A year in drinks

In starting any new venture it is always nice to have a moment to reflect—one of those "where are you going? Where have you been?" sessions—before charging ahead.

So, with the year in beverages 2003 looming, we take a moment to reflect on the year just past and size up where the growth trends of 2002 leave us. Using ACNielsen Convenience Track to account for off-premise beverage sales for the 52-week period ending November 23, 2002, we take an early look at how the year shaped up.



Beer

Although beer consumption trends continued to drag in 2002, the year was a good one in terms of pricing trends. Anheuser-Busch lead the way in getting pricing improvements and, according to ACNielsen data (see box on page 38), dollar sales for beer will be up 3.7 percent for the year against a 1.2-percent bump in case sales. The boost in dollar sales makes beer the second-biggest grossing beverage category with $17.8 billion in sales.

Light beer saw the biggest bump in sales, up 6.3 percent from the year prior. Stout and porters also made a good showing with a 5.8-percent sales increase in all channels and a 19.5 percent bump in c-store outlets.



Flavored Alcohol Beverages

Malt-based flavored alcohol beverages (FABs) were the "It" drinks of early 2002, but by mid-year some industry insiders were speculating that the bloom was off the rose. Preliminary results for the year, however, suggest that the category is going strong. Charting at just under $1 billion, FAB dollar sales—including wine coolers—grew by 33.4 percent.

Perhaps more interesting is that the category without the not-so-hot wine cooler segment grew dollar sales 54.8 percent. In fact, the real drivers behind the category's growth were spirit-branded FABs like Smirnoff Ice and Bacardi Silver. Spirit-branded FABs were by far the biggest-growing beverages of the year with a 156.3-percent rise in dollar sales for the year.



Carbonated Soft Drinks

Carbonated soft drink consumption has been on the decline over the past three years—with each passing year shaving a sliver off CSD's share of stomach. In the end, CSDs remain the largest segment of the US beverage marketplace, with a 29-percent share of drink volume and about the same of dollar sales.

With so many non-carbonated soft drinks catching consumer attention and taste buds with a constant parade of new flavor offerings, it isn't too surprising that the bright spots in CSD sales in 2003 came from flavored line extensions. Vanilla Coke—regular and diet—was a hit as was lemon-flavored colas from both Coke and Pepsi. Mountain Dew Code Red avoided the sophomore slump and continued to chart double-digit growth in 2002. Red Fusion from Dr Pepper, Pepsi Blue and dnL from 7-Up added new tastes to other familiar trademarks.

The category as a whole charted just under 3 percent growth in dollar sales, bringing the total to $19.5 billion, while case sales maintained the levels of the previous year. Diet drinks outperformed the category, with 4.4 percent growth in all outlets and a 9.9-percent bump in the all-important c-stores.



Non-Carbonated Soft Drinks

Non-carbs are the drinks getting everyone's attention these days—from marketers, retailers and consumers alike. As a category non-carbs gained 4.1 percent in dollar sales and a 2.6 percent increase in case sales over the previous year.

In 2002 the standout in the category was bottled water once again. The drink that some still shake their heads over—"I can't believe I'm buying water."—continued to make double-digit gains with sales growth of 16.5 percent across all channels and 18.6 percent in c-stores, still the most important channel for water despite the focus on that marketers put on take home this year.

Iced teas continue to put up solid growth figures as well. The category charted 4.5 percent sales growth in 2002.



Sports Drinks

At $1.85 billion and growing at double digit rates, sports drinks are living up to their athletic pedigrees. ACNielsen tracks sports drink dollar sales growing at 11.8 percent while case sales increased 15.4 percent. Growth was a bit slower in c-stores, dollar and case sales still came in at enviable rates: 8.4 and 9.5 percent, respectively. BW