10 Years of a Faltering Market As the overall liquid refreshment beverage (LRB) market increased 0.9% in volume, or 3.0 billion gallons since 2007, carbonated soft drinks (CSD) declined 1.8% during the 10-year period (2007–2017), or a loss of 2.38 billion gallons.   Total gallons in the CSD market has decreased from 13.3 billion during 2012 to 12.3 billion during 2017, or a negative 1.5% compounded annual growth rate (CAGR) during the period, including -1.2% from 2016 to 2017. According to Beverage Marketing Corporation (BMC), although CSD’s total 2017 volume declined to 12.3 billion gallons, retail sales increased 1.2%; however, the decline in volume resulted in CSDs’ market share decreasing to less than 37% of all LRBs.

CSDs Regain Some Fizzle During 2018 According to a Wells Fargo Securities beverage report and Nielsen data, CSD sales dollars increased 1.5% during the four weeks ending June 16. CSD sales at convenience stores for the four weeks ending September 8 were flat, although the Labor Day weekend occurred within that period. The flat performance was better than CSD volumes at c-stores, which decreased 3.0%. The Wells Fargo Securities/Nielsen-based data for the four weeks ending November 3 reported total CSD unit sales decreased 1.7%; however, the average unit price increased 2.6%.

CSD Consumers, by Major Demographic Categories According to The Media Audit’s 2018 Rolling Aggregate Report, with data from 60 US markets and more than 122 million US adults, adults 35–44 had the highest percentage, or 19.5%, of adults who consumed soft drinks 5+ times during the past 7 days. Adults 25–34 were a close second, at 18.4%, and, somewhat surprising, adults 55–64 were third, at 16.5%. The results were similar for consumption of soft drinks 10+ times: adults 35–44, 20.4%; adults 25–34, 18.7%; and adults 55–64, 16.9%. When measured by income, those in the $35K–$50K and $50K–$75K had the largest percentages: 5+ times, 16.0% and 19.9%, respectively; and 10+ times, 16.3% and 19.9%, respectively.

A Deeper Dive into the Consumption Data Based on the same Media Audit report as above, white-collar workers had the largest percentages of adults 18–49 and 50+ who consumed soft drinks 5+ times during the past 7 days, or 36.1% and 27.8%, respectively. Not surprisingly, adults 18–49 who consumed soft drinks 5+ times had the largest percentage of those who had eaten 3+ times at a fast food restaurant during the past 7 days, or 50.7%, but the percentage for adults 50+ was a significant 35.8%. Among adults 18–49 who consumed soft drinks 5+ times, 80.1% and 77.0% had logged on YouTube and Facebook, respectively, during the past month. For adults 50+, Facebook was first, at 70.5%, and YouTube second, at 61.9%.

Consumers, Especially Young Adults, Sour on CSDs’ Sweet Taste As industry experts have indicated previously, the beverage companies marketing CSDs must do a better job of innovating their products to include “more- healthful options, varied flavors and added benefits.” Health concerns of the high-sugar content in regular CSDs and artificial sweeteners in diet CSDs have resulted in approximately 20% of consumers limiting the amounts of CSDs they consume and are turning to an increasing number of non-CSD beverages. These innovations will be required to position the various CSD brands favorably with Millennials and Generation Z, not only because these are and will be the consumers of CSDs for decades, but also because they are the most ethnically diverse generations.

Advertising Strategies With a significant percentage of adults 55–64 consuming CSDs and as the largest percentage of TV viewers, beverage retailers could use a nostalgia theme in their advertising to position CSDs as part of these adults’ childhood they can relive every day. To increase CSD purchases among consumers who tend to purchase healthier options, offer a discount on a single-portion CSD or packs when consumers purchase bottled water, 100% fruit juices, protein drinks, etc. Suggest a “Better Mid-Afternoon Slump Boost” promotion to reach the large percentage of white-collar workers who drink CSDs. Promote a refreshing CSD as a cold-beverage alternative to another cup of coffee and offer a free energy bar with each purchase.

New Media Strategies Retailers can post current videos from nutritionists about the optimum healthy intake of CSDs or ask a local nutritionist to create a series of short videos on the topic, especially as it might relate specifically to the local community. CSDs are often a mixer for alcoholic drinks, such as rum and Coke. Ask customers of beverage retailers and social media visitors to share their favorite use of CSDs as a mixer. Invite everyone to vote for their favorite, most unusual, with a prize to the winner. Use the station’s social media pages to host a contest among local grocery and beverage retailers for best in- store seasonal CSDs display. They post photos and/or videos and the station promotes participation from the public on its pages. Award an appropriate prize.