Volume fluctuations are creating a turbulent economic environment in non-alcoholic beverages, as higher volume growth pressures contributed to depressed sales during the two-week period ending June 4, according to an analysis of Nielsen data by Goldman Sachs Equity Research.
Overall volumes declined -1.8% in the two-weeks largely driven by drops in CSDs and decelerated volume growth in two leading categories: bottled water and energy drinks. Non-alc dollar sales rose 9.1% overall during the two-week window, compared to 11.6% in the four-weeks. Despite market turbulence, Nielsen reports that price growth increased 11% with significant contributions from CSDs, bottled water, sports drinks and RTD tea.
Dollar sales decelerated across almost all key non-alc beverage categories during the two weeks, including CSDs, bottled water, energy drinks, RTD coffee, RTD tea, still water and sparkling flavored water. Category leaders Coca-Cola, PepsiCo, Keurig Dr Pepper (KDP) and Monster Energy all saw slower sales growth during the period.
Sodas & CSDs
Coca-Cola led category sales during the two weeks, seeing double-digit, 14% growth in low calorie and regular lines. KDP saw 10.7% sales growth and PepsiCo saw the slowest rate of the three, up approximately 6% in the two-weeks. The results reflect the steeper volume declines despite price growth softening, causing overall sales deceleration.
Energy Drinks
Monster and Red Bull both saw modest sales growth during the period, rising 3.6% and 3%, respectively. Broader category sales decelerated on a one-year basis up 6.6% during the two weeks. On a three year stacked basis, category sales are up, climbing upwards of 30% during the same two-week period.
Volume growth decelerated during the two-week window, up only 2% compared to approximately 4% growth in the four-week and 12-week periods and 7.8% growth on the 52-week basis.
Among the category leaders, Monster saw volumes decline -0.8% while Red Bull reported decelerating volumes down 1.5% during the two-weeks compared to 3.5% in the four-weeks. Despite decelerated sales and volumes, price growth for both the top players remained relatively stable.
Bottled Water
Sales growth in the bottled water segment decelerated, growing 13.7% in the two-weeks compared to 17.8% in the four-weeks. Volumes declined 0.1% in the period compared to 3% growth on the four-week basis. Private label products continued to lead the category, with Blue Triton right behind seeing a 14.7% increase to about $3.8 billion in dollar sales growth. Coke, PepsiCo and KDP saw mixed results but overall sales decelerated as volumes fell during the two-weeks.
Sports Drinks
The sports drink category is also riding the wave with sales growth slowing to 7.2% in the two-weeks, compared to 12.9% in the four-week period, 8.1% for 12-weeks and 14.8% during the 52-weeks. Looking at the top players, PepsiCo sales decelerated to 7.1% during the two-weeks while Coke’s sales growth remained flat.
RTD Tea
Volume declines continued to hit the tea category. Growth was down -5.1% in the two weeks, compared to a -3.1% decline during the four weeks, and dropping -4.1% and -2% in the 12-week and 52-week periods, respectively. PepsiCo’s Lipton brand topped the group with slight dollar sales of 0.5% in the period; in contrast, Coke reported -1.6% sales drop in the same period.
Sparkling and Still Flavored Water
Flavored water makers also saw sales decelerate during the period with sparkling and still experiencing 3.3% and 3.7% growth, respectively. Volumes growth continued to steadily decline, with sparkling flavored dropping 5.5% and still falling 13.6% in the two-weeks.
RTD Coffee
RTD coffee followed the same trend as the rest of the non-alc set, with sales decelerating to -1.7% growth in the two weeks, compared to -2.4% in the four-weeks. Volume declines were steeper, declining -3.7% in the two-weeks compared to the -2.8% drop during the four-weeks.