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US soft drink market goes flat

Posted by ABC News on 4 April 2014
CHRIS UHLMANN: The fizz has gone out of America's massive soft drink market.

Industry analysts Beverage-Digest has released its annual results and for the ninth year in a row "carbonated soft drink" consumption is down and the decline is "getting steeper".

It says Australia is now a test market for the new "sweeteners" in an attempt to reboot interest in soft drinks.

North America correspondent Michael Vincent reports.

MICHAEL VINCENT: In the United States it's hard to believe this was the sound being heard less and less.

(Sound of a can of soft drink being opened)

AMERICAN MAN: There's one.

MICHAEL VINCENT: And yet US media is full of major brands use popular musicians, songs or sports stars or all three as in this ad shot in Brazil with footballers.

(Music - We can be heroes)

No matter which generation it's appealing to, American soft drink consumption is in decline and that decline is getting steeper.

JOHN SICHER: Carbonated soft drinks have been in decline now for nine years.

MICHAEL VINCENT: John Sicher is the editor of Beverage-Digest.

JOHN SICHER: Carbonated soft drinks were down 3 per cent which is worse than they've been in the overall beverage business was down as opposed to being moderately up in previous years.

MICHAEL VINCENT: The digest is the self-described information service for news and data on the global non-alcoholic beverage industry.

John Sicher says sugarless or low sugar drinks are no longer helping the major soft drink makers stem their nine year decline.

JOHN SICHER: The diet soft drinks are declining at a steeper rate than a regular or sugared soft drinks.

MICHAEL VINCENT: So if Americans aren't drinking soft drinks, some may just be choosing a market segment the soft drink companies haven't yet moved into - tap water.

JOHN SICHER: You know, right now there aren't a lot of signs of good growth. Energy drinks, which are small in volume but large in dollars, are seeing good growth. There's some growth in bottled water, but that's slowed. I think some consumers are drinking more tap water in the US.

MICHAEL VINCENT: Is it a sign then perhaps that Americans are thinking more healthily about their waist line?

JOHN SICHER: Consumers love the brands, but they are drinking less of the products because of the obesity and health and wellness headwinds.

I think Americans, I think consumers all over the world are thinking in a more healthy way about their waistline, their intake, but I think that the sweetener research is important.

In Australia right now, Pepsi is selling a product which is a mid-calorie product sweetened with sugar and stevia and I think this kind of product, that that particular product is sold by Pepsi today in Australia, France and Canada. Coke's got a similar product that's selling in Argentina and Chile.

Those kinds of products are cutting edge products and their success could determine how things go over the next few years.

MICHAEL VINCENT: As for the obesity "head winds" John Sicher refers to, the latest figures from the Journal of the American Medical Association show that more than one-third of American adults are obese and that number has not significantly changed in the past decade.

This is Michael Vincent in Washington for AM.



The Article @www.abc.net.au

Author: ABC News
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