Nielsen Numbers: CSD Sales Decline Slows, But Category Remains Under Pressure

A new Wells Fargo Securities report covering Nielsen xAOC (expanded all outlets combined) sales data over a four-week period ending on Dec. 21 indicated that sales of carbonated soft drinks saw a minor decline in sales growth as compared to the same timeframe in the previous year, but that the category is still facing a difficult road ahead as consumers continue to shift to other beverage categories.

The report, authored by Bonnie Herzog, Managing Director, Beverage, Tobacco & Convenience Store Research Wells Fargo Securities, LLC, noted that the timing of the Thanksgiving holiday, which was included in the sales figures, loomed large in the strength of the numbers (down just 0.4 percent in dollar sales versus a 5.6 percent decline last year), however, diet CSDs continue to struggle, as the low-calorie beverages faced a 7.1 percent slide in dollar sales.

Other beverage segments fared better over the four-week period, with the energy drink category continuing to thrive. Led by Monster Energy, which saw a 14.5 percent leap in dollar sales, the overall segment saw a 6.4 percent bump in the timeframe. RTD teas also experienced a nice boost, up 2.4 percent, while dollar sales of sports drinks nudged up by 0.1 percent.

Of the big three CSD companies, The Coca-Cola Co. continues to outperform its rivals, particularly within the diet soda category, according to the report. Coke saw a total decline of 0.1 percent in dollar sales in the four-week period, with regular CSDs up 1 percent and RTD surging by 15.2 percent. While sales of the company’s sports drinks declined by 5.9 percent and its diet CSDs down by 6.5 percent, Herzog noted that Coke’s “pricing architecture continues to deliver, as [the company] gained 1.3 pts of y/y unit share this period in CSDs.” Moreover, Herzog believes that despite sustained challenges facing its core segments, Coke “continues to manage its business well in a challenged environment, allowing [it] to take share across the majority of categories.”

Meanwhile, PepsiCo also experienced a mild bump in dollar sales of its regular CSDs, which were up 0.5 percent on a 6.0 percent decrease in average eq. unit price and a 6.9 percent rise in eq. unit sales over the four-week timeframe. Despite a better performance by Pepsi’s diet CSDs (down 6.2 percent in dollar sales versus a 14.3 decline in the previous period), Herzog noted that the company’s non-CSDs lag in performance behind Coke. Dollar sales of Pepsi-owned sports drinks were down 5.7 percent and 5.9 percent, according to the Nielsen data.

Dr Pepper Snapple Group (DPS) appeared to face the most challenging period as total company dollar sales fell by 2.1 percent in the four-week period. The company regular CSDs declined by 0.7 percent, “as several key brands in its CSD portfolio continued to decline in the mid-upper-single digits,” Herzog wrote. DPS’s low-calorie beverages continue to struggle with dollar sales down 6.9 percent as compared to the previous year, while its RTD teas tumbled by 6.3 percent, despite a boom in dollar sales of its Snap Tea brand which leapt by 62.4 percent. Herzog views DPS’s over-exposure to CSDs as something that continues to be a burden on its performance, and noted that the company’s line of ten-calorie CSDs “does not appear to be improving,”