US retail sales of diet soda remain in freefall, reveals latest Nielsen data

By Elaine Watson contact

- Last updated on GMT

US retail sales of diet soda remain in freefall, Nielsen data
Unit sales of diet soda are still falling at an alarming rate in the US retail market, with the latest Nielsen data (all channels including grocery, drug, mass, and c-stores) showing an 8.2% decline in the four weeks to October 31 vs the same period a year ago, a 7.4% decline in 12 weeks to Oct 31, and a 7.3% decline in the 52 weeks to Oct 31, according to Wells Fargo.

Dollar sales, meanwhile, were down 5.5% (4-weeks), 4.8% (12-weeks) and 4.1% (52-weeks) year-on-year.

Diet Pepsi is the biggest loser

The biggest loser has been Diet Pepsi, which experienced an 11.4% decline in unit sales and an 8.9% drop in dollar sales in the latest four-week period (vs a year ago), whereas Diet Coke unit sales were down 6.6% with a 4.4% drop in dollar sales.

Dr Pepper Snapple Group’s diet and low-cal portfolio saw the smallest declines of the big three over the same four-week period, with a 6.8% drop in unit sales and a 3.9% drop in dollar sales year-on-year.

Regular carbonated soft drinks (excluding energy drinks) fared marginally better, with unit sales down 1.5% year-on-year in the four week period and dollar sales up 1.9%.

Bottled water and ready-to-drink tea and coffee all surging ahead 

But it isn’t all doom and gloom in the beverage category, with unit sales of bottled water up 7.7% in the latest four weeks (dollar sales +8%); unit sales of ready to drink coffee up 12.5% (dollar sales +16.7%); and unit sales of ready-to-drink tea up 5.3% (dollar sales +8.7%).

Red Bull driving growth in energy category

Energy drinks also performed well, with unit sales up 6.6% and dollar sales up 9.6% (YoY) in the same four-week period, driven by a particularly strong performance from Red Bull, said Wells Fargo senior analyst Bonnie Herzog.

Red Bull race

“The energy category had solid dollar sales growth driven by strong results from Red Bull which had +10.1% dollar sales growth this 4-week-period (+10.0% for 12-wks) driven by +5.0% eq. unit volume gains and +4.9% avg. eq. pricing. 

“Rockstar continued its strong sequential improvements in its results, generating an impressive +29.9% growth in dollar sales this period and gaining a solid 2.0 eq. volume share points, which we believe was largely sourced from Monster, which lost 2.1 share points.”

PepsiCo CEO: It's way too early to talk about how aspartame-free Diet Pepsi is performing

While the new aspartame-free version of Diet Pepsi has been on sale since August, Pepsi has not talked publicly about how it is performing, with CEO Indra Nooyi telling analysts on the Q3 earnings call last month that it was “way too early​” to provide an update.

Asked about the performance of the product, which uses the artificial sweetener sucralose instead of aspartame​, she said: “Our belief is that you’ve got to wait a few cycles to see what the purchase repeat adoption cycle is."

When will we see one of the big-three bring out a zero-calorie cola with natural sweeteners?

As for natural sweeteners, while there are zero-calorie carbonated soft drinks on the market using only natural sweeteners such as Zevia (which uses stevia and monk fruit), PepsiCo would not be launching an equivalent in the immediate future, she said.

PepsiCo CEO Indra Nooyi
PepsiCo CEO Indra Nooyi: "At this point, it's way too early to talk about how aspartame-free is performing.”

“I don't see a zero calorie naturally sweetened CSD (carbonated soft drink) on the horizon in the next few years, but if you want to talk about low-calorie naturally sweetener beverages, I think the combination of sweeteners, tools, techniques, we have is probably the best portfolio of development tools to enable that to happen.”

Coca-Cola: Smaller packages are the answer...

Speaking at the Morgan Stanley global consumer & retail conference call on November 17, Sandy Douglas, President-Coca-Cola North America, said: "People ask me, when do you think the carbonated soft drink categories are going to stop declining? ...That question is born of measuring volume, a gallonage, not packages. 

"The consumer is moving to smaller packages. A 12-ounce can be traded to a 7-ounce can, so that's a 30% reduction in volume, but it’s an increase in revenue... So there is no reason to believe that the category won’t continue to grow sales."

We have other irons in the fire...

Chief financial officer Kathy Waller, meanwhile, pointed out that there is more to Coca-Cola than carbonated soft drinks.

Kathy Waller Coca-Cola
Kathy Waller: Coca-Cola is the largest still beverage company in the world

"When people think about our company, they naturally think about our flagship product in the sparkling category. Many don’t realize that we are also the largest still beverage company in the world with leadership positions across multiple categories. And despite the progress we’ve made, we recognize that we need to continue to diversify and accelerate our presence in both existing and new fast growing categories."

In the US, she reminded analysts, Coca-Cola recently invested in premium juice firm Suja Juice and high-protein milk maker Fairlife, while in China, Coca-Cola has invested in the plant based protein drinks category via the [pending] acquisition of the beverage business of China Culiangwang Beverages Holdings.

Globally, meanwhile, Coca-Cola has also invested in Monster and Keurig, she added.

Related topics: Markets, Soft Drinks & Water

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