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Soda Production in the US - Industry Market Research Report

United States soda production market: $16.7 billion industry by 2018

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2014-04-15 21:11:01 - Soda Production in the US - Industry Market Research Report - a new market research report on

Falling per capita carbonated soft drink (CSD) consumption and increasing health awareness are pushing down revenue in the United States Soda Production market. Revenue slumped 8.8% in 2009 when Americans reduced regular spending on discretionary items like soft drinks and instead bought more items in bulk as a result of low disposable income due to high unemployment. In 2013, CSD consumption in the United States is estimated to be 38.6 gallons per person compared with 42.1 in 2008, representing a 3.5-gallon per capita decrease. Consequently, revenue is estimated to decline at an annualized rate of 2.9% during the five years to 2013, including a 3.6% decline in 2013 to $17.6 billion.

To mitigate losses from such a drop in consumption, the



industry has consolidated operations. This has included reducing workers at an annualized 9.1% rate during the past five years to total 19,049 people in 2013. It also spurred a 6.2% revenue increase in 2010 as The Coca-Cola Company and PepsiCo capitalized on bringing their bottlers in-house and raised product prices.

The steady decline in the per capita consumption of CSDs has also led the industry to innovate and create market alternatives to attract increasingly healthconscious consumers. Major players responded to near-saturation in the CSD market by enlarging their product ranges and expanding into sports and energy drinks, ready-to-drink tea and coffee, bottled water and newer beverage categories. These segments are growing at a faster rate than the CSD segment and are taking some sales away from CSDs.

Such products are targeted at market niches and attract a larger premium than CSDs. As a result, the Juice Production industry (IBISWorld industry report 31211c), which includes such alternative beverages, surpassed the Soda Production industry in size in 2008.

During the five years to 2018, the industry will face a difficult operating environment as publicity campaigns promoting healthier consumption offset rising consumer sentiment and discretionary spending. Competing manufacturers are anticipated to enter the beverage market by offering healthfocused drinks that will pique consumer interest. As a result, IBISWorld expects that private-label CSD sales will grow, almost balancing out flat consumption.

From 2013, industry revenue is forecast to decrease at an average rate of 1.0% per year to $16.7 billion in 2018.

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