Diet Drinks, Private Labels Biggest Winners in Beverage Segment

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BOSTON ( -- Overall volume for the U.S. carbonated soft drink segment essentially remained flat in 2002, according to an industry newsletter.

Beverage Digest/Maxwell today reported that carbonated soft drinks saw volume improve 0.8% vs. 2001's rate of 0.6%, but despite the slight increase, the figure is still considerably below the segment's annual 2% to 4% growth rate that was customary through much of the 1990s.

Retail value: $62.9 billion
The Bedford Hills, N.Y-based newsletter, which tracks the beverage industry, estimates the soft drink category's retail value last year grew 2% to about $62.9 billion, up from $61.7 billion in 2001. The rise is based on increased volume and pricing, with the top three marketers -- Coca-Cola Co., PepsiCo. and Cadbury Cadbury Schweppes -- accounting for about 90% of volume in the industry.

Among the marketers, Coca-Cola Co.

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performed best, thanks to volume growth of Diet Coke and last spring's successful launch of Vanilla Coke. Atlanta-based Coke saw its overall market share grow 0.6% to 44.3%, with volume up 2.1%. Its market share had declined from 1999 through 2001, but last year's 44.3% is nearing 1998's 44.5% share, Beverage Digest said.

Rival Pepsi-Cola Co., owned by PepsiCo, saw its market share drop 0.2% to 31.4% in 2002, while volume rose only 0.2%. One year earlier, in 2001, Pepsi-Cola benefited from the launch of Mountain Dew Code Red and Sierra Mist and the lemon-flavored extensions Pepsi Twist and Diet Pepsi Twist.

Battling brands
In a battle of two heavyweight brands, Coca-Cola's Coke Classic and Pespi's Pepsi-Cola, volume of Coke Classic fell 2%, with share down 0.6% to 19.3% while Pepsi-Cola volume fell 4%, with market share also down 0.6% to 12.6%.

No. 3 marketer, Dr Pepper/Seven Up, owned by the U.K.'s Cadbury Schweppes, saw market share fall 0.6% to 15%, while volume suffered 2.8%, based in part on lost share from 7 Up, which many of its bottlers have discontinued in favor of Sierra Mist. Volume for 7 Up, the country's No. 8 carbonated soft drink, was down 7.8%, while No. 6 soft drink Dr Pepper volume fell 3.3%.

Diet drinks were the only brands gaining market share. Diet Coke, the No. 3 carbonated soft drink, saw volume grow 3%, with its share up 0.2% to 9% of the category. Diet Pepsi, which ranks No. 7, saw its volume grow 3.5% and share increase 0.2% to 5.5%. Tenth-ranked Diet Dr Pepper volume rose 3.9%, with market share flat at 1.1%.

Private label success
Perhaps as a sign of tightening economic times, Toronto's Cott Corp., the leading producer of private label carbonated sodas, saw volume up 11.5%, with market share up 0.4% to 4.2% according to Beverage Digest numbers.

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