Beverage growth slows, CSDs hurt worst

The growth of liquid refreshment beverages in the U.S. fell
to half the rate it charted in 2006, according to Beverage Digest.

The newsletter’s survey found that all-channel LRG volume
grew by 2 percent in 2007, down from 4.1 percent in 2006, and the worst may not
be over.

BD cited
statements by PepsiCo Americas Beverages chief Massimo D’Amore who said he
expected growth between 1 percent and 1.5 percent over the long term. Morgan
Stanley Analyst Bill Pecoriello forecasted flat growth for 2008, and 2 percent
per year beyond that.

Carbonated soft drinks suffered the worst, according to BD. The cooler-case staples still
account for 63.7 percent of the market, but their volumes are declining at increasing
rates. Excluding energy drinks, CSDs fell by 2.9 percent last year, while
non-carbonated drinks and water continue to grow.