Bottled water drove beverage market growth in 2014

by Keith Nunes
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The market for liquid refreshment beverages grew 2.2% during the year.

NEW YORK — The U.S. market for liquid refreshment beverages grew in 2014 after being basically flat in 2013, according to the Beverage Marketing Corp. (B.M.C.), an industry market research company. The group said factors driving the growth included the strength of the bottled water market, which pushed total category volume to 30.9 billion gallons during the year, a 2.2% increase compared with the previous year when category volume was 30.2 billion gallons.

The B.M.C. said bottled water “had a remarkable year” and added that aggressive pricing in the category grew volume during the year by 7.3%.

“Beverages rebounded in 2014,” said Michael C. Bellas, chairman and chief executive officer of the B.M.C. “Products that connect with what contemporary consumers want, like bottled water and functional offerings, added buoyancy to the ever-changing market.”

As has been the case in previous years, niche beverage categories continued to outperform most traditional mass-market segments. Premium beverages such as energy drinks and ready-to-drink (R.-T.-D.) coffee advanced particularly forcefully during 2014. Larger, more established segments such as carbonated soft drinks and fruit beverages failed to grow.

Ready-to-drink coffee moved forward faster than all other segments with a 10.7% volume increase in 2014, but the segment accounted for a tiny share of total liquid refreshment beverage volume. It was the smallest, trailing even value-added water, which registered the largest decline of any liquid refreshment beverage type other than fruit beverages or carbonated soft drinks, according to the B.M.C.

Energy drinks advanced by 6.4%, but also remained fairly modest in size. No energy drink, R.-T.-D. coffee or value–added water brand ranked among the leading trademarks by volume. Sports beverages, on the other hand, had Gatorade as the sixth largest beverage brand during the year. The sports beverage segment exceeded 1 billion gallons for the first time in 2011 and topped 1.4 billion gallons in 2014.

Carbonated soft drinks remained by far the largest liquid refreshment beverage category, but it continued to lose both volume and market share. Volume slipped by 1% from 12.9 billion gallons in 2013 to less than 12.8 billion gallons in 2014, which lowered market share from slightly less than 43% to just above 41%. Even so, the category declined more slowly than in previous years and some soda brands, such as Sprite and certain varieties of Mountain Dew, did achieve growth.
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