Non-alcoholic Beverages: The Market - US
Report description
However, the functional beverage market has been facing a number of issues since 2007: influence of the weak economy, weakening consumer confidence in the effectiveness of claims, and the not-so- holistic profile of functional drinks. The biggest issue that beverage makers face is the increasing scrutiny from the Food and Drug Administration (FDA) on beverages that make specific claims about health benefits FDA guidelines can be viewed as a supplement or drug for the purposes of regulationand under the .
Table of contents
SCOPE AND THEMESWhat you need to know
Definition
Data sources
Sales data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Market shows signs of coming out the recession
Carbonated drinks, dairy/dairy-alternative drinks, and juice/juice drinks sales stagnate
Bottled water makes anemic recovery, sports drinks thrive, energy drinks buck the recession
Coffee faces inflation due to supply issues; RTD tea contributes to tea growth
Beverage manufacturers employ multipronged marketing platform
INSIGHTS AND OPPORTUNITIES
Functional claims become hard to include; market potentially faces sales decline
Plant-based bottles a competitive advantage
Stevia: mixed success, offers growth potential
Figure 1: U.S. population aged 18+, 2006-16
INSPIRE INSIGHTS
Inspire Trend: “Supernanny State”
MARKET SIZE AND FORECAST
Key points
Market shows signs of coming out of recession; inflation poses next challenge
Top three segments show signs of maturity: tea, sports, and energy drinks bring growth
Private labels continue to wield influence
Sales and forecast of non-alcoholic beverages
Figure 2: FDMx sales and forecast of non-alcoholic beverages, at current prices, 2005-15
Figure 3: FDMx sales and forecast of non-alcoholic beverages, at inflation-adjusted prices, 2005-15
Fan chart forecast
Figure 4: Fan chart forecast of FDMx sales of non-alcoholic beverages, at current prices, 2005-15
Walmart sales
MARKET DRIVERS—HEALTH AND WELLNESS TRENDS
Obesity rates steady, but still a cause for concern
Figure 5: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2008
Obesity affects over a third of all children and teens aged 6-19
Figure 6: Prevalence of obesity among children and adolescents aged 2-19, 1976-2008
Diabetes—the ugly expression of obesity; threatens beverage growth
Figure 7: prevalence of diagnosed and undiagnosed diabetes among adults aged 20+, 2005-08
Over half of all adults watch their diets; A majority of those seek low-fat/low- sugar food
Figure 8: Trends in watching diet among adults aged 18+, 2005-10
Figure 9: Trends in watching diet among adults aged 18+, 2005-10
Let’s Move program likely to influence choices within non-alcoholic beverages
High-fructose corn syrup continues to bother consumers
MARKET DRIVERS—DEMOGRAPHIC AND ECONOMIC FACTORS
Households with children are key driver in the market
Figure 10: Households by presence of children, 2000-10
Kids’ population growth lower during 2011-16 compared to 2006-11
Figure 11: Personal consumption of different types of beverages among kids, April 2009-June 2010
Figure 12: Population of kids aged 6-11, 2006-16
Teen population offers little growth for 2006-11, better outlook during 2011-16
Figure 13: Personal consumption of different types of beverages among teens, April 2009-June 2010
Figure 14: Teen population by age, 2006-16
Black and Hispanics are growth-driving population groups
Figure 15: Population, by race and Hispanic origin, 2006-16
Figure 16: U.S. population buying power, by race and Hispanic origin, 1990-2014
High unemployment rate keeps consumer spending conservative
Figure 17: Employment status of the civilian non-institutional population aged 16+, 2000-11 (month to date)
Key non-alcoholic beverage consumers continue to struggle with unemployment woes
Figure 18: Unemployment status (seasonally adjusted) among civilian non-institutional population, by age,
gender and race/Hispanic origin, March 2010-March 2011
Figure 19: Consumer Price Index, all items, January 2008-February 2011
Figure 20: Percent change in CPI in food and energy sectors, August 2010-February 2011
COMPETITIVE CONTEXT
Increasing trend toward hybrid beverages poses confusion, increases competition
Juice + tea concept debuts
Figure 21 : V8 V-Fusion, tea leaf lands on bottle, TV ad, 2011
Flavored water includes fruit and tea flavors
Figure 22: U.S. New product launches in flavored bottled water, by flavor, 2010
Energy drinks continue to include fruit juice and coffee products
SEGMENT PERFORMANCE
Key points
Figure 23: FDMx sales and forecast of non-alcoholic beverages, at current prices, by segment, part 1, 2005-15
Figure 24: FDMx sales and forecast of non-alcoholic beverages, at current prices, by segment, part 2, 2005-15
Figure 25: FDMx sales of non-alcoholic beverages, by segment, 2008 and 2010
SEGMENT PERFORMANCE—CARBONATED DRINKS
Key points
Regular soda exhibits bigger decline than diet soda in 2010
Figure 26: FDMx volume sales for regular soda, low-calorie soda, and seltzer/tonic water/club soda, 2005-10
Key consumers continue to move away; need to rekindle links with teens, young adults
Natural and sugar-sweetened soda gains, but still remains small
Diet soda offers growth opportunity only if the taste is right
FDMx sales and forecast of carbonated drinks
Figure 27: FDMx sales and forecast of carbonated drinks, 2005-15
SEGMENT PERFORMANCE—DAIRY AND DAIRY-ALTERNATIVE BEVERAGES
Key points
Price and supply volatility affect milk sales, may continue in 2011
Figure 28: Trends in dollar and volume sales and price of milk in FDMx, 2005-10
Soy, kefir, and nut milk show impressive gains
Yogurt drinks turn in dismal performance, need innovation
FDMx sales and forecast of dairy and dairy-alternative beverages
Figure 29: FDMx sales and forecast of dairy and dairy-alternative beverages, 2005-15
SEGMENT PERFORMANCE—JUICE AND JUICE DRINKS
Key points
A mature segment turns in lackluster performance
Price increases and consumer aversion for orange flavor impacts 100% juice
Juice drinks do not resonate with pro-health trend
Coconut water shows sign of becoming mainstream
FDMx sales and forecast of juice and juice drinks`
Figure 30: FDMx sales and forecast of juice and juice drinks, 2005-15
SEGMENT PERFORMANCE—BOTTLED WATER
Key points
Bottled water makes anemic recovery, bedeviled by price promotions
Figure 31: Volume sales and price of PET bottled water in FDMx, 2005-10
Enhanced water sales strong in 2010, low-calorie products will find favor
Premium brands rebound, albeit slowly
Major players make efforts to deal with the environmental issue
FDMx sales and forecast of bottled water
Figure 32: FDMx sales and forecast of bottled water, 2005-15
SEGMENT PERFORMANCE—COFFEE AND RTD COFFEE
Key points
Coffee growth remains stable in 2010, but mostly due to inflation
Figure 33: FDMx volume sales and price trends for coffee (excluding RTD coffee), 2005-10
Coffee commodity prices likely to follow the upward trend
Growth from premium coffee may get derailed due to price hikes
Single-cup coffee infuses growth
RTD coffee recovers in 2010, needs to grow consumer base
FDMx sales and forecast of coffee and RTD coffee
Figure 34: FDMx sales and forecast of coffee and RTD coffee, 2005-15
SEGMENT PERFORMANCE—TEA AND RTD TEA
Key points
Tea rebounds after the recession, future outlook positive
Canned and bottled tea aids growth, premium and value-priced brands proliferate
Figure 35: FDMx sales and forecast of tea and RTD tea, 2005-10
Tea prices likely to fluctuate as major growing regions report mixed expectations
Dairy producers increase foothold in tea through refrigerated tea
FDMx sales and forecast of tea and RTD tea
Figure 36: FDMx sales and forecast of tea and RTD tea, 2005-15
SEGMENT PERFORMANCE—SPORTS DRINKS
Key points
Sports drinks make impressive comeback on the strength of innovation
Coconut water: competition or growth driver?
Children and teens show declining interest; teens important for growth
FDMx sales and forecast of sports drinks
Figure 37: FDMx sales and forecast of sports drinks, 2005-15
SEGMENT PERFORMANCE—ENERGY DRINKS AND SHOTS
Key points
Segment bucks recession but continues to face criticism
Energy shots bring in key growth but remain small part of the overall segment
Figure 38: FDMx sales of energy drinks and shots, 2005-10
FDMx sales and forecast of energy drinks
Figure 39: FDMx sales and forecast of energy drinks, 2005-15
SEGMENT PERFORMANCE—DRINK MIXES (OTHER)
Key points
Drink mixes largely remain flat; innovation needed from brands with high awareness
Figure 40: FDMx sales of drinks mixes, by segment, 2005-10
Other drink mixes turn in lackluster performance
FDMx sales and forecast of drinks mixes (other)
Figure 41: FDMx sales and forecast of other drinks mixes, 2005-15
RETAIL CHANNELS
Overview
Supermarkets continue to rule as a beverage purchase destination
Figure 42: FDMx sales of non-alcoholic beverages, by channel, 2008 and 2010
COMPANIES AND BRANDS
Key points
Acquisition and alliance activity heats up
Coca-Cola and PepsiCo continue to lead, both lose market share during 2009-10
Dr Pepper Snapple Group maintains market share
Nestlé disappoints due to softness in juice sales, Kraft remains stable
Dean Foods gains on the strength of price increases in milk segment
Figure 43: FDMx sales of leading non-alcoholic beverage companies, 2009 and 2010
BRAND SHARE—CARBONATED DRINKS
Key points
Most regular soda brands decline, natural brands show small growth
Figure 44: FDMx brand sales of regular soda and seltzer/tonic water/club soda, part 1, 2009 and 2010
Figure 45: FDMx brand sales of regular soda and seltzer/tonic water/club soda, part 1, 2009 and 2010
Coke Zero and Pepsi Max exhibit growth, compete on product attributes and marketing push
Diet Pepsi shows bigger loss than Diet Coke
Figure 46: FDMx brand sales of diet soda, 2009 and 2010
BRAND SHARE—DAIRY AND DAIRY-ALTERNATIVE DRINKS
Key points
Private labels share remains stable, branded milk loses market share
Figure 47: FDMx brand sales of dairy and dairy-alternative drinks, part 1, 2009 and 2010
Figure 48: FDMx brand sales of dairy and dairy-alternative drinks, part 2, 2009 and 2010
BRAND SHARE—JUICE AND JUICE DRINKS
Key points
Coca-Cola outpaces PepsiCo on the strength of its Simply brand
Kraft’s kids-targeted brands bring in growth
Figure 49: FDMx brand sales of juice and juice drinks, part 1, 2009 and 2010
Figure 50: FDMx brand sales of juice and juice drinks, part 2, 2009 and 2010
BRAND SHARE—BOTTLED WATER
Key points
Nestlé’s bottled water portfolio outperforms rivals
Coca-Cola’s Dasani and Glacéau Vitaminwater turn in weak performances
Figure 51: FDMx brand sales of bottled water, part 1, 2009 and 2010
PepsiCo’s SoBe Lifewater turns in stellar performance
Figure 52: FDMx brand sales of bottled water, part 2, 2009 and 2010
BRAND SHARE—COFFEE AND RTD COFFEE
Key points
Folgers declines and Maxwell House flat; both face competition from gourmet brands
Coffeehouse brands perform well, price hike may dampen future growth
Figure 53: FDMx brand sales of coffee and RTD coffee, part 1, 2009 and 2010
Frappuccino finds growth, DoubleShot flat
Green Mountain Coffee Roasters charges ahead by building a single-cup coffee empire
Figure 54: FDMx brand sales of coffee and RTD coffee, part 2, 2009 and 2010
BRAND SHARE—TEA AND RTD TEA
Key points
Lipton/PepsiCo partnership maintains leadership but loses market share
AriZona continues to chart its growth path
Figure 55: FDMx brand sales of tea and RTD tea, part 1, 2009 and 2010
Coca-Cola’s premium brands, Gold Peak and Honest Tea, thrive
Figure 56: FDMx brand sales of tea and RTD tea, part 2, 2009 and 2010
BRAND SHARE—SPORTS DRINKS
Key points
Gatorade finds its footing, brand’s repositioning brings growth
Coca-Cola’s Powerade makes a push with Zero and Ion4 extensions
Figure 57: FDMx brand sales of sports drinks, 2009 and 2010
BRAND SHARE—ENERGY DRINKS
Key points
Red Bull increases market share, Monster and Rockstar cede
Living Essential’s 5-Hour Energy continues its growth onslaught
Figure 58: 5-Hour Energy , TV ad, 2010
Figure 59: FDMx brand sales of energy drinks, part 1, 2009 and 2010
Coca-Cola and PepsiCo continue the downward slide
Figure 60: FDMx brand sales of energy drinks, part 2, 2009 and 2010
BRAND QUALITIES
Gatorade goes through a makeover, reconnects with target consumer
Nestlé Pure Life finds success by marketing wellness at a value price to families and Hispanics
GMCR accumulates single-cup coffee brands through acquisition and allinaces
INNOVATIONS AND INNOVATORS
Pace of innovation improves in most segments in 2010
Figure 61: Number of new product launches, by non-alcoholic beverage segment, 2005-10
Carbonated soft drinks
Figure 62: Top claims in new carbonated drinks products, 2006-10
All-natural claims and the use of real sugar continue to grow in new products
Fruit-flavored Italian soda gains traction; exotic flavors appear in lesser-known brands
Dairy and dairy-alternative beverages
Figure 63: Top claims in new dairy and dairy-alternative beverages, 2006-10
Functional claims make dairy and dairy-alternatives more competitive to other segments
Nut, seed, soy, and grain milk target vegans; Silk debuts coconut milk
Juice and juice drinks
Figure 64: Top claims in new juice and juice drink products, 2006-10
Superfruits still popular, but move away from pomegranate to fancier Amazon berries
Coffee and RTD coffee
Figure 65: Top claims in new coffee and RTD coffee products, 2006-10
Coffee makers underscore convenient packaging
Fair-trade certified coffee continues to grow
Functional and healthy coffee products promise a boost in metabolic rate, and more
Bottled water
Figure 66: Top claims in plain and flavored bottled water products, 2006-10
Enhanced water incorporates exotic flavors, makes flamboyant functional claims
Tea and RTD tea
Figure 67: Top ten claims in new packaged and RTD tea products, 2006-10
Chocolate flavor becomes popular in new tea products
Sports drinks
Figure 68: Top claims in sports drink products, 2006-10
Coconut water-based sports drinks make appearance
Gatorade and Powerade innovations focus on sports performance
Energy drinks
Figure 69: Top claims in energy drinks products, 2006-10
New products tout healthy and natural energy boosts
Drink mixes
Figure 70: Top claims in new beverage mix products, 2006-10
Innovation ranges from protein water mixes to pure fitness to soda tablets
MARKETING STRATEGIES
Overview
Competitive advertising
PepsiCo’s competitive edge: Pepsi Max and Sierra Mist Natural ads take a dig at Coca-Cola
Figure 71: Pepsi Max—competition with Coke Zero, TV ad, 2010
Figure 72: Sierra Mist Natural—trees plan to trip hiker , TV ad, 2010
Social media use proliferates beyond having a dialogue with consumers
Kraft distributes free MiO samples on Facebook prior to store launch
Gatorade’s new twist on social media: Mission Control
Engage in community improvement
Coca-Cola funds community parks to make people more active
PepsiCo continues with its Pepsi Refresh project
Diet soda brands heavily target men
Coke Zero continues with its masculine-tone advertising
Figure 73: Coke Zero—man enters a time machine , TV ad, 2010
Dr Pepper 10 targets only men, excludes women from product advertising
Selling health
Welch’s picks health platform as the launch pad for its Healthy Start extension
Figure 74 : Welch’s Healthy Start , TV ad, 2010
APPENDIX—TRADE ASSOCIATIONS
APPENDIX: RESEARCH METHODOLOGY
CONSUMER RESEARCH
Primary Data Analysis
Sampling
Global Market Insite (GMI)
Secondary Data Analysis
Experian Simmons National Consumer Studies
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy
Related research categories
By sector: General alcohol, General drinks
By market: United States (in North America)
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