The U.S. liquid refreshment beverage market grew more quickly in 2015 than in 2014, according to newly released preliminary data from Beverage Marketing Corporation. The market’s growth was the strongest seen in several years. Beverage-specific factors, such as the remarkable vibrancy of the sizeable bottled water segment, as well as more general ones, such as the continuing economic recovery, contributed to the overall increase in liquid refreshment beverage volume, which approached 32 billion gallons in 2015.
Bottled water had another notable year. The category’s core characteristics – healthful, natural, zero-calorie – increasingly resonate with U.S. consumers. Pricing remained aggressive, which also contributed to bottled water’s performance. Its growth actually accelerated, which is unusual for a category its magnitude. Volume enlarged by 7.9 %. Bottled water could become the number-one beverage by volume as soon as this year.
Niche categories continued to outperform most traditional mass-market categories. Energy drinks and, especially, ready-to-drink (RTD) coffee advanced muscularly during 2015. Bigger, more established segments such as carbonated soft drinks and fruit beverages failed to grow once again.
RTD coffee outperformed all other segments with a 16.5 % volume increase in 2015. Nonetheless, the segment accounted for a tiny share of total liquid refreshment beverage volume. It was the smallest, behind value-added water, which registered growth after having registered a significant decline the year before. Energy drinks advanced by 9.8 %, but also remained modest in size. Predictably, no energy drink, RTD coffee or value-added water brand ranked among the leading trademarks by volume (no fruit beverage brand did either.).
Sports beverages, on the other hand, had Gatorade (including all brand variations) as the sixth largest liquid refreshment beverage trademark during the year. Exceeding 1 billion gallons for the first time in 2011, trademark Gatorade dipped below that level subsequently, and returned to that level in 2015.
Carbonated soft drinks remained the biggest liquid refreshment beverage category, but they might not for much longer as they continue to lose both volume and market share. Volume slipped by 1.5 % from 12.8 billion gallons in 2014 to 12.6 billion gallons in 2015, which lowered their market share to less than 40 %. Carbonated soft drinks accounted for five of the 10 biggest beverage trademarks during 2015, with Coca-Cola and Pepsi-Cola retaining their usual first and second positions, but only one of the leading brands, Sprite, managed to grow during the year.
Bottled water had four entries among the leading trademarks in 2015, and every one of them grew well in advance of the overall liquid refreshment beverage category.
Four companies accounted for all of the leading refreshment beverage trademarks. Pepsi–Cola had four brands. Coca-Cola had three while Nestlé Waters North America (NWNA) had two and Dr Pepper Snapple Group (DPSG) had one.
“Consumers have spoken,” said Michael C. Bellas, chairman and CEO, Beverage Marketing Corporation. “They’ve made their preferences clear. The rapid growth in bottled water and functional and niche alternatives like energy drinks expresses a shift away from most large traditional beverage categories.”
New York City-based Beverage Marketing Corporation is the leading consulting, research and advisory services firm dedicated to the global beverage industry.