Abstract
This report provides insight for manufacturers, marketers, and distributors into the dynamic non-alcoholic beverage market in the U.S. The non-alcoholic beverage market is in the midst of a significant shift in consumer purchasing and consumption patterns. Mintel' s analysis of the market identifies current issues shaping the market, insights for future challenges, and opportunities for growth. The report addresses a range of topics including:
- How consumer lifestyle trends have driven sales and marketing of non-carbonated beverages
- Which demographic groups have helped to drive growth and innovation of new age beverages and how future population changes may affect these beverages
- Why raw materials' pricing disproportionately affects some segments resulting in higher overall sales but lower consumption
- How manufacturers and marketers are dealing with growing negative perceptions of beverages formerly considered to be healthy
- Why hybrids are driving growth and why all hybrids may not resonate with consumers
- Do school vending rules really influence beverage choices
- How the market polarization between value and premium has influenced the mid-priced brands
- Which racial/ethnic groups will influence beverages and how
- How men are proving to be a new demographic for diet soft drinks
- How distribution agreements and acquisitions are helping CSD giants and small players alike
Through use of primary and secondary research including quantification of total market size and analysis of brands at the FDM level, Mintel provides insight into current market and product trends and actionable insights regarding future marketing and product innovation.
Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Data sources
- Sales data
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Market at a glance
- Diverse market with internal competition
- Segment performance
- Health concerns drive consumer preferences
- Demographic influences have mixed implications for the future growth
- Acquisitions and distribution agreements benefit large and small companies
- Crowded energy drink images begin to blend
- Innovation blends the best qualities of two existing products
- Increase in digital media targets younger adults
- Cultivating a healthy image for soda, juice, and enhanced waters
- Market Size and Forecast
- Key points
- Beverages with functional and pro-health positioning will drive future growth
- Continued price volatility in fruit juice and milk would inhibit the total market growth
- Hispanics and blacks to drive growth
- Figure 1: Total U.S. sales and forecast of non-alcoholic beverages, at current prices, 2002-12
- Figure 2: Total U.S. sales and forecast of non-alcoholic beverages, at inflation-adjusted prices, 2002-12
- Competitive Context
- Key points
- Continued competition from within will stall future market growth
- Alliances and acquisitions set stage for growth
- The market would continue to face pricing pressures in fruit juice and milk, impairing the future growth
- Segment Performance
- Key points
- Consumers move away from soda to healthier and functional non-carbonated
beverages
- Figure 3: U.S. sales and forecast of non-alcoholic beverages, at current prices, by segment, 2002-12
- Top three segment experiences declining demand; bottled water, RTD tea,
sports drinks, and energy drinks to grow in future
- Figure 4: U.S. sales of non-alcoholic beverages, by segment, 2005 and 2007
- Figure 5: U.S. volume sales of non-alcoholic beverages at FDMx*, by segment, 2005 and 2007
- Segment Performance--Milk
- Key points
- Future milk sales likely to be flat, price volatility to continue due to price increase in gasoline and corn
- Growth opportunities through functional, organic and hormone-free milk
- Single-serve milk presents growth opportunities beyond traditional
channels
- Figure 6: U.S. sales and forecast of milk, 2002-12
- Segment Performance--Carbonated Drinks
- Key points
- Mature segment; growth opportunities among niche consumer groups
- Diet soda unable to attract consumers due to the fear of health risks and
aftertaste; attracting men to diet soda could spur growth
- Figure 7: U.S. sales and forecast of carbonated drinks, 2002-12
- Segment Performance--Juice and Juice Drinks
- Key points
- Juice not considered a healthy beverage; connect recent research with 100% juices to create pro-health positioning
- Create value-added perception
- Continued pricing pressure would challenge the future growth
- Figure 8: U.S. sales and forecast of juice and juice drinks, 2002-12
- Segment Performance--Bottled Water
- Key points
- Enhanced water grows sales
- Bottled water backlash; communicate brand' s pro-environment strategy
- Figure 9: U.S. sales and forecast of bottled water, 2002-12
- Segment Performance--Sports and Energy Drinks
- Key points
- Energy drinks enjoy growth through their infancy status
- Declining consumer interest in sports drinks; fierce competition with
enhanced water may challenge future growth
- Figure 10: U.S. sales and forecast of sports and energy drinks, 2002-12
- Segment Performance--Coffee and RTD Coffee
- Key points
- Coffee renaissance grows sales
- RTD coffee would continue to grow
- Increased competition threatens sales
- Figure 11: U.S. sales and forecast of coffee, 2002-12
- Segment Performance--Tea and RTD Tea
- Key points
- Tea' s health benefits team up with convenience
- Hybrid teas offer even more benefits/options
- Figure 12: U.S. sales and forecast of tea, 2002-12
- Retail Channels
- Key points
- Supermarkets lose market share to mass and other channel
- Proliferation of energy drinks at convenience stores has built traffic in
this channel
- Figure 13: U.S. sales of non-alcoholic beverages, by retail channel, 2005 and 2007
- Retail Channels--Supermarkets
- Key points
- Increasing single-serve packaging in the total product mix can help drive growth in this channel
- Supermarkets grow on multipacks and premium juices
- Figure 14: U.S. sales of non-alcoholic beverages at supermarkets, 2002-07
- Retail Channels--Mass and Other Channels
- Key points
- Wal-Mart PL targets branded CSDs
- C-store develops own energy drink
- Figure 15: U.S. sales of non-alcoholic beverages at mass and other channels*, 2002-07
- Market Drivers
- Health concerns drive consumer preferences
- Figure 16: Percentage of population who are overweight or obese, 20-74 years of age, 1988-2004
- Figure 17: Reasons for drinking less regular soda today than a year ago, February 2007
- Figure 18: U.S. per capita consumption of carbonated soft drinks, bottled water, and sports drinks, 2001-06
- Schools contribute to children' s available beverage choices
- Figure 19: Prevalence of obesity among children aged 6-19, by age, 1971-2002
- Figure 20: Incidence of soda and RTD NCB consumption among children aged 6-11, 2002-06
- Government and media drive consumers toward NCBs
- Teens and young adults migrate to energy drinks
- Figure 21: Incidence of drinking energy drinks--adults, 2002-06
- Figure 22: Incidence of drinking energy drinks--adults and teens, January-October 2006
- Figure 23: Incidence of drinking RTD NCBs in the past seven days, by age, January-October 2006
- Figure 24: U.S. population of teens and young adults aged 12-24, by age, 2003-13
- Blacks and Hispanics drive growth of energy, sports, and juice drinks
- Figure 25: Population, by race and Hispanic origin, 2003-13
- Leading Companies
- Key points
- Major carbonated drinks companies would find growth in expanding non-carbonated beverage portfolio
- Price-sensitive consumers would continue to drive growth in private labels
- Figure 26: FDMx sales of leading non-alcoholic beverage companies, 2006 and 2007
- Brand Share--Carbonated Drinks
- Key points
- Non-cola flavors and Hispanic tastes
- Coke Zero sales climb, but not all "zeros" succeed
- Diet colas growing among men
- Manufacturer and brand shares
- Figure 27: FDMx brand sales of regular carbonated drinks in the U.S., 2006 and 2007
- Figure 28: FDM brand sales of diet/reduced calorie carbonated drinks in the U.S., 2006 and 2007
- Brand Share--Milk
- Key points
- Private label as a tool for supermarket chains
- Milk brands that offer extra fare best
- Manufacturer and brand shares
- Figure 29: FDMx brand sales of milk in the U.S., 2006 and 2007
- Brand Share--Juice and Juice Drinks
- Key points
- All natural, no-sugar-added favored positioning
- Refrigerated blends of fruit juice expand orange juice
- Functional juices grow
- Getting fruits and vegetables in one juice; a future growth-driving innovation
- Private label remains significant challenge
- Manufacturer and brand shares
- Figure 30: FDMx brand sales of juice and juice drinks in the U.S., 2006 and 2007
- Brand Share--Bottled Water
- Key points
- Vitaminwater changes market
- Nestlé still tops, stands on plain water
- Manufacturer and brand shares
- Figure 31: FDMx brand sales of convenience/PET bottled water in the U.S., 2006 and 2007
- Brand Share--Coffee
- Key points
- Traditional ground coffee suppliers still leaders
- Refrigerated RTD coffee grows
- Cappuccino/iced coffee continues growth and new entrants follow
- Manufacturer and brand shares
- Figure 32: FDMx brand sales of coffee in the U.S., 2006 and 2007
- Brand Share--Sports/Energy Drinks
- Key points
- Energy drinks taking over sports and energy drinks aisle
- Expanded distribution benefits suppliers of energy drinks
- Coca-Cola and Pepsi have little success as teens look for edgy drinks
- Gatorade looks to expand sports drinks off the court
- Manufacturer and brand shares
- Figure 33: FDMx brand sales of sports/energy drinks in the U.S., 2006 and 2007
- Brand Share--Tea
- Key points
- RTD tea builds on healthy beverage trend
- AriZona slips against new products from Lipton and Nestea
- Small suppliers with added-value products grow well
- Manufacturer and brand shares
- Figure 34: FDMx brand sales of tea in the U.S., 2006 and 2007
- Brand Qualities
- Energy drinks brands incorporate multi-dimensional differentiation platform to retain consumer interest
- Innovation and Innovators
- New product trends
- Figure 35: Trends in numbers of new product introductions in the non-alcoholic beverage market, 2003-08*
- Innovations by segment
- Carbonated beverages
- Juice and juice drinks
- Milk
- Coffee/RTD coffee
- Tea
- Bottled water
- Sports/energy drinks
- Other innovative trends
- Advertising and Promotion
- Overview
- Ad dollars flow to diet soft drinks and sports drinks
- Figure 36: Media spending and lead agencies for selected non-alcoholic beverages, 2005 and 2006
- Increase in digital media targets younger adults
- Sports drink becomes "lifestyle beverage"
- Carbonated soft drinks
- Figure 37: 7-Up television ad, 2007
- Figure 38: Diet 7-Up television ad, 2007
- Figure 39: Diet Coke Plus television ad, 2007
- Figure 40: Diet Coke Plus television ad #2, 2007
- Figure 41: Coca-Cola television ad, 2007
- Figure 42: Diet Coke television ad, 2007
- Figure 43: Diet Pepsi Max television ad, 2007
- Juice and juice drinks
- Figure 44: Florida orange juice television ad #1, 2007
- Figure 45: Florida orange juice television ad #2, 2007
- Figure 46: Juicy Juice television ad, 2007
- Figure 47: Nestlé Juicy Juice television ad, 2007
- Figure 48: Ocean Spray television ad, 2007
- Figure 49: Ocean Spray diet television ad, 2007
- Figure 50: Sunsweet television ad, 2007
- Figure 51: Sunny Delight television ad, 2007
- Figure 52: V8 V-Fusion television ad, 2007
- Bottled water
- Figure 53: Aquapod television ad, 2007
- Figure 54: Fruit2O television ad, 2007
- Figure 55: Propel television ad, 2007
- Energy drinks
- Figure 56: Joint Juice television ad, 2007
- Figure 57: Extreme Energy television ad, 2007
- Tea
- Figure 58: Snapple television ad, 2007
- Appendix: Acquisition and Alliances
- Acquisitions
- Alliances
- Appendix: Studies on Fruit Juice
- Studies linking negative influence of drinking fruit juice for children
- Studies linking fruit juice with positive health benefits
- Appendix: Innovation and Innovators
- Hybridization of drinks
- Superfruits beyond pomegranate in many drink types
- Functional claims expand
- Appendix: Trade Associations
