The soft drinks market - United States

1.1 Definition and scope of the study

The soft drinks market includes the different types of drinks listed below:

• Sodas ;
• Fruit and vegetable juices ;
• Syrups ;
• Iced teas.

These are mainly marketed by food distribution networks (supermarkets, grocery stores, etc.) or out-of-home consumption locations (restaurants, bakeries, vending machines, etc.):

Overall, the market is driven by various innovations (packaging and new formats in particular) and marketing efforts that help to stimulate demand in a sustainable manner, but also by general price growth over many years.

The global market is dominated by North America and Europe in terms of consumption; however, Asia is the fastest growing area. In the Western World, brands try to differentiate themselves in order to maintain sales amid growing health concerns in society. Indeed, different flavors and healthier alternatives (zero calorie for instance) prevail.

Market structure remains somewhat concentrated on the global scene; the industry is dominated by global corporations like Coca Cola, PepsiCo, and Anheuser-Bush InBev.

In the United States, the soft drinks market is mature. Nevertheless, estimates project a CAGR of 5.1% between 2018 and 2025. Several factors will help spur this growth, including an increase in demand for premium soft drinks, a growing population (and hence increased sales), high competition which increases product innovation and launches healthier alternative products. The last reason in particular is key amid growing health concerns in society; it is necessary for players to provide healthier, sugar-free, and low calorie alternative soft drinks.

The soft drinks market’s distribution of brand sales is fragmented given the large number of products on the market. In 2019, the three most sold brands were Coca-Cola (5% of all sales), Gatorade (4.2%) and Pepsi (3.4%). However, when looking at which companies are the largest in the industry, we find much higher concentration; indeed, in 2019 Coca Cola and Pepsi accounted for 38.5% of all sales. In third place we found Nestlé and Keurig Dr Pepper with a much smaller share.