Soda's Moment in the Sun

It has been a long decade for CSDs. Consumer's increasing interest in "better for you" and "functional" beverages has been arrested by the economy, and CSDs are benefiting.

Results from Coke, Pepsi, DPS, CCE and PBG are all very similar. While CSD volume has declined, its pricing has increased while input costs are down. As a result there have been strong results from the major players and stock prices are up. As a large bottler put it to me recently - this is the best year this century for the bottler: the old price point paradigms for 2 Liters and 12 Packs have gone, replaced by far higher price points based on multi-purchase deals (two 2 liters for $3 etc).

In the past year the cost of gas is 60% of last year, aluminum is 50% of last year and corn (the principal sweetener) is 50% of last year. And all of the major players took out a significant number of heads from their budgets as they expected a similar cost environment in 2009 as they faced in 2008.

But it is unlikely that these results are little more than a short downhill stretch along an uphill road towards the challenges of tomorrow. Health and functionality trends are still there, just covered in the interim by the challenges of the economy.

The large CSD businesses still have to figure out the right portfolio for future success.

A Quick Trip Down Memory Lane

Just found this blog entry about the RC Bottle Guy commercials we worked on back in 2000. Too bad we never got to properly run them - but I did get to wear the RC Bottle suit at a few sales meetings...

Big Press For Little Bottles

Around 4 years ago, I was researching energy drink pricing and first came across a 2.5oz product called (I think) Lift. While doing a sort of highest priced per ounce beverages, it came top.

That was 2005, and now in 2009 Energy shots have made the big time. The New York Times has gee whizz coverage, and ConsumerEdge is reporting a category trending in $1B in retail sales this year.

And to the big boys of energy, this is both a blessing and curse. A blessing because it grows the category: A curse because it makes them compete from a position of weakness Vs 5 Hour Energy - the 400 lb gorilla of the checkout.

But more interesting to me is the expansion of the energy need state. So, now it is shots - next will it be chews? Hydrive is already there.