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U.S. Soft-drink Volume Decline Steepest in Decades

Source: Reuters
31/03/2009

Chicago, March 31 - U.S. carbonated soft-drink volume fell 3 percent in 2008, the biggest drop since at least the early 1980s, according to industry publication Beverage Digest, as Americans cut back on small treats during the recession.

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Volume fell to about 9.6 billion cases, the lowest level since 1997. Last year's decline follows a 2.3 percent dip in 2007. Volume fell less than 1 percent in 2006 and 2005 after rising for several years.

Energy drinks and some diet beverages sold well in 2008, while most brands, including regular Coke and Pepsi, saw volume fall.

U.S. carbonated soft-drink volume declined for the three largest manufacturers -- Coca-Cola Co , PepsiCo and Dr Pepper Snapple , according to the Beverage Digest report.

Volume fell 3.1 percent at Coca-Cola, 4 percent at PepsiCo and 1.3 percent at Dr Pepper Snapple. Including beverages such as bottled water and sports drinks, volume fell 1.6 percent at Coca-Cola, 5 percent at PepsiCo and 2.3 percent at Dr Pepper Snapple. Those figures do not include juice or juice drinks.

Smaller companies that make lower-priced sodas and popular energy drinks saw their volume rise. National Beverage Corp , Hansen Natural , Red Bull and Big Red were the only four companies in Beverage Digest's top 10 to post higher volume in 2008.

Coke, the No. 1 soft drink, saw its volume decline 2.5 percent, while rival Pepsi-Cola's plunged 6.5 percent. Volume fell 3 percent for Diet Coke and 7.5 percent for Diet Pepsi.

Despite the lower volume, the retail dollar value of the U.S. carbonated soft-drink business rose about 1 percent to $72.7 billion on price increases and sustained demand for higher-cost energy drinks.

Brands that posted gains included PepsiCo's Diet Mt. Dew, whose volume grew 4 percent, and Diet Dr Pepper, up 2.3 percent. Smaller brands posted more rapid growth, with Coke Zero jumping 36 percent and Pepsi Max up 25 percent.

Beverage Digest estimated per capita consumption fell to about 760 eight-ounce servings, down from about 790 in 2007. While consumption has fallen over the past few years, it is still higher in the United States than anywhere else in the world, the publication said.

In afternoon trading, shares of Coca-Cola were down 3.3 percent, PepsiCo had fallen 1.9 percent, and Dr Pepper Snapple had declined 2.5 percent.



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