Press Clips: Smaller Cans, Bigger Profits

There’s been no major shift, no changing of the guard when it comes to carbonated soft drinks. The Coca-Cola Co. and PepsiCo continue to face declining sales of their core products as consumers show greater interest in emerging beverage categories, such as enhanced water and cold-pressed juice. However, the cola giants have benefitted from a self-enacted compromise: smaller cans.

“It’s kind of a happy medium,” Texas rancher George Krueger told Reuters. “I can have my sweet fix but not feel guilty for having so much.”

Regular and mini cans of Coke and Pepsi are pictured in this photo illustration in New York

Sales of mini cans increased by 3 percent in 2013, despite the category’s continued declines, according to market research group Euromonitor International. The article also notes that Coke saw double-digit growth with mini cans while volumes of sparkling beverages in North America were flat, and that smaller sizes, including mini cans, accumulated more than 60 percent of traditional Coke’s volume growth. Meanwhile, Pepsi’s mini cans have increased by 24 percent year-to-date in 2014 and grew by 34 percent in 2013.

And there could be room for more mini-can growth. Euromonitor notes that mini cans accounted for 3 percent of all carbonated beverage cans sold in the U.S. last year.

Weighing Craft Soda

Alongside their ales and stouts and barleywine, Appalachian Brewing Company sells root beer, birch beer and other craft sodas. So too does Rogue Ales & Spirits, which launched Rogue Soda at the beginning of the month. Jones Soda and Reed’s have long stocked mainstream retail shelves with their own craft sodas. But how big of a market is there for the niche side of a declining category?

CNBC wrote a story about craft soda, noting its pervasiveness across the U.S. despite the dominance of Coke and Pepsi. In the article, Beverage Digest editor John Sicher said that, at best, craft soda owns a 1 percent share of the approximately 9 billion-case soda market in the U.S.

While brands like Appalachian are beginning to pick up more distribution and visibility, as seen by its placement in 36 Walmart stores along the East Coast, the craft soda category nonetheless faces a conflict of identity.

“If Queen Elizabeth were holding a reception at Buckingham Palace,” Sicher said, “she might serve premium French champagne and premium Russian vodka, but if she were serving soft drinks, she’d probably be happy with a Coke or Pepsi because they’re viewed as first class by nearly all consumers.”

Drinking Grains in NYC

Grain-based beverages are picking up in New York City, according to the New York Daily News.

At Caffe Bene, a Korean-based café chain in Midtown, customers can pick up a quinoa smoothie or a five-grain coffee latte that packs sesame, barley, black beans, brown rice and soybeans.

“It’s like cereal on the go,” Freudna Mathurin, manager of Caffe Bene, said in the article. “When I tell people what’s in it they’re repulsed, but when I whip it up, they are pleasantly surprised.”

The meal replacement category, while still defining itself, continues to mature with the development of products like Rumble and Ibex Drinkable Yogurt. And by the looks of Caffe Bene, it seems that the category’s believers can also point to a retail space with a flair for sustenance.

Threats Below the Border

A Coke distribution plant in southern Mexico received threats before unspecified attackers burned four of the company’s delivery trucks, according to the Associated Press.

Coke’s largest Mexican bottler, Femsa, said that it has closed the plant in the southern state of Guerrero, an area south of Mexico City that’s known for gang activity. Femsa didn’t describe the threats, but said that they were directed at delivery personnel.

“While local companies are frequent targets for gang extortion, attacks on multinational firms are rarer,” the AP writes.