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2014 State of the Industry: Carbonated soft drinks

Author: Date:8/7/2014 7:58:27 PM
 

2014 State of the Industry: Carbonated soft drinks

The current economic climate coupled with governmental and consumer concerns about health and wellness created a tough environment for the carbonated soft drinks (CSDs) market this year, according to analysts.  Each of the Top 3 CSD companies reported relatively flat sales in 2013, with The Coca-Cola Co. reporting 1 percent worldwide sparkling volume growth for the full year, and PepsiCo Americas Beverages (PAB) and Dr Pepper Snapple Group (DPS) marking 5 percent and 2 percent CSD volume declines, respectively, in North American markets. Despite these performance levels, CSD players remain resilient and focused on regaining share.

To quench consumers’ thirsts for lower-calorie, naturally sweetened beverages that offer full taste, CSD brands are investing in sweetener research.  Atlanta-based The Coca-Cola Co. piloted its first stevia-sweetened cola, Coca-Cola Life, in Argentina and Chile last summer. The beverage contains approximately half the calories of Coca-Cola and is naturally sweetened with a blend of stevia leaf extract and sugar.

In Argentina, Coca-Cola Life garnered 84 percent consumer awareness and gained 76 percent incremental volume, Chief Executive Officer Muhtar Kent reported in his 2014 Consumer Analyst Group of New York (CAGNY) presentation on Feb. 21. The company plans to expand Coca-Cola Life’s distribution into other markets this year, he said.

PepsiCo Inc. Chief Executive Officer Indra Nooyi noted during the Purchase, N.Y.-based company’s fourth-quarter 2013 earnings call that it is testing “several great-tasting cola product variations” featuring natural, zero-calorie sweeteners blended with sugar in various countries around the world. “And so far, these test results are promising,” she said. PepsiCo plans to launch these tested sweeteners in non-cola beverages in the United States this year but wants to build and test consumer acceptance before officially launching a low-calorie, naturally sweetened cola, she said.

The company also recently extended its partnership with San Diego-based Senomyx Inc. to August 2016 to collaborate on sweet-taste technology. Under the new agreement, PepsiCo will continue to have exclusive worldwide rights to the Senomyx sweet flavor ingredients developed under the collaboration for use in non-alcohol beverage categories.

Plano, Texas-based DPS has been offering lower-calorie CSDs with full-calorie taste since 2011 when it launched its Dr Pepper Ten beverage nationwide. The 10-calorie CSD offers the full flavor experience of Dr Pepper in a healthier format without a diet image, the company says. Following the popularity of Dr Pepper Ten, the company expanded the line in early 2013 to include its next Top 5 brands: 7Up Ten, A&W Ten, Sunkist Ten, Canada Dry Ten and RC Ten.  

During its fourth-quarter 2013 earnings call, DPS President and Chief Executive Officer Larry Young reported that, according to a Nielsen Homescan study, 52 percent of Ten’s purchases are incremental to the CSD category. “[This proves] that we’re bringing back lapsed consumer occasions,” he said during the call. Young also reported that the company will test naturally sweetened, 60-calorie versions of some of its brands this year.

Outside of the “Big 3” CSD companies, Zevia, a Culver City, Calif.-based zero-calorie CSD brand that is known for using the natural sweeteners  stevia and erythritol, recently reformulated its products with a new sweetener system. The beverages’ SweetSmart system combines stevia with monk fruit and erythritol. In addition, the purity of the Reb A steviol glycoside, which provides 82 percent of the beverages’ sweetness, was increased from 97 percent to 99 percent, the company says. The new sweetening system complements the flavor profile of stevia, enhances the sodas’ overall sweetness, and reduces bitter notes, it adds.

White Rock Beverages, Whitestone, N.Y., test-launched Psych?, a zero-calorie, stevia-sweetened CSD, in New York and international markets last year.

“We thought the idea of a natural, zero-calorie-based soft drink was exciting,” President Larry Bodkin told Beverage Industry in its December 2013 issue. “We had to do a lot of research and figure out … [how] to do it in a way that would taste good. We spent a lot of time and effort on the taste with natural masking agents. We had to make sure that we could produce a product that we had confidence in [and] that the quality would be there.”  

 Related carbonated soft drink filling machine:
http://www.sunstarmachine.com/html_products/Carboanted-Drink-Filling-Machine-Monoblock-DCGF16-12-6-399.html

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