August 16, 2024 – The carbonated drinks market is undergoing substantial changes, responding to renewed consumer preferences and shifts in the food and beverage industry. Here we will discuss the key trends and influences shaping the carbonated drinks market, including spotlights on sales and product launches, top brands, and consumer health pressures.
Carbonated Drinks Market Trends
Carbonated drinks represent 37% of sales in the US soft drinks category – the largest subcategory in this metric. Comparatively, juice and juice drinks represent 20%, and bottled water represents 15%. In volume, carbonated drinks represent 33% of the category, behind bottled water at 46%.
The United States also sells the most carbonated drinks compared to other countries, with Brazil, Mexico, and China as runner ups. However, the country places 11th in per capita consumption.
Companies and Brands in the Carbonated Drinks Market
The US carbonated drink market is dominated by a few key players. Coca-Cola, PepsiCo, and Keurig Dr Pepper represent the lion’s share of sales in the country. PepsiCo and Coca-Cola are also the most active launchers of carbonated drink products in the country, however Zevia has grown in share over the past five years to become the third most active launcher in the category.
PepsiCo is a global leader in convenient food and beverage products, with a strong presence in over 200 countries. Its portfolio includes iconic brands such as Pepsi, Mountain Dew, and Gatorade. PepsiCo’s strategy focuses on meeting consumer preferences for different drinking occasions, including sports/hydration, RTD coffee/tea, and energy drinks. The company is actively working to reduce sugar in its products, and has achieved significant success in this area.
Coca-Cola is a major player in the carbonated drinks market, with a portfolio that includes ready-to-drink alcoholic and non-alcoholic beverages. The company is leveraging analytics and digitization to build stronger relationships with customers. Coca-Cola is shifting its focus to developing emerging markets, where the population is increasingly consuming commercial beverages.
Finally, Zevia is an up-and-coming brand focused on producing plant-based sodas sweetened with stevia, offering sugar-free and calorie-free options.
Carbonated Drinks Consumer Trends
60% of consumers in the US have purchased a carbonated drink in the past year, according to carbonated drinks trend research, making it the tenth most popular food and beverage category in the country. Additionally, alongside all other subcategories within soft drinks, US consumers increased their consumption of carbonated drinks over the past year.
The penetration of carbonated drinks rises with age, however this does not apply to sparkling juices, where the opposite trend is true. Consumption of carbonated drinks also tends to decrease as age increases, with a larger portion of younger generations increasing their intake of carbonated drinks over the last year compared to older generations.
US consumers drink carbonated drinks more than any other soft drink, except for bottled water. Three-quarters of consumers say that they drink carbonated drinks at least once a week. These drinks are typically consumed around lunch and dinner, with younger generations expanding consumption to breakfast and nighttime.
Sugar content is the leading factor influencing purchase decisions in the carbonated drinks market, with concerns about health increasing with age.
Half of US consumers prefer everyday carbonated drinks, while almost half want authentic or traditional versions. Interestingly, many consumers prefer not to have health benefits added to their carboned beverages, however this is mainly an attitude from older generations.
Cola is the most preferred flavor within the carbonated drinks market, followed by lemon-lime, ginger ale, and orange.
Carbonated Drink Trends: New Product Launches
Carbonated drink launches have steadily grown since 2021. It is additionally the second largest soft drink segment for launches in the US, representing 17% of total launches in the overall category. Compared to the rest of the world, the US launched 10% of new carbonated drink products.
Sugar reduction is highly important to US consumers, with 46% saying that they actively limit the sugar in their diet. Sugar reduction claims in the carbonated drinks market have surged alongside, rising by 27% CAGR over the past five years. Stevia, a natural sweetener, is the one of the leading alternative sweeteners used in carbonated drink products, with a 15% CAGR over the past five years. Other natural sweeteners, such as apple juice concentrate, monk fruit, and erythritol, are also gaining traction.
Consumers are also increasingly seeking products with clean labels and aligning with their dietary restrictions. Non-GMO, vegan, and gluten-free claims have all seen rapid growth in launch share over the past five years.
Additionally, functional health claims are gaining ground, led by gut health ingredients. Prebiotic and probiotic claims are surging, driven by consumer interest in supporting digestive health. Other emerging functional ingredients include adaptogens, nootropics, and botanicals, aimed at enhancing mood, focus, and energy.
Finally, the top flavors in carbonated drinks have fluctuated heavily over the past five years. While cola remains the most popular, lime is seen second most often, outstripping all flavors in growth and tripling its launch share since 2019. Other new flavors in the top 10 include citrus, mango, punch, and lemonade. Yuzu, passion fruit, and hibiscus also emerged.
What’s Next in the Carbonated Drinks Market?
78% of US consumers drink carbonated drinks at least once a week, and roughly 30% of Generation Z and Millennials increased consumption. Brands can attempt to further accelerate consumption by focusing on growing Generation Z and Millennial consumption. They can explore introducing different product formulations for alternative usage occasions and use high-energy marketing imagery and messaging about creating adventure, making memories and connecting with friends.
Sweeteners are replacing sugars as the leading way to sweeten carbonated drinks, and natural sweeteners are driving growth. Brands should evaluate sweeteners carefully, as some can evoke consumer concerns. However, they can explore combining different sweeteners with varying intensities and experiment with flavors and other ingredients to create appealing carbonated drink taste and mouthfeel experiences without sugar. They can also take advantage of new sweetening technologies and solutions.
This article is based on our report, “Now & Next in Carbonated Soft Drinks in the US.” If you are interested in reading this report, feel free to request a demo.
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