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IBDEA 2016
The Shifting Beverage Landscape
March 19, 2016
Beverage Marketing Capabilities
Beverage Marketing Corporation utilizes an integrated model for providing information,
analysis and advice to beverage industry clients
Unique Beverage Industry Expertise
for Providing “Added-Value” to Selected Clients
Cutting Edge Insights: New Age Emergence, Multiple Beverage Competition,
Specialty Beer Opportunity, Bottled Water Dominance, Hyper-Category
Competition, Micro-Marketing Age
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Agenda
I.
Market Overview
II. Key Trends
III. Category Updates
IV. Projections
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
State of the Industry – The Good and the Bad
Beverage Headlines
 Liquid refreshment beverage market grows for second consecutive year
in 2015 after flat performance in 2013
 Carbonated soft drinks experience another modest sales decline in 2015
 Bottled water continues its solid growth trend led by single-serve water
segment
 Niche categories continue to outperform traditional mass-market
categories
 Wine and spirits lead alcohol growth in 2015, and beer experiences
slower growth performance
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
The economy continues to move in a positive direction with improved GDP growth and
lower unemployment, but improvement has been slow due to severity of the recession
Quarterly GDP Change
2010 – 2015
Unemployment Rate
2000 – 2015
10%
2.5%
2.3%
3.1%
1.8%
1.3%
5.0%
4.6%
4.5%
4.1%
3.9%
3.8%
3.9%
3.5%
9.0%
8.1%
8%
7.4%
2.7%
2.0%
2.2%
1.8%
1.3%
2.0%
0.6%
0.4%
0.4%
9.6%
9.3%
6%
6.2%
6.0%
5.8%
0.7%
5.8%
5.5%
5.1%
5.3%
4.7%
4%
4.6%
4.6%
4.0%
2%
-2.1%
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
2010
2011
2012
2013
2014
2015
0%
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
Source: Beverage Marketing Corporation; Bureau of Economic Analysis, Department of Commerce, Department of Labor
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Beverage stock performance was solid in 2015 – consistent with the performance of the
overall stock market – but market has been rocky first quarter of 2016
Stock Price Performance
2010 – 2015
2010
2011
2012
2013
2014
2015
KO
+15.4%
+7.1%
+2.8%
+13.5%
+6.3%
+6.3%
PEP
+7.5%
-2.2%
+2.5%
+21.2%
+14.0%
+8.9%
DPS
+24.2%
+5.5%
+11.9%
+10.3%
+34.7%
+30.2%
CCE
+18.1%
+1.1%
+23.1%
+39.1%
+21.3%
+1.2%
COT
+36.7%
-29.7%
+28.3%
+0.4%
-13.9%
+57.0%
Soft Drinks
+14.6%
+3.8%
+8.6%
+9.8%
+11.6%
+6.6%
Beverages
+15.0%
+4.2%
+10.1%
+13.1%
+14.1%
+9.1%
N/A
+10.0%
+10.5%
+12.8%
+10.4
+3.9%
Consumer Goods
Source: Beverage Marketing Corporation; Google Finance
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Gasoline prices are almost a dollar a gallon lower than last year but to date have only had
a modest impact on beverage consumption
• Lower gas and oil prices are a net positive for the beverage industry
• However, “thriftiness” under changing economic times is now the new norm
Gasoline Prices
2010 – 2015
$5
$3.9
$4
$3.8
$3.7
$3.3
$3
$2.8
$2.9
$2.8
$2.9
$3.4
$3.7
$3.7
$3.6
$3.6
$3.7
$3.7
$3.7
$3.4
$3.5
14Q4 – 15Q4:
-25% Growth
$3.6
$2.9
$2.8
$2.3
$2.6
$2.2
$2
$1
$0
10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4
Source: U.S. Energy Information Administration
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Consumer sentiment surpassed pre-recession levels in 2015 for the first time
Annual U.S. Consumer Sentiment Index
1995 – 2015
105.8
103.2 104.6
92.2
93.6
107.6
95.2
89.2 89.6
87.6
88.6
92.9
87.3
Pre Rec Level
85.6
63.8
66.3
72.6
84.1
76.4
79.2
68.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Thompson Reuters/University of Michigan
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
The U.S. beverage market has experienced overall mixed performance since declines
during the recession, but has now achieved back-to-back years of growth
• Growth accelerated in 2015 over 2014
U.S. Total Beverage Market
2010 – 2015P
1.7%
Volume Change
1.5%
1.1%
0.8%
0.0%
-0.1%
2010
2011
2012
2013
2014
2015(P)
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Post-recession annual beverage revenues have been consistently positive, but the
differential versus volume growth is narrowing
U.S. Total Beverage Market
Volume and Wholesale Revenue
(Millions of Gallons and Wholesale Dollars)
2010 – 2015P
3.7%
3.1%
2.7%
2.7%
Change
2.3%
1.5%
1.7%
1.5%
1.1%
0.8%0.9%
0.8%
0.0%
-0.1%
2010
2011
2012
Volume
2013
2014
Wholesale Revenue
2015(P)
10/15
CAGR
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
In 2015, refreshment beverages led by bottled water and some niche categories are
growing fastest
U.S. Beverage Market – 2015P
Volume Change
2.9%
0.5%
0.8%
-5.2%
Refreshment
Beverages
Traditional
Beverages
Beverage
Alcohol
Tap Water
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
In general, traditional mass market categories have struggled while niche categories
have experienced growth
• Bottled water is the primary exception of a mainstream category that has thrived
The U.S. Liquid Refreshment Beverage Market
2015P
18.8%
Volume Change
10.1%
6.1%
-1.1%
-2.1%
CSDs
Fruit
Bevs
RTD
Coffee
Energy RTD Tea
Drinks
7.6%
5.8%
5.5%
Value
Added
Waters
Sports
Bevs
Bottled
Water
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Wines and spirits have been driving beverage alcohol growth with beer experiencing
more modest growth
The U.S. Beverage Alcohol – 2015P
2.5%
Volume Change
2.0%
0.8%
0.5%
Beer
Wine
Spirits
Total Beverage
Alcohol
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Coffee continues to show healthy growth among traditional beverages thanks to success
of single-cup brewers and popularity of coffee cafes like Starbucks and others
The U.S. Traditional Beverage Market – 2015P
Volume Change
1.9%
0.8%
0.5%
-1.3%
Milk
Tea
Coffee
Total Traditional
Beverages
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
One reflection of a healthy beverage industry is the decline of tap water, and tap water
consumption has been trending down in recent years
• After many years of declines, tap water consumption increased during the recession
Estimated Tap Water Volume Growth
2000 – 2015P
25%
23.5%
20.2%
20%
15%
10%
7.4%
6.4%
5%
-0.8%
0%
1.1%
-0.5%
-1.8%
-5%
-10%
-6.7%
-4.0%
-5.3%
-4.3%
-9.7%
-5.2%
-10.9%
)
'1
4/
15
(P
'1
3/
14
'1
2/
13
'1
1/
12
'1
0/
11
'0
9/
10
'0
8/
09
'0
7/
08
'0
6/
07
'0
5/
06
'0
4/
05
'0
3/
04
'0
2/
03
'0
1/
02
'0
0/
01
-15%
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Over the last five years, bottled water has increased its share of stomach by more than 4
share points, capturing the undisputed #2 position
Volume Share of Stomach by U.S. Beverage Segment – Billions of Gallons
2010 – 2015P
100% = 61.7
100% = 59.3
Tap/Others
Value-Added Water
Energy Drinks
Wine/Spirits
Sports Bev
Fruit Beverages
12.7%
12.9%
0.6%
2.1%
2.1%
0.8%
1.0%
2.4%
0.7%
2.2%
6.0%
5.0%
Tea
6.0%
6.1%
Milk
10.6%
9.2%
Coffee
10.0%
10.8%
Beer
10.8%
10.5%
Bottled Water
14.8%
19.0%
CSDs
23.3%
20.4%
2010
2015(P)
P: Preliminary
Source: Beverage Marketing Corporation
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
More non-alcoholic beverage categories grew in 2014 than declined, and niche categories
generally outperformed large traditional categories
2015 Category Winners and Losers
WINNERS*
LOSERS**
• Bottled Water
• CSDs
• RTD Coffee
• Milk
• RTD Tea
• Fruit Beverages
• Sports Drinks
• Energy Drinks
• Valued-Added Water
* Volume increases
** Volume declines
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
More categories experienced improved performance in 2015 even when they declined
2015 Beverage Report Card
IMPROVED
• Bottled Water
WORSENED
• CSDs
• Energy Drinks
• Fruit Beverages
• Milk
• RTD Coffee
• RTD Tea
• Sports Drinks
• Value-Added Water
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Traditional Key Consumer Drivers Are Evolving
 Health and wellness  Balanced nutrition
 Variety  Flavors, seasonals, hybrids
 Convenience  With product information
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Beverages with health and wellness attributes are growing at a rate faster than those
categories without such attributes
U.S. Health/Wellness Beverage Market vs. All Others
2010 – 2015P
38.3
38.4
38.3
38.2
38.4
Health/Wellness Market
Growth
2011 – 2015P
37.7
21.0
2010
22.0
21.4
22.3
24.1
23.0
Millions of Gallons
Billions of Gallons
Year
2011
2012
All Others
2013
2014
2015(P)
Wellness
All Others
10/11
1.8%
0.4%
11/12
2.8%
-0.4%
12/13
1.5%
0.3%
13/14
3.0%
-0.4%
14/15P
4.5%
-1.4%
10/15P
CAGR
2.7%
-0.3%
Health/Wellness
P: Preliminary
Source: Beverage Marketing Corporation
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Despite negative publicity on CSDs and other full-calorie refreshment beverages, caloric
intake from refreshment beverages has been steadily declining over the last decade
• The growth of bottled water and lower-calorie options have contributed to the caloric decline
U.S. Refreshment Beverage Calories Per Day
1990 – 2015P
Calories Per Capita Per Day
251.6
263.0
243.7
238.0
230.3
212.5
1990
1995
2000
2005
2006
2007
222.7
2008
214.8
2009
210.1
2010
205.7
2011
202.3
2012
197.9
2013
196.5 196.5
2014
2015P
P: Preliminary
Source: Beverage Marketing Corporation
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
The beverage industry has committed to a reduction of 20% of calories from beverages
by 2025 through the Balanced Calories Initiative
Source: Beverage Marketing Corporation; American Beverage Association
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Beverage companies are moving to healthier product portfolios. Coca-Cola, for example,
has expanded participation in high-growth areas through investments. Many of the
categories feature healthy product attributes
Source: Beverage Marketing Corporation; Coca-Cola Company
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Additionally, PepsiCo is expanding its healthier beverage options; today about half of its
refreshment beverage volume comes from healthier products
PepsiCo U.S. Beverage Volume Mix
1997
Today
24%
49%
51%
76%
Full- or mid-calorie refreshment, energy, indulgence
Zero- or low-calorie beverages (<40 calories per 8oz), active hydration, healthy juices
Source: Beverage Marketing Corporation; PepsiCo
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Since the 1970s, beverage consumers have grown in sophistication, with increasingly
complex motivations for consuming beverages
Evolution of Beverage Need-States
1970s to Present
Key Motivations for Beverage Choices
Today
2000s
1990s
1980s
1970s
• Refreshment
• Basic Function
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•
•
•
•
•
Pick me up
Social & Fun
Active & Portability
Sweet Indulgence
Healthy Alternative
•
•
•
•
•
•
•
•
•
Pick me up
Social & Fun
Active & Portability
Sweet Indulgence
Healthy Alternative
Fortified Fuel
Flavorful Health
Portable Hydration
Purifying
•
•
•
•
•
•
•
•
•
•
•
•
Pick me up
Social & Fun
Active & Portability
Sweet Indulgence
Healthy Alternative
Fortified Fuel
Flavorful Health
Portable Hydration
Purifying
Mood enhancement
Natural
Guilt-negation
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Pick me up
Social & Fun
Active & Portability
Sweet Indulgence
Healthy Alternative
Fortified Fuel
Flavorful Health
Portable Hydration
Purifying
Mood enhancement
Natural
Guilt-negation
Herbal
Relaxation
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Expanding consumer motivations for beverage choices has resulted in a steadily
broadening array of beverage categories
Evolution of Growth of Beverage Categories
1970s to Present
Today
2000s
1990s
1980s
1970s
• Milk & Juice
• CSDs
• Coffee &
Alcohol
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• Milk & Juice
• CSDs
• Coffee &
Alcohol
• RTD Teas
• Juice Drinks
• Isotonics
• PET Waters
• Flavored CSD's
• Milk & Juice
• CSDs
• Coffee &
Alcohol
• RTD Teas
• Juice Drinks
• Isotonics
• PET Waters
• Flavored CSD's
• Fresh-packed
Juice
• Smoothies
• Coffee Drinks
• Milk & Juice
• CSDs
• Coffee &
Alcohol
• RTD Teas
• Juice Drinks
• Isotonics
• PET Waters
• Flavored CSD's
• Fresh-packed
Juice
• Smoothies
• Coffee Drinks
• Nutrientenhanced
• Energy
• Milk & Juice
• CSDs
• Coffee &
Alcohol
• RTD Teas
• Juice Drinks
• Isotonics
• PET Waters
• Flavored CSDs
• Freshpackaged Juice
• Smoothies
• Coffee Drinks
• Nutrientenhanced
• Energy
• Functional
• Health &
Wellness
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
New product introductions have mostly been on the rise after declining in 2009 due to the
recession in the beverage industry
New Beverage Product Introductions
2001 – 2015
4.7
4.5
4.4
3.9
Thousands of SKUs
3.8
4.3
4.0
3.2
2.9
2.6
2.6
2005
2006
2.7
2.0
1.7
2001
1.6
2002
2003
2004
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: Beverage Marketing Corp.; Mintel
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
State of Emerging Small Brands
 Craft & artisanal products trending upward
 Consumers seek new experiences
 More startups enter industry
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Most emerging categories have health and wellness attributes and/or promise specific
functional benefits
Select Offerings and Categories of Today’s Emerging Beverages
Functional
Probiotic
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Chia
Cold Brew
Shots
Coconut
Water
Plant-based Water
Kombucha
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Craft beer continues to be the fastest growing segment in the beer category as new
breweries now total 4,000 nationally; craft beer now accounts for about 11% of
category volume
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
State of Big Brands
 Most large iconic brands down
 Operating big brands a challenge
 Declines accelerated in past year
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Big brands in Decline in 2014
Top 10 Soft Drinks
Top 10 Fruit Beverages
Pepsi-Cola
Diet Coke
Top 10 Beer Brands
Bud Light
Tropicana
Pure
Premium
Coors Light
Budweiser
Mtn. Dew
Sunny D
Miller Lite
Natural Light
Diet Pepsi
Coke Zero
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Busch Light
Busch
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Bottled water has gained the most volume over the last 10 years while carbonated soft
drinks have lost the most
Decade Comparison
2004 – 2014
Which Categories Gained, Which Lost Volume?
Category
Millions of Gallons
2005/15P CAGR
Bottled Water
4,163
RTD Tea
2.0%
274
Value-Added Water
3.6%
136
RTD Coffee
10.2%
66
Fruit Beverages
Total LRB
14.7%
476
Sports Drinks
CSD
6.6%
795
Energy Drinks
4.5%
-2.9%
-1,041
-1.9%
-2,656
2,212
0.7%
P: Preliminary
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Carbonated soft drink volume declined for the 11th consecutive year in 2015 but remains
the most popular beverage in the United States
• Despite the decline, category performance actually improved in 2014 from preceding years and
worsened only slightly in 2015
U.S. Carbonated Soft Drink Market
2010 – 2015P
CSD Market Growth
2011 – 2015P
13.8
13.6
13.3
Billions of Gallons
12.9
12.8
12.6
2010
2011
2012
2013
2014
2015(P)
Year
Change
10/11
-1.8%
11/12
-1.8%
12/13
-3.2%
13/14
-1.0%
14/15P
-1.1%
10/15P
5-Yr CAGR
-1.8%
P: Preliminary
Source: Beverage Marketing Corporation
-34-
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
As the search for a good-tasting, natural sweetener continues, some brands have begun
to use stevia but taste issues remain
Stevia Sweetened CSDs
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
One potential source of growth is craft sodas, which are beginning to emerge as a viable
option for today’s consumers with new brands and companies entering the market, but
the segment is unlikely to reach the same level as craft beer
Craft Soda
-36-
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Smaller packaging sizes have been a source of innovation and also help contribute to
reduced caloric intake
-37-
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Consumer health and variety demands negatively impact CSD consumption. CSD
category performance is further impacted by other external factors that contribute to
consumption declines
 Key reasons for reducing CSD consumption:
o Health
o Variety
 Legislation and messaging from government and regulatory agencies
 Tax threats aimed at reducing consumption
 Negative commentary from medical studies and other organizations
 Steady drumbeat of negative press
Source: Beverage Marketing Corporation
-38-
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Modest pricing increases in carbonated soft drinks coupled with significant pricing
declines in bottled water have contributed to respective category performances
Wholesaler Dollars Per Gallon Indexed to 2000
2014 Absolute Price
$4.18
150
140
130
Index
120
110
100
90
80
70
$1.21
60
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015P
CSDs
PET Single Serve Bottled Water
Source: Beverage Marketing Corp.
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Bottled water has experienced healthy growth each year since the recession
• The category is aided by its positioning as the ultimate health beverage
• The category now approaches nearly 12 billion gallons
U.S. Bottled Water Market
2010 – 2015P
11.7
10.9
9.1
10.1
Billions of Gallons
8.8
9.6
2010
2011
2012
2013
2014
2015(P)
Bottled Water Market
Growth
2011 – 2015P
Year
Change
10/11
4.0%
11/12
6.2%
12/13
4.7%
13/14
7.3%
14/15P
7.6%
10/15P
CAGR
6.0%
P: Preliminary
Source: Beverage Marketing Corporation
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
While stable, PET water pricing continues to be historically aggressive and is likely to
remain so at least through 2015
• Every-day pricing has been as low as $2.49-2.99 for 24-packs at retail
Advances in Supply Chain Costs
 High-speed bottle filling in a range of 15-18 million cases per year per
line
 Stable to declining resin costs
 Continued bottle light-weighting
 Low fuel costs
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Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Similar to craft soda, from a small base, enhanced waters of all types are now
proliferating and gaining traction in all parts of the country
• These premium value, craft type waters are adding additional benefits to consumers’ water
experience
Enhanced Waters
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PH Balanced Water
Essence Water
Cap-Activated Water
Essentia
Hint
Activate
Plant Water
Trader Joe’s
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Not all enhanced water beverages are hits with consumers: This asparagus water sold at
Whole Foods met with backlash and ridicule days after it was introduced with a price tag
of $5.99 per bottle
-43-
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Like most other mass-market refreshment beverage categories, fruit beverage
consumption has been on the decline over the last decade
• Category performance has been negatively impacted by high relative prices, high caloric and sugar
content, and limited innovation
U.S. Fruit Beverage Market
2010 – 2015P
3.4
3.3
3.2
3.1
3.1
Billions of Gallons
3.6
Fruit Beverage Market
Growth
2011 – 2015P
2010
2011
2012
2013
2014
2015(P)
Year
Change
10/11
-3.4%
11/12
-4.1%
12/13
-1.9%
13/14
-2.8%
14/15P
-2.1%
10/15P
CAGR
-2.9%
P: Preliminary
Source: Beverage Marketing Corporation
-44-
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
One source of growth in fruit beverages has been the superpremium category
• Products like Naked (PepsiCo), Odwalla (Coca-Cola) and Bolthouse (Campbell Soup) are leading
the growth in the segment
Enhanced Waters
Naked
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Bolthouse Farms
Odwalla
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Fountain/dispensed product volume has experienced soft performance over the last five
years, driven by overall declines in the carbonated soft drink category
• Beverage Marketing only tracks fountain volume in RTD tea and CSD categories
CSD and RTD Tea Volume by Dispensed vs. Packaged
Millions of Gallons
2000 – 2014
18,000
09/14
CAGR
16,000
14,000
Dispensed
-0.3%
Packaged
-1.4%
12,000
10,000
8,000
6,000
4,000
2,000
0
2000
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2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
A number of products introduced by beverage companies are exclusively fountain and
only available via dispensers
SoBe Lean Cranberry Grapefruit
Mtn Dew
Baja Blast and Sangrita Blast
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IZZE TwiZt
Stubborn Soda
Brisk Unsweetened No Lemon
Patio
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
New dispensing systems from Coke and Pepsi are offering consumers more variety
particulary in QSR locations
Variety and Customization
Coke Freestyle
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Pepsi Spire
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Renewed focus has been placed on home dispensing through the aggressiveness of
SodaStream and Coke’s participation in the launch of the Keurig Kold system
• PepsiCo is now making its Pepsi and Sierra Mist brands available in capsules for SodaStream
• But the jury is still out on how successful home dispensing can be
Keurig Kold
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SodaStream
Bonne O
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
In the future, the marketplace will be characterized by numerous high-value, low
relative volume opportunities
Almond
Milk
Alc
Pouches
(2009-2014 CAGR)
High Growth
Coconut
Water
Hard
Cider
20%
Enhanced
RTD Teas
Malternatives SPFJ
Organi
c
Juices
Projected
Value
$250M
SS
Dairy
Drinks
$500M
Craft
Beer
RTD
Coffee
Straight
Whiskey
10%
Sports
Drinks
Energy
PET Water
RTD Teas
Vodka
Sparkling Wine
Imp.
Beer
Tequila
Bulk/HOD
Water
$1B
Table
Wine
$5B
$10B
Prem CSDs
Flavored
Water
Enhance
d Water
Fruit
Drinks
100%
Juice
-5%
Enhanced
Fruit
Drinks
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$25B
$35B
0%
Diet
CSDs
Mil
k
$50B
Reg
CSDs
Soy
Low Growth
Copyright © 2016 Beverage Marketing Corp.
The Shifting Beverage Landscape
Among refreshment beverages, the strongest growth is projected for bottled water,
energy drinks and RTD teas and coffees
• CSDs, milk and fruit beverages will need to innovate and provide healthier options to rekindle
growth
2016 Liquid Refreshment Beverage Projections
LRB Category
RTD Coffee
2016(P)
+12.0% to +13.0%
Energy Drinks
+7.0% to +8.0%
Bottled Water
+5.5% to +6.5%
RTD Tea
+5.0% to +6.0%
Value Added Water
+4.0% to +5.0%
Sports Drinks
+3.0% to +4.0%
Carbonated Soft Drinks
-0.7% to -1.2%
Fruit Beverages
-1.0% to -2.0%
TOTAL LRBs
+1.9% to +2.3%
P: Projected
Source: Beverage Marketing Corporation
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Copyright © 2016 Beverage Marketing Corp.
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Beverage Marketing Corporation
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• Advisors