Soda Makers Adjust To New Norms
January 21, 2013 by UPI - United Press International, Inc.
NEW YORK (UPI) — U.S. soda makers Coca-Cola Co. and PepsiCo say business is fine, but industry analysts said they were worried a slide in soda sales may be permanent.
As baby boomers age, their beverage preferences are aging along with them. But youth are turning increasingly to other beverages, The Wall Street Journal reported.
Soda sales fell 0.6 percent in 2012 to $28.7 billion said research firm SymphonyIRI Group. By volume, sales fell 1.8 percent.
Figures also show that the sales decline accelerated as the year progressed.
“The question from here is if that is the new norm,” said Sanford C. Bernstein beverage industry analyst Steve Powers.
Company officials said sales figures only counted store sales. Furthermore, not only were sales of soda holding up overseas, but shareholders can pretty much assume that if a strong rival or even a charging ahead curiosity enters the market, Coke, Pespi or Dr. Pepper Snapple has the cash on hand to buy it outright.
All three companies have expanded their portfolios in recent years.
PepsiCo, for example, owns Naked juice brand and sales for that brand rose about 25 percent in 2012.
“I think we can all be optimistic about the business we’re in,” said Coke’s global chief customer officer Sandy Douglas in December.
Soda makers are all facing an image battle, trying to overcome the concept that soda contributes to diabetes and obesity.
Last year, Diet Coke surpassed Pepsi to become the No. 2 best selling soda behind Coke.
But PepsiCo Chief Executive Officer Indra Nooyi said Pepsi was making “enormous progress,” with artificial sweeteners.
Pepsi was 90 percent close to a breakthrough on sweeteners. “Unfortunately, the last 10 percent is the toughest part,” she said.