Though soda sales have declined, operators have benefited from demand for energy drinks and sports drinks
New York, NY (PRWEB) June 26, 2014
The Soda Production industry produces carbonated soft drinks (CSDs) as well as energy drinks and sports drinks. Over the past five years, industry operators have faced declining domestic and international demand for regular and diet soda, mainly driven by growing health concerns among Canadians. In addition to increasing health consciousness instigated by the media's coverage on the health consequences of drinking soda, lower disposable income has caused some consumers to trade down to generic soda brands. To combat declining sales, leading soft drink producers, such as Dr Pepper Snapple Group (DPS) and Pepsico, introduced new products. For instance, in 2011, DPS launched its Dr Pepper Ten product, which has only 10 calories per serving. However, the sales of new products were not enough to offset declining demand for producers' flagship brands. Consequently, industry leaders The Coca-Cola Company and Pepsico acquired independent bottling companies in 2010 to strengthen their market position and boost earnings and revenue. Overall, IBISWorld anticipates revenue for the Soda Production industry to grow an annualized 0.1% to $2.5 billion in the five years to 2014, including a decline of 0.8% in 2014.
According to IBISWorld Industry Analyst Hester Jeon, “Despite the poor performance of companies' soft drink business lines, operators have benefited from growing demand for energy drinks and sports drinks; these products are still in the growth stage of their life cycles, enabling producers to capitalize on the expanding adoption of functional beverages.” While these product segments have grown over the past five years, consumption was slightly curbed by new regulations and the media's coverage of the health consequences of drinking caffeinated and sweetened beverages, like energy drinks.
In upcoming years, industry operators are anticipated to face declining sales of soft drinks.
Soda producers will have to contend with intensifying competition from producers in the Juice Production industry (IBISWorld report 31211cCA). “Furthermore, an increasing number of consumers will likely substitute regular and diet CSDs for carbonated and still-bottled water and ready-to-drink tea, which provides caffeine and refreshment like soda,” says Jeon. As demand continues to decline, a number of smaller operators are expected to exit the industry. Also, while sales of energy and sports drinks are anticipated to improve, growth will be slower than in the previous five-year period.
For more information, visit IBISWorld’s Soda Production in Canada industry report page.
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IBISWorld industry Report Key Topics
The Soda Production industry primarily produces carbonated soft drinks (CSDs) as well as energy and sports drinks. Water and other beverage production are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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