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Press Release: The U.S. Liquid Refreshment Beverage Market Accelerated Again in 2016



Bottled water became biggest category as carbonated soft drinks declined again

NEW YORK, NY, 19 April 2017: The U.S. liquid refreshment beverage market grew more quickly in 2016 than in 2015, which in turn saw acceleration over 2014's growth, according to newly released preliminary data from Beverage Marketing Corporation. The market's performance was the strongest seen in several years. Beverage–specific factors, such as the remarkable vibrancy of the sizeable bottled water segment, as well as more general ones, such as the continuing economic recovery, contributed to the overall increase in liquid refreshment beverage volume, which approached 33 billion gallons in 2016.

Bottled water had a truly significant year: it surpassed carbonated soft drinks to become the number-one beverage by volume. The category's essential traits — healthful, natural, calorie-free and convenient — increasingly appeal to U.S. consumers. Pricing remained aggressive, which also contributed to bottled water's performance. Its growth actually accelerated, which is unusual for a category its magnitude. Volume enlarged by 8.6%.

As they have for several years, niche categories outperformed most traditional mass–market categories. Ready–to–drink (RTD) coffee and value–added water in particular advanced forcefully in 2016. Larger, more established segments such as carbonated soft drinks and fruit beverages still failed to grow.

Value–added water outperformed all other segments with a 12.3% volume increase in 2016. Nonetheless, the segment accounted for a tiny share of total liquid refreshment beverage volume — less than 2% of all liquid refreshment beverage volume. It was the second smallest, ahead of only RTD coffee, which registered the second fastest growth of any segment in 2016. Energy drinks advanced by 4.8%, but also remained modest in size. Despite their growth, no energy drink, RTD coffee or value–added water brand ranked among the leading trademarks by volume. (No fruit beverage brand did either.)

Sports beverages, on the other hand, had Gatorade (including all brand variations) as the sixth largest liquid refreshment beverage trademark during the year. Exceeding 1 billion gallons for the first time in 2011, trademark Gatorade dipped below that level subsequently, returned to that level in 2015, and neared 1.1 billion gallons in 2016.

Although carbonated soft drinks slipped into second place among liquid refreshment beverage categories, they continued to account for four of the five top beverage brands by volume in 2016. Total category volume dipped by 0.8% from 12.6 billion gallons in 2015 to 12.5 billion gallons in 2016, which lowered their market share to less than 38%. Coca–Cola and Pepsi–Cola retained their usual first and second positions among the 10 leading beverage trademarks in 2016, with Mountain Dew and Dr Pepper claiming third and fourth place, but only one of the these brands, Dr Pepper, achieved any growth during the year. Sprite, the seventh largest liquid refreshment beverage brand, also enlarged.

Bottled water had four entries among the leading trademarks in 2016. All of them grew, and three of them moved well in advance of the overall liquid refreshment beverage category.

Four companies accounted for all of the leading refreshment beverage trademarks. Pepsi–Cola had four brands. Coca–Cola had three while Nestlé Waters North America (NWNA) had two and Dr Pepper Snapple Group (DPSG) had one.

"The beverage industry has undergone a seismic shift," said Michael C. Bellas, chairman and CEO, Beverage Marketing Corporation. "Bottled water's emergence as the number–one beverage type clearly signals a fundamental change in what consumers want from their beverages."

New York City–based Beverage Marketing Corporation is the leading consulting, research and advisory services firm dedicated to the global beverage industry.


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