Carbonated Soft Drinks Under Pressure

carbonatedIsotonics and sparking water are up, while carbonated soft drinks struggle.

Carbonated soft drinks (CSD) excluding energy, saw dollar sales decline 4.8% (-3% for 12 weeks) in the latest XAOC Nielsen period during the four weeks ended April 12, 2014 (versus -4.1% prior year) driven by an equivalent unit pricing increase of 1% and equivalent unit volume declines of 5.7%, according to Nielsen data as reported by Wells Fargo LLC.

 “We note that Easter was not included this period versus the year-ago period, which likely dragged volumes down further,” noted Bonnie Herzog, managing director of Beverage, Tobacco & Convenience Store Research, Wells Fargo Securities LLC.

During the same period, downward pressure continued on diet CSDs with dollar sales down 9.5%. Meanwhile, liquid teas had modest dollar sales growth of 1%, while isotonics were up a solid 7.1%. Bottled water dollar sales were up 1.6%, while sparkling water continues to be one of the fastest-growing categories, up 24.5%, Wells Fargo reported.

Energy dollar sales were up a solid 8.9%, led by Monster’s (MNST) strong 17.2% growth (including Muscle Monster), offset by Red Bull’s modest growth of only 2.7%.

Herzog noted that the bottom line, is “functional beverages, like energy, remain one of the few sources of growth in nonalcoholic beverages while CSDs continue to remain under pressure.”