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Soft Drink Sales Fall, but Dr Pepper Gains Share

CNBC.com
Wednesday, 24 Mar 2010 | 1:30 PM ET

Are you a Pepper?

Sales of carbonated soft drinks in the U.S. fell for the fifth year in a row last year, although the pace of decline has slowed from 2008, according to a report from industry trade magazine Beverage Digest.

Soda
Jose Luis Pelaez | Getty Images
Soda

The two leading soft drink manufacturers Coca-Cola and PepsiCo saw their carbonated soft drink sales decline as the industry's volume slipped to where it was in 1996, eliminating years of growth.

However, Dr Pepper Snapple saw its market share climb to 16.4 percent from 15.3 percent a year ago, helped by the increasing popularity of Dr Diet Pepper, which posted a 4.8 percent increase in volume.

Diet Dr Pepper was one of only two leading brands to gain market share. The other was Diet Mt. Dew, which saw volume increase 4.5 percent.

Trademark Coca-Cola remained in the top spot, with a 17.0 percent share of the soft drink market, while Pepsi-Cola and Diet Coke fell into a tie in second place, each with a 9.9 percent market share.

According to Beverage Digest, the total volume of carbonated soft drinks sold slipped 2.1 percent to a total of 9.4 billion cases. That is somewhat better than the 3 percent decline logged in 2008.

The last time the carbonated soft drink category grew was in 2004. In the 1990s, beverage companies saw volume grow at about 3 percent a year. But consumers have shifted away from from sugary, fizzy drinks in favor of drinks with a healthier image like water, teas and other noncarbonated beverages.

Coca-Cola, remained the leading seller of carbonated soft drinks with a a 41.9 percent share of the total market, according to Beverage Digest. Last year, Coke had a 42.7 percent share of the market.

Pepsi's market share slipped to 29.9 percent from 30.8 percent a year ago.

Cott, maker of private label soft drinks, also gained market share last year. No doubt Cott's sales were helped by cost-conscious consumers who switched to less expensive sodas to cut down on their grocery bills.

Meanwhile, a separate research firm, Beverage Marketing Corp., reported total U.S. refreshment beverage market contracted 3.1 percent last year. That was an acceleration of 2008's 2.1 percent decline, which was the first down year on record.

In addition, to a decline in carbonated soft drinks, other categories such as sports drinks and enhanced waters posted steep declines. In fact, ready-to-drink teas and energy drinks were among the few categories to record growth.

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