U.S. Beverage Consumption to Continue to Drop
Executive Summary
Beverage companies are seeing value erosion
Non-alcoholic beverages:
- Approximately one-third of companies studied have generated negative total return to shareholders over the last three years
Alcoholic beverages:
- Approximately half of companies studied have generated negative total return to shareholders over the last three years
- Consumers not likely to spur growth in 2010
Non-alcoholic beverages:
- 74%+ (depending on category) of consumers plan to spend the same or lessin the next 12 months (Feb 2010-Feb 2011) as compared to the previous 12 months
- 5% of consumers plan to spend “more than 25% less” for Carbonated Soft Drinks (CSDs), with an estimated impact of $1.3 billion in lost revenues
Alcoholic beverages:
- 89%+ (depending on category) of consumers plan to spend the same or less in the next 12 months as compared to the previous 12 months
- 14% of consumers plan to spend “more than 25% less” for Beer, with an estimated impact of $3.5 billion in lost revenues
- Eco-friendly was rated as the leastimportant attribute by consumers
- In an environment where consumer demand is not expected to fuel growth and pricing opportunities will be limited, beverage companies need to improve cost structures and effectively execute strategic initiatives such as achieving full benefits from acquisitions