Lively Soft Drinks Emerge

March 8, 2017
CSD Staff
Although the news is not all positive for carbonated soft drinks, innovation in the category has the potential to create a reboot.
Demand for both regular and diet carbonated soft drinks has declined as more consumers turn to healthier beverages to quench their thirst, according to IBISWorld, a Los Angeles-based market research firm. It reported total channel soft drink revenue totaled $42.8 billion in 2016, a 0.9% decline since 2011.
Yet, convenience stores will remain a key market for carbonated soft drinks, with this channel’s share of market revenue increasing steadily over the past five years due to consumers’ growing need for convenience, according to IBISWorld.
More than 31% of c-store packaged-beverage sales came from CSDs in 2015, according to the Nielsen’s annual category report.
However, new products in the marketplace are expected to bring life to the segment. For example, both Coca-Cola Co. and PepsiCo have introduced new low-calorie lines to bolster lagging diet soda sales.
Even more intriguing are the new craft brands hitting the marketplace. Pepsi introduced its Stubborn craft line in August of last year, the third such line in three years. Already, 2017 is shaping up to be more eventful in terms of CSD product introductions.
The Canadian soft drink brand, Guru, is pushing the organic and energy trends with sparkling energy water that’s said to be free of sugar, calories and GMOs. These products make up for what is lacking by including heavy doses of natural caffeine.
SPURRING INNOVATION
Meanwhile, Daniel Levine, a trends expert and director at The Avant-Guide Institute, a New York City-based consultancy said strongly-carbonated soft drinks, a trend in Japan, may make their way across the Pacific. Lead by Pepsi, these bottled soft drinks contain about five times the normal carbonation and are packaged in reinforced plastic bottles.
London Spirits company, Diageo, is pushing Seedlip, marketed as the “world’s first distilled non alcoholic spirit.”
“The idea is zero-proof, non-alcoholic cocktails, some of which are carbonated, that could be bottled and sold in c-stores as well as bars,” said Levine.
Late last year, Les Claypool, the bassist for the San Francisco-based rock band Primus, launched SeaPop, a line of “soothing” soft drinks that are essentially the opposite of energy drinks.
“Created with herbs that are supposedly relaxation-inducing, c-store operators might have to make room for a new calming category of soft drinks,” predicted Levine.
Evolving trends in the category have also allowed some c-store chains to launch proprietary brands. For instance, 7-Eleven last November teamed with Jones Soda Co. to produce a limited-edition Orange & Cream Slurpee flavor soda to be sold exclusively in 7-Eleven locations. The Jones Orange & Cream Slurpee flavor is the first cane sugar product for the Slurpee brand.
At Git ‘N Go Markets, a four-store operation based in Tennessee, carbonated soft drinks category sales rose 2.5% in 2016. “However, the category was lagging in overall sales growth in the c-store about 9%,” said William Baine, Git ‘N Go CEO. “Core 20-ounce offerings were flat to down from 2015. Our numbers might be off compared to the region due to our deli/fountain remodel.”