Soda Struggles in Recent Sales, as Water, Energy and Sports Drinks Thrive

soda declineIncreasingly, consumers are turning away from carbonated beverages and sodas. According to a recent report from Cowen and Company that analyzed Nielsen xAOC sales data, sales of carbonated drinks marked a tenth straight year of declining sales in 2014.

The report explains that even though soft drink giants Coca-Cola and PepsiCo are struggling in sales, they are still posting increases in overall profits. The companies have done so by increasing prices to offset the accompanying decline in sales. This strategy resulted in a 2.5 percent increase in dollar sales for Coca-Cola amid a 3.2 percent decrease in volume. In particular, the decline in sales for Diet Coke was particularly steep with a 6.6 percent drop. During the same period, PepsiCo witnessed a 0.8 percent increase in dollar sales with declining volume.

Such a strategy is not feasible forever and declining sales are not likely to disappear anytime soon. According to a 2014 Bloomberg Business article, even Coca-Cola CEO Sandy Douglas limits himself to one sugary Coke per day. The article entitled "Coke Confronts Its Big Fat Problem," details how sales of the beverage are declining due to "the general explosion in health consciousness that has lately put Coke on the wrong side of just about every consumer lifestyle trend."

What are consumers turning to instead of soda? Beverages that they view as healthy such as bottled water, sports drinks, and energy drinks. These drinks have seen excellent sales and increased revenues:

  • Sales of energy drinks such as Monster and Red Bull increased an average of 11.2 percent.
  • Bottled water sales increased in volume by 6.3 percent with revenues up 7 percent.
  • Sports drinks increased volume sales by 6.5 percent.
  • Ready-to-drink teas increased overall dollar sales by 9.6 percent.

These positive numbers are particularly impressive when compared to the steady long-term decline in soda sales overall.

What does this mean for vending machine owners? You may want to assess your inventory choices based on the recent sales data. Do you stock enough healthy choices in your drink vending machines? Could a few changes here and there lead to increased sales and revenues? To make the most of the trend toward health consciousness in America offering plenty of choices that include options like energy drinks, bottled water and sports drinks alongside a few soda choices might be the best blend of products to maximize your revenues.

Sources:

https://www.bloomberg.com/news/articles/2014-07-31/coca-cola-sales-decline-health-concerns-spur-relaunch

http://fortune.com/2015/03/26/soda-sales-drop-2014/

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