CSDs Turn Around Sales Declines

First sales growth in over a year reason to be encouraged

Published in CSP Daily News

By
Steve Holtz, Online News Director & Beverage Editor

share a coke

NEW YORK -- Carbonated-soft-drink sales saw some small growth during July, the first positive momentum for the subcategory of beverages in more than a year, according to a new report from Wells Fargo Securities.

Total CSD dollar sales were up 0.7% during the latest expanded all outlets combined (XAOC) Nielsen four-week period ending Aug. 2, 2014. This bump was "driven by an equivalent unit pricing increase of 1.1% and equivalent unit volume declines of 0.4%," Wells Fargo analyst Bonnie Herzog wrote in the note. "This represents the first positive growth in dollar sales for CSDs in over a year."

All three major soda makers saw sale improvement during the period, but much to the overall increase was driven by Coca-Cola Co., according to the report.

Coca-Cola Co.’s total CSD dollar sales were up 2.5% for the four-week period (and +1.0% for 12 weeks) on +0.8% equivalent unit sales/volume growth and +1.7% in pricing. "The Coke brand had particularly strong +6.0% dollar sales growth, which we attribute to its successful Share a Coke campaign," Herzog wrote.

PepsiCo's CSD dollar sales were up 0.8% over the four weeks (and -0.7% for 12 weeks) on flat pricing and +0.8% equivalent unit volume growth.

Dr Pepper Snapple Group's CSD dollar sales were up 0.9% (and -0.9% for 12 weeks) on -1.8% equivalent unit sales growth and -0.8% equivalent unit pricing.

Meanwhile during the 4-week period, iced teas had solid dollar sales growth of 4.9%, while sports drinks were down 2.7%. Bottled water dollar sales were flat, while energy-drink dollar sales were up a solid 10.1%, led by Monster's 12.2% growth and offset by Red Bull's modest growth of 5.7%.

"Bottom line," Herzog concluded, "we are encouraged by the sequential improvements in CSDs, led largely by KO, and continue to remain confident on the long-term growth runway for the energy category."

By Steve Holtz, Online News Director & Beverage Editor
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