Carbonated Beverages 2010-08-16

The sluggish economy helped give a boost to carbonated soft drinks last year, but it appears that consumers are once again switching to other beverages.

The category witnessed several years of sales declines through calendar year 2008. But there was a change for the better in 2009, when sales in food, drug and mass channels grew 2.5% to $13.8 billion. Many attributed this to the economic recession and resulting category switching from more expensive drinks, like energy drinks and ready-to-drink tea, to CSDs. Indeed, retailers told SN that competitive pricing kept CSDs top of mind last year. Promotions like 10 for $10 on 2 liters were a big consumer draw, retailers noted.

More recently, however, sales dropped 1.3% to $13.6 billion in food, drug and mass for the 52 weeks ending June 13. The situation may not get much better in the near future at a time when the category is under political scrutiny. New York Gov. David A. Paterson proposed a penny-per-ounce tax on sugary sodas in the 2010-2011 budget, although the effort failed. And First Lady Michelle Obama's 70-point plan to reduce childhood obesity calls for an analysis of the impact of local sales taxes on consumption of less healthy foods.