Beverage Industry Analysis, 2014

Beverage Industry Analysis

This is a summary of the annual analysis of the Beverage Industry sales and trends presented by the Beverage World Intelligence Company. This analysis dissects all major categories globally and in the US, including newcomers like Cider.

Next, you can read a quick summary of the opinions given by the industry experts Michael Bellas, Chariman & CEO of Beverage Marketing Corporation and its Managing Director and COO of Information Services, Gary Hemphill.


Bottled Water: The Beverage Industry Growth

The Bottled Water category kept growing with strong numbers regardless of the recession.

It is a perfectly positioned beverage: simple & natural, it has more SKUs and locations than any other product and is extremely well-priced.” In 3 to 4 years, it is expected to take over the Carbonated Soft Drinks (CSD) and hold the largest market share.

Price competition for water has been extremely aggressive, the key is to control supply chain costs, stable prices for plastic bottles, companies have installed very efficient high speed lines that have allowed them to double capacity.

Private label has been gaining share since it has no marketing costs. Nestle Water and Niagara Water are the most efficient companies.


Energy Drinks are Slowing Down

Energy Drinks are slowing a bit from previous years, but it seems to be more of a reflection of the general market. Our expectation is that some of the economy realities are not going to be repeated in 2014, and we think that energy is going to be higher than the 5.5% from last year. Negative publicity was affecting the energy drink business due to its contents like high concentrations of caffeine. Companies like Monster have done a lot of research trying to address this.

Energy Drink Volume USA 2013 Beverage Industry Analysis:
Results have shown that most caffeine intake in minors come from soft drinks and Starbucks coffee. As companies continue to tweak and diversify their products and use this type of research to improve their reputation, we should expect to see a major comeback.


Coffee and RTD Need to Check Their Calories

As consumer concerns for high caloric count are addressed, we can expect to see more specialized products on the shelf and continuous growth at a faster pace for the “coffee and ready-to-drink tea” category.

Ready-to-drink coffee beverages have traditionally been high in calories, which have caused skepticism among consumers. However, companies have continued to remedy this by reducing the amount of calories on their products with better sugar replacements.


Carbonated Soft Drinks Continue to Fall

This category has steadily been losing an incredible amount of market share. As the economy continues to improve, the category is likely to perform better than 2013 possibly at a rate of 1 to 2%. Hopefully some innovation on the diet subcategory will provide some much needed relief.

However, a steady return to positive growth is difficult, as younger consumers drink less CSD, they are given a wider variety of options to choose from. The CSD brands need to provide consumers with a reason to revisit their products, removing some of the negatives of the liquid and re-positioning in a way that is more relevant to Millennials.

Carbonated Soft Drinks Volume Decline Beverage Industry Analysis:
Authenticity, simplicity for example. But this will take time, it will be at least 4 to 5 years before we see some stabilization on the decline.


Beer Growth is Flat but Not For The Crafts

It has been a bit of a roller coaster for the beer industry. For the most part, the market has been flattening down. The re-installment of the payroll tax had a large impact on how consumers’ purchasing decisions.

However, Craft Beers and Super Premiums continued to growth despite the economy.
The expectation is that the category overall is going to improve in 2014 and possibly even grow a little (maybe half percent), as mainstream beers continue to struggle and consumers continue to migrate to craft beers.
Big brewers are trying to “premiumize” their product by purchasing craft beer brands. We will likely see an increase in craft beers, as the market is not saturated and big brewers will play a significant factor in that growth.


Hard Cider Incredible Growth

A very explosive growth for Cider, as it is starting to behave a little like beer with the segments, craft, imports, mainstream domestics, and new entries this year. This is a very young category, and distributors are attempting to position themselves as quickly as possible. While the brands coming from big guys like Anheuser Busch and Miller Coors have the available distribution channels, their success will be based on taste: their initial positioning.

Cider Market Volume US Growth- Beverage Industry Analysis:
Awareness in consumers is very high: the makers are focusing on the “different” premise and their success is growing the category. Cider is a category in itself, as it seems to be popular with women and is an opportunity for companies to approach a female target audience. Finally, while it is a new category its development is far ahead of the game.

Spirits volume change Vodka Whiskey

Spirits: Whiskey Makes a Comeback

Vodka continues to lead the category with another year of growth. Gin is definitively being pushed out, with the big surprise being Whiskey: which is having a renaissance with a 10.1% growth last year.

Flavor innovation and the artisan movement are mostly responsible. In short, there is a bright future ahead for this segment.


Spirits: Wine Continues to Flourish

Wine had a pretty good year, with a 2% growth. All of the top 10 brands experienced brand growth, and that is an extremely rare occurrence.

There is more innovation fueled by the adoption of wine by Millennials. Non-traditional packaging options like wine cans are starting to enter the market. Although it is but tiny percentage, they seem to have venues and drinking locations that make it work.

The wine bag in a box is also selling extremely well.

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