The Future of Colas Looks Dim

America's bad aftertaste from carbonated soft drinks is getting worse. In fact, demand for carbonated soft drinks (CSDs) is fizzling to such a large degree, will it be difficult one day to find them on store shelves? It may not yet be that CSDs are they going the way of the cassette tape and VCR, at least, not right now, but consumer preferences are changing quickly.

The lackluster sales of CSDs can be attributed to several things, especially health concerns and what's known as “carbonation fatigue,” and no longer find them fun to drink. Accourding to a recent Euromonitor.com report, concerns over obesity rates and diabetes in the U.S. have nudged some consumers away from sodas, because of the negativity surrounding their use of artificial sweeteners, high fructose corn syrup (HFCS) and the push to reduce sugar intake and improve health and wellness.

Government actions attempting to restrict the sale of such soft drinks don't help either. When big cities like New York try to pass ordinances banning the sale of full-flavored soft drinks in sizes larger than 16 oz by street vendors, restaurants, movie theaters and sports venues, as well as low-calorie carbonated beverage's weaker performance in 2013 than the review period average. Off-trade value sales dropped by just under 2 percent in 2013, Euromonitor's report states, in contrast to a negative compund annual growth rate (CAGR) of just 0.4 percent over the review period. 

Long-term forecasts for CSD sales remain equally bleak, as consumers are becoming more educated about what they eat and drink. Companies like Coca-Cola and PepsiCo are answering the call for development of and investment in noncarbonated beverage products, which can be formulated perhaps with cleaner labels. Already Coca-Cola says it will be expanding its reduced-calorie beverage line with its new Coca-Cola Life beverage, a lower-calorie entry sweetened with cane sugar and stevia extract.  No doubt, other CSD beverage marketers are doing the same.

The Food Leaders Summit, April 27-29 at Chicago's Westin River North, will examine such issues with conference presentations including as Beyond Clean Labels by Janet Carver, Culinology Group Manager at Ingredion, who notes consumers are looking more closely than ever at product ingredents such as those in CSDs, and nutritional information on food containers. This is fueling the movement to clean label ingredient and product development. Carver will also look at proactive and defensive labeling strategies and the long-term trends facing small and big food and beverage formulators and processors.

In fact, many legacy food and beverage brands will see anemic sales volume increases, because population growth is no longer a guarantee for top-line revenue growth. These brands will need to accommodate changing consumer health issues and demands for healthier more nutritional products.

John Grubb of Sterling Rice Group will examine such consumer shifts and innovations reshaping the food industry in a general session at the Food Leaders Summit on Seams of Disruption. He affirms that large legacy CPG brands are seeing single-digit declines, shifts in market share and demand and other unique challenges, forcing CPGs to cut costs nationally and globally. Grubb will examine several macro forces stimulating change in the food world all across the supply chain, from the foodservice sector and retail grocery to the growers and manufacturers. Hear from Carver, Grubb and other speakers at The Food Leaders Summit 2015 next month. To register, visit www.thefoodleaderssumit.com.