Nielsen Numbers: CSDs Take a Hit, Red Bull Bests Monster Again

Wells_Fargo_Securities_logoA positive run for carbonated soft drinks (CSD) has ended as sales of major brands within the category declined for the first time in over a year, according to a new Wells Fargo Securities report, which covers Nielsen xAOC (expanded all outlets combined) sales data for the four-week period ending on June 13.

Meanwhile, the energy drink category continues to show dramatic and sustained growth, with sales rising by 9.8 percent as compared to the same period last year. It was Red Bull generating the strongest sales growth in the timeframe, surging by 11.9 percent and besting Monster, which saw a 9.5 percent leap.

The report, authored by Bonnie Herzog, Managing Director, Beverage, Tobacco & Convenience Store Research Wells Fargo Securities, LLC, found that the Coca-Cola Co. has once again outperformed its rivals as it relates to the CSD category, which was down by 0.2 percent (though up 1.4 for the prior 12 weeks). Despite a decline in 3.7 percent volume sales, Coke dollar sales rose by 1.8 percent, powered by a 5.7 percent increase in prices. While average prices of PepsiCo-owned CSD brands grew by 4.4 percent, dollar sales fell by 2.5 percent, with volume down 6.6 percent.

Wells Fargo noted that PepsiCo’s “CSD pricing premium vs. [Coke’s] CSDs is the largest gap in nearly a year as success of higher-priced premium products such as Mountain Dew Kickstart and Dew Shine have driven overall net price realization. However, this was offset by double-digit volume declines in nearly half of [PepsiCo] tracked CSD brands.”

There was some good news for PepsiCo as overall sales were up 0.8 percent in the period as, with the company seeing significant growth in snacks, sports drinks, and shelf-stable juices, all of which offset weakness in sales of its CSDs.

Dr Pepper Snapple, the third of the Big Three CSD companies, saw a rise of 0.6 percent in dollar sales of its brand during the period, as a result average price increases below its peers of only 1.5 percent and volume declines of 0.9 percent, according to the report.

While Monster’s multi-billion dollar equity and distribution deal with Coke is expected to provide the cola giant with a much needed jolt in sales, the energy drink titan has reported four straight months of single-digit sales growth —  after three months of double-digit dollar sales growth earlier this year — something Wells Fargo believes “could be partially related to the transition in distribution.”