink attitudes, February 2020
                • Functional, hybrid drinks can suit both light and heavy users
                  • Figure 7: Crosstab ideal mixer for a hybrid csd by net csd consumption frequency, February 2020
                • Soda as a mixer
                  • Figure 8: carbonated soft drink occasion, February 2020
              • The Impact of COVID-19 on Carbonated Soft Drinks

                • What you need to know
                  • Figure 8: Short, medium and long term impact of COVID-19 on carbonated soft drinks, may 2020
                • Opportunities and Threats
                  • Channel challenges, channel changes
                    • Legacy brands lean on values to inspire
                      • Creative cocktails and mocktails keep the boredom at bay
                        • The reality of the “Covid-15” will take effect quickly
                          • Impact on the Carbonated Soft Drinks market
                            • 2020 will see a sales boost, followed by normalcy
                              • Figure 10: Total US sales and forecast of carbonated soft drinks, at current prices, 2014-2024
                            • How the crisis will affect carbonated soft drinks key consumer segments
                              • The heaviest CSD users will likely be among most financially impacted
                                • Figure 11: carbonated soft drinks consumption frequency, by age and gender, February 2020
                              • Light users are at risk of category abandonment
                                • Figure 4: Net carbonated soft drinks consumption frequency, February 2020
                              • How a COVID-19 recession will reshape the Carbonated Soft Drink industry
                                • Economic uncertainty lends itself to accessible indulgences, but the unhealthy rep lingers
                                  • Figure 10: Consumer spending on food at home, annual, 2000-19 and Q1 2020
                                • COVID-19: US context
                                • The Market – What You Need to Know

                                  • Positive growth ahead for CSDs
                                    • Diet soda continues to sell
                                      • Beverage giants invest in energy
                                        • The plastic problem
                                        • Market Size and Forecast

                                            • Small but steady growth ahead for CSD sales
                                              • Figure 14: Total US sales and forecast of carbonated soft drinks, at current prices, 2014-2024
                                          • Market Breakdown

                                            • Diet CSDs driving sales growth
                                              • Figure 15: Total US retail sales and forecast of carbonated soft drinks, by segment, at current prices, 2014-24
                                          • Market Perspective

                                            • Category giants hyped on energy opportunities
                                              • Figure 16: Coca Cola Energy commercial
                                              • Figure 17: CSDs with coffee flavors and energy
                                            • Functional beverages hold a captive audience
                                              • Figure 18: Interest and experience with functional ingredients in food/drink, october 2019
                                            • Power to the people
                                              • Figure 19: Coca Cola Insiders Club
                                          • Market Factors

                                            • Channel shutdowns and slowdowns will trigger supply shifts
                                              • US unemployment reaches record highs
                                                • Figure 20: Monthly Unemployment Rate, May 2020
                                              • COVID-19 causes carbon dioxide shortages
                                                • Obesity rates get bigger and bigger
                                                  • Figure 21: Percent of people aged 20 or older who are overweight or obese, 2001-02 to 2015-16
                                                • The pressure is on brands to lead on sustainability
                                                  • Figure 22: Who should be responsible for eco-friendly choices, March 2019
                                              • Key Players – What You Need to Know

                                                • Category giants Coca-Cola and PepsiCo hold steady
                                                  • Zero sugar steals sales
                                                    • Fruit flavors go beyond orange soda
                                                      • Mountain Dew struggles with sales
                                                        • Green tea as a natural caffeine
                                                        • Company and Brand Sales of Carbonated Soft Drinks

                                                          • CSD giants see sales gains
                                                            • Figure 23: Multi-outlet sales of carbonated soft drinks, by leading companies, rolling 52 weeks 2019 and 2020
                                                          • Zero sugar CSDs lead the diet brigade
                                                            • Figure 24: Multi-outlet sales of diet carbonated soft drinks, by leading companies and brands, rolling 52 weeks 2019 and 2020
                                                        • What’s Working

                                                          • Consumers running in both directions away from high fructose corn syrup
                                                            • Zero is better than diet
                                                              • Figure 25: Mulo sales of zero sugar carbonated soft drinks, rolling 52 weeks 2019
                                                            • Consumers sweet on real sugar
                                                              • Figure 26: Mulo sales of carbonated soft drinks made with real sugar, rolling 52 weeks 2019
                                                            • Mini sodas make big sales
                                                              • Figure 27: Mulo sales of mini carbonated soft drinks, rolling 52 weeks 2019
                                                            • Fruit flavors
                                                              • Figure 28: Mulo sales of fruit flavored carbonated soft drinks, rolling 52 weeks 2019
                                                              • Figure 29: number of carbonated soft drink flavor introductions, % change 2018-2019
                                                          • What’s Struggling

                                                            • Mountain Dew sales could use a pick-me-up
                                                              • Caffeine-free CSDs are a snooze
                                                                • Figure 30: Mulo sales of caffeine-free carbonated soft drinks, rolling 52 weeks 2019
                                                            • What to Watch

                                                              • Soda with a functional twist
                                                                • Figure 31: Functional CSDs
                                                              • CBD in CSDs? TBD.
                                                                • Figure 32: Mulo sales of cbd carbonated soft drinks, rolling 52 weeks 2019
                                                                • Figure 33: Experience and interest in cbd flavor in non-alcoholic beverages, march 2020
                                                              • Green tea for energy
                                                                • Figure 34: Green tea carbonated soft drinks
                                                                • Figure 35: Experience and interest in green tea flavors in non-alcoholic beverages, march 2020
                                                            • The Consumer – What You Need to Know

                                                              • More than three quarters of Americans drink soda
                                                                • But consumers are making swaps for their health
                                                                  • Real sugar > artificial sweeteners
                                                                    • Aluminum cans a likeable, sustainable solution
                                                                      • Tapping into mocktails and cocktails
                                                                      • CSDs Consumed

                                                                        • Soda still a staple of the American diet
                                                                          • Figure 36: types of carbonated soft drinks consumed, February 2020
                                                                        • Age, gender and parental status all at play in CSD consumption
                                                                          • Figure 37: Repertoire of carbonated soft drinks consumption, by age, gender and parental status, February 2020
                                                                        • CSD preferences are cultural
                                                                          • Figure 38: Repertoire of carbonated soft drinks consumed, by race and Hispanic origin, February 2020
                                                                        • CSD drink demographic profiles
                                                                            • Figure 39: CSD drinker demographic profile, indexed against all consumers, February 2020
                                                                        • Consumption Frequency

                                                                          • Diet cola grants frequency permission
                                                                            • Figure 40: carbonated soft drink consumption frequency, February 2020
                                                                            • Figure 41: Net carbonated soft drink consumption frequency, February 2020
                                                                          • Young men, parents make up the heaviest users
                                                                            • Figure 42: carbonated soft drink consumption frequency, by age and gender, February 2020
                                                                            • Figure 43: carbonated soft drink consumption frequency, by parental status, February 2020
                                                                        • Change in Consumption

                                                                          • Attrition is outpacing growth
                                                                            • Figure 44: change in carbonated soft drink consumption, February 2020
                                                                          • Young consumers are in flux
                                                                            • Figure 45: change in carbonated soft drink consumption, by generation, February 2020
                                                                          • Keep dads engaged
                                                                            • Figure 46: change in carbonated soft drink consumption, by parental status by gender, February 2020
                                                                          • Innovations can keep the adventurous engaged
                                                                            • Figure 47: change in carbonated soft drink consumption, by food and drink segmentation, February 2020
                                                                        • CSD Replacement

                                                                          • Consumers are swapping soda for water
                                                                            • Figure 48: carbonated soft drink replacements, February 2020
                                                                          • Younger consumers more likely to adopt other beverages
                                                                            • Figure 49: carbonated soft drink replacements, by age, February 2020
                                                                        • CSD Drink Attitudes

                                                                          • Real sugar a solution in more ways than one
                                                                            • Figure 50: carbonated soft drink attitudes, February 2020
                                                                            • Figure 51: CSD attitudes, by net CSD consumption frequency, February 2020
                                                                          • Light users working hard to avoid soda
                                                                            • Celebrate a little self-love
                                                                              • Figure 52: CSD attitudes, by net csd consumption frequency, February 2020
                                                                              • Figure 53: Coca-Cola video, Grannies | I’m In
                                                                              • Figure 54: Coca-Cola video, New Year, Same Super Cute You
                                                                            • Decaf varieties unlikely to win over consumers
                                                                              • Figure 55: CSD attitudes, by net CSD consumption frequency, February 2020
                                                                          • Preferred CSD Packaging

                                                                            • Most consumers can agree on aluminum
                                                                              • Figure 56: Carbonated soft drink packaging, February 2020
                                                                              • Figure 57: Carbonated soft drink packaging, net any, February 2020
                                                                            • Sustainability not top of mind for the heaviest users
                                                                              • Figure 58: CSD packaging by net CSD consumption frequency, net any, February 2020
                                                                          • CSD Occasions

                                                                            • CSDs already dominate most occasions
                                                                              • Figure 59: carbonated soft drink occasion, February 2020
                                                                            • Breaking into mocktail and cocktail occasions
                                                                              • Figure 60: carbonated soft drink occasion, February 2020
                                                                              • Figure 61: Fever-Tree Ginger Collection
                                                                          • Ideal Hybrid CSD

                                                                            • Interest in hybrid CSDs exists, but education will be needed
                                                                              • Figure 62: ideal hybrid carbonated soft drink, February 2020
                                                                              • Figure 63: examples of functional csds
                                                                            • Hybrid beverages an entry to cocktail and mocktail occasions
                                                                              • Figure 64: Trader Joe’s sodas
                                                                            • Heavy users interested in energy, light users in BFY beverages
                                                                              • Figure 65: Ideal hybrid csd, by net csd consumption frequency, February 2020
                                                                          • Appendix – Data Sources and Abbreviations

                                                                            • Data sources
                                                                              • Sales data
                                                                                • Consumer survey data
                                                                                  • Food and drink consumer segmentation
                                                                                      • Figure 66: Food/drink consumer segmentation, September 2017
                                                                                    • Abbreviations and terms
                                                                                      • Abbreviations
                                                                                        • Terms
                                                                                        • Appendix – The Market

                                                                                            • Figure 67: Total US retail sales and forecast of carbonated soft drinks, at inflation-adjusted prices, 2014-24
                                                                                            • Figure 68: Total US retail sales and forecast of carbonated soft drinks, by segment, at current prices, 2014-24
                                                                                            • Figure 69: Total US retail sales of carbonated soft drinks, by segment, at current prices, 2017 and 2019
                                                                                            • Figure 70: Total US retail sales and forecast of regular carbonated soft drinks, at current prices, 2014-24
                                                                                            • Figure 71: Total US retail sales and forecast of regular carbonated soft drinks, at inflation-adjusted prices, 2014-24
                                                                                            • Figure 72: Total US retail sales and forecast of diet carbonated soft drinks, at current prices, 2014-24
                                                                                            • Figure 73: Total US retail sales and forecast of diet carbonated soft drinks, at inflation-adjusted prices, 2014-24
                                                                                        • Appendix – Retail Channels

                                                                                            • Figure 74: Total US retail sales of carbonated soft drinks, by channel, at current prices, 2014-19
                                                                                            • Figure 75: Total US retail sales of carbonated soft drinks, by channel, at current prices, 2017 and 2019
                                                                                            • Figure 76: US supermarket sales of carbonated soft drinks, at current prices, 2014-19
                                                                                            • Figure 77: US convenience store sales of carbonated soft drinks, at current prices, 2014-19
                                                                                            • Figure 78: US sales of carbonated soft drinks through other retail channels, at current prices, 2014-19
                                                                                        • Appendix – Key Players

                                                                                            • Figure 79: Multi-outlet sales of regular carbonated soft drinks, by leading companies and brands, rolling 52 weeks 2019 and 2020

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