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Global 100 Soft Drinks

Consumers still reached for carbonated beverages, but not as often. Demographics, health issues and changing tastes continued to pressure the sector, even in fast growing markets. The category rose in brand value, but only by 4 percent.

The population that traditionally drove cola sales, young people, is smaller in mature markets. Consuming fewer carbonated beverages, young people turned to alternatives like energy drinks and waters enhanced with vitamins.

Coconut water was especially popular in the US, falling under the general rubric of healthy, enhanced hydration. But even alternatives can raise issues. To counter the concern with sugar level, Tropicana, the orange juice brand owned by PepsiCo, added a line extension called Tropicana 50, which contains half the amount of sugar.

Consumption of carbonated soft drinks (CSDs) declined for the ninth straight year in the US, with a 3 percent drop in 2013, according to Beverage Digest. The industry publication reported that CSD volume in the US retreated to its 1995 level.

Main brands, such as Coke, Pepsi, Mountain Dew and Dr. Pepper outperformed their diet versions because of consumer concern with artificial sweeteners, according to Beverage Digest. These other trends emerged:


Because of health issues some national and local jurisdictions limited where brands could sell products (not near schools) and in what sizes (no giant drinks).


Although the category is the target of regulations and health concerns it keeps expanding and fragmenting.

Occasion remains key

Colas continue to market their brands for treats or indulgence, understanding that for the consumer ordering a slice of pizza and a beverage, immediate pleasure is the primary concern.

Innovation and experience

To achieve a level of personalization and unique experience, Coke partnered with Green Mountain Coffee, the company that makes single-serve coffee pods that include a selection from Starbucks. Coke intends to offer a range beverages prepared at home by the consumer.

The innovation is aimed especially at Millennials. It assures having the beverage when and where you want it. It also personalizes the product and delivers it with a unique experience in an at-home variation of Coke’s Freestyle vending machine, which enables consumers to mix about 100 flavors.

The approach is also based on the success enjoyed by Nespresso, which has created an experience around coffee drinking at home. With all its flavor options, Nespresso has made coffee into more of a treat.

In a separate innovation aimed at reviving the soft drinks category and remaining relevant, Coke launched Coca-Cola Life in Latin America, with cans that look like Coke but are green to emphasize both sustainability and health. The drink uses a combination of real sugar and artificial sweetener.

Betting that there’s still a growing market of young people who will drink carbonated beverages that are made without corn syrup and preservatives, and offered with some sense of personalization and authenticity, Starbucks is introducing a line of sodas prepared by baristas in its cafés.

Marketing the brands

Pepsi refocused on the Pepsi brand and invested heavily in marketing, particularly on traditional media, having focused earlier on social media. It aimed at reaching young cola drinkers with its “Live for Now” campaign and with the use of celebrity spokespersons, including Beyonce.

Pepsi also attempted to reach a young audience with the variety of flavors available from its Aquafina bottled water brand. Its Gatorade continued to dominate the sport beverages. After public concern over a Gatorade ingredient called BVO, brominated vegetable oil, the brand agreed to remove it.

In its focus on events and youth, Pepsi resembled the approach of Red Bull, the energy drink, with its sponsorship of music events along with extreme sports and other high-energy adventures. Sprite, a Coca-Cola lemon-lime drink, continued to benefit from being a clear beverage, which adds to the perception that it’s a healthier carbonated option.

The Coke “Open Happiness” campaign connected with people in an emotional way that emphasized the appeal and universality of the brand rather than the properties of the product. In an ad shown during the Super Bowl, Americans of various ethnicities performed “American the Beautiful,” each phrase sung in a different language, connected seamlessly into a musical quilt representing America’s diversity. To build on the traditional connection between cola and food, Coke marketing attempted to associate the brand with the home mealtime occasion.

Fast growing markets

Marketing cola as a drink for mealtime traditionally has been a way to cultivate cola drinking in fast growing markets. However, the standard assumption that rising wealth will drive steady soft drink growth in those markets is less true today because more products compete for the spending of the rising middle class.

In expanding in fast growing markets, brands faced multiple challenges including the taste appeal and health concerns. Health and childhood obesity are factors in China. Chinese generally don’t like the sensation of carbonation and prefer other drinks, like tea.

Tea is also popular in India. Indians are more disposed to drink carbonated beverages, and they have options to choose from, including Coke, Pepsi and Thums Up, a local brand acquired by Coke.

In another version of spreading happiness, Coke featured people in India and Pakistan in front of Coke vending machines designed so that the people from each nation could see each other, communicate and exchange the gift of a Coke.


In developed markets, consumption of carbonated drinks has been virtually flat for several years. Demographics in part drive this trend, but so do changing tastes and health concerns. Young people remain the primary consumers of carbonated drinks, but they are drinking less soda than past generations did. In Europe that population segment is shrinking while in the States, the Millennial group is growing slightly, but they have less money and more choices than previous generations. Driven by health concerns and changing lifestyles and tastes, young people are turning to other soft drink options like enhanced waters and energy drinks.

Lloyd Burdett
Head of Global Clients and Strategy
The Futures Company