CSDs By the Numbers: Zero Gains Shrinking Pie for Coke

CSD share might be slipping as a percentage of total beverages consumed, but there’s a Zero-sum gain out there – Coke Zero, that is.

After a long period of double-digit growth, the brand continues to be the growing star of the company’s sparkling portfolio. Over the past year the brand grew a little over 4 percent, according to A.C. Nielsen Scantrack numbers in Food, Drug and Mass retailers to push it into third place in the diet drink category, tied with Diet Mountain Dew in terms of total dollar share. That comes as the other top ten brands declined, with the exception of Pepsi Max, which has a comparatively low 2.2 share.

The addition of Zero has also bulked up Coke’s overall share in diet, pushing the company to about 39 percent of dollar share of the top ten,  to just 25 percent for PepsiCo properties, according to a reading of the Nielsen numbers by Wells Fargo Securities Analyst Bonnie Herzog . As drinkers continue to move out of full-calorie colas to diet, that strong lead among the “male” focused Zero brand and the more “feminine” Diet Coke (although don’t tell that to noted Diet Coke drinker John Daly) leaves Coke well positioned for the future.

Such views were recently backed up internally by Coke’s own Katie Bayne, the president of North America CSD’s. At the recent midyear Wall Street Smarts conference, Bayne told Beverage Digest editor John Sicher that in the last quarter Zero was up more than 9 percent. Coke overall has had a strong run over the last two years, riding pricing and packaging trends to a three percent gain in sales that reflected strong price positioning, according to views from Morgan Stanley analyst Dara Mohesian.

Meanwhile, Al Carey, the CEO of Pepsi Americas Beverages, made it clear that Pepsi plans to try to shore up its dollar share by increasing pricing consistency. During a recent discussion with Deutsche Bank in Paris, he railed against heavy pricing promotion, claiming that much of the CSD volume is being done during nine weeks of the year. Carey also said the company was looking to bring more packaging flexibility online. So while Zero has grown Coke’s CSD share, Pepsi isn’t counting itself out of the game just yet.