Carbonated beverage sales lose their fizz

The next few years mark a critical time for the U.S. beverage industry, executives and experts said at the recent Beverage Digest Wall Street Smarts conference, reports the Atlanta Journal-Constitution. From 2003 to 2006, U.S. beverage sales grew some 4 percent annually, slowed to 2 percent growth last year and are expected to flatten this year, according to Morgan Stanley. Sales have declined for three straight years for carbonated soft drinks, while other noncarbonated beverages -- teas, coffees and enhanced waters -- gained market share. And other segments, particularly bottled water, also are showing weakness, said Morgan Stanley analyst Bill Pecoriello. Not only is the economy a factor driving people to tap water, but environmental pressures are becoming part of consumer consciousness. And then there is the fact that the three major players in carbonated soft drinks have new leadership --Indra Nooyi became president and CEO of PepsiCo in late 2006. Larry Young is president and CEO of Dr Pepper Snapple Group, spun off this year from Cadbury Schweppes. Muhtar Kent, Coke's president and chief operating officer, takes over July 1 as CEO for Neville Isdell.

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