Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Market exhibits small growth through price increases; consumer demand for soda on decline
- Amount and type of sweeteners in soda: Source of confusion and health concerns
- Diet soda shows bigger decline than regular soda during 2007-08
- Value-priced and innovative brands buck the recession
- Soda still remains the most consumed beverage; Hispanics, blacks, teens, and young adults key consumers
Insights and Opportunities
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- Soda needs an image makeover; focus on de-linking obesity and soda
- Why do people drink soda? Why should they stop drinking soda?
- Action needed to change soda image
- Need for a functional platform to broaden the soda appeal
- Will stevia be able to lure consumer back to soda?
- Finding the middle ground: creating a sweetener mix with stevia
Inspire Insights
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- Facebook, MySpace, Twitter and more…
- What’s it about
- What we have seen
- Implication for the soda industry
- Retro Pepsi
- What’s it about
- What we have seen
- Golden oldies are an ideal choice to connect with core consumers
Market Size and Forecast
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- Key points
- Consumer demand for soda declines; growth primarily from price increases
- Hispanics and blacks offer growth opportunity; women are likely to move away from diet soda
- Sales and forecast
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- Figure 1: Total U.S. sales and forecast of carbonated soft drinks, at current prices, 2003-13
- Figure 2: Total U.S. sales and forecast of carbonated soft drinks at inflation-adjusted prices, 2003-13
- Walmart sales
Competitive Context
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- Key points
- Recession and carbonated beverages: Mixed implications
- Energy drinks and carbonated juices offer stiff competition
- Price increase during the recession hurt sales
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- Figure 3: Trends in FDMx volume sales and price of regular and diet carbonated drinks, 2003-08
Segment Performance
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- Key points
- Consumer trend towards reducing calories may thwart long-term gains in regular soda
- Artificial sweeteners become unpopular due to unpleasant taste and health scare
- Seltzer/tonic water/club soda is to remain flat unless there is change in the marketing tone
- Sales and forecast, by segment
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- Figure 4: FDMx sales and forecast of carbonated soft drinks at current prices, by segment, 2003-13
- Figure 5: FDMx sales of carbonated soft drinks, segmented by type, 2006 and 2008
Segment Performance—Regular Carbonated Drinks
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- Key points
- Regular soda demand tumbles amid health concerns and rising prices
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- Figure 6: Trends in FDMx volume sales and price of regular carbonated drinks, 2003-08
- Teens, young adults, Hispanics and blacks: still attractive demographics in the segment
- Naturally-sweetened, all-natural soda is unlikely to provide the needed boost
- Sales and forecast—regular carbonated drinks
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- Figure 7: FDMx sales and forecast of regular carbonated drinks, 2003-13
Segment Performance—Diet Carbonated Drinks
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- Key points
- Diet soda volume sales exhibit bigger decline than that of regular soda in 2008
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- Figure 8: Trends in FDMx volume sales and price of diet carbonated drinks, 2003-08
- Taste of and health fears about artificial sweeteners remains the biggest hurdle to growth
- But, stevia is unlikely to be a major growth driver in the segment in the next five years
- Women move away from diet soda; low penetration among growth-driving consumers, i.e. Hispanics, Asians, and blacks
- Sales and forecast—diet carbonated drinks
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- Figure 9: FDMx sales and forecast of diet carbonated drinks, 2003-13
Segment Performance—Seltzer/Tonic Water/Club Soda
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- Key points
- Segment is not able to capitalize on the ongoing health trend among consumers
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- Figure 10: Trends in FDMx volume sales and price of seltzer/tonic water/club soda, 2003-08
- Need for innovation in flavor and strong marketing push
- Sales and forecast—seltzer/tonic water/club soda
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- Figure 11: FDMx sales and forecast of seltzer/tonic water/club soda, 2003-13
Retail Channels—Overview
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- Key points
- Supermarkets lose market share to mass channels; convenience stores prefer energy drinks
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- Figure 12: Total U.S. sales of carbonated soft drinks, by retail channel, 2006 and 2008
Retail Channels—Supermarkets
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- Growing clout of private labels
- Supermarket remains the biggest destination for beverages
- Supermarket sales
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- Figure 13: U.S. sales of carbonated soft drinks at supermarkets, 2003-08
Retail Channels—Convenience Stores
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- Energy drinks provide stiff competition to soda at the channel
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- Figure 14: New soda product introductions, energy drinks and carbonated soft drinks, by retail channel, January 2004-June 2009
- Slow economy may increase soda demand at the channel
- Convenience store sales
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- Figure 15: U.S. sales of carbonated soft drinks at convenience stores, 2003-08
Retail Channels—Mass
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- Discount pricing and one-stop-shopping shopping attract consumers
- Mass merchandiser sales
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- Figure 16: U.S. sales of carbonated soft drinks at mass* channel, 2003-08
Retail Channels—Other
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- Carbonated beverages face stiff competition from non-carbonates in vending
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- Figure 17: U.S. sales of carbonated soft drinks at other* channels, 2003-08
Market Drivers
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- Key points
- Ongoing obesity trends continue to hurt soda consumption
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- Figure 18: Percentage of population aged 20 and over who are overweight or obese or extremely obese, 1988-2006
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- Figure 19: Attitude towards health, 2004 and 2008
- Consumers are waking up to negative influences of obesity
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- Figure 20: Reasons for watching/controlling diet, 2004 and 2008
- Number of obese children and teens increases at an alarming rate in the U.S.
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- Figure 21: Prevalence of obesity among children and adolescents, 2-19 years of age, 1976-2006
- Does soda really contribute to high calorie intake among Americans?
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- Figure 22: Average sugar* intake on any given day by drinking certain non-alcoholic beverages, by age, 2006
- Artificial sweeteners garner skepticism
- High fructose corn syrup: Viewed as “unhealthy”
- Demographic influences
- Less-than-promising growth in teen population
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- Figure 23: U.S. population of teens aged 12-17, 2004-14
- Young adults are moving to energy drinks, but remain the top soda consumers
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- Figure 24: Population aged 18 or older, 2004-14
- Children 6-11: Tread with caution in targeting this demographic
- Hispanics and blacks continue to stimulate market growth
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- Figure 25: Population, by race and Hispanic origin, 2004-14
Leading Companies
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- Key point
- The big three account for nearly 90% of total sales but lose market share during 2008-09
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- Figure 26: FDMx sales of leading carbonated soft drinks companies, 2008 and 2009
Brand Share—Regular Carbonated Drinks
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- Key points
- Major regular soda brands become expensive; experience decline
- Lower pace of value-added innovation in 2008
- Value-priced brands including private label buck consumer attrition during recession
- Hispanic- and black-targeted brands see growth
- Natural sugar-sweetened soda brands face tough time in recession
- Manufacturer and brand sales
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- Figure 27: FDMx brand sales of regular carbonated drinks in the U.S., 2008 and 2009
Brand Share—Diet Carbonated Drinks
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- Key points
- Most top brands show decline in demand, but increase prices
- Coke Zero—the success story continues
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- Figure 28: Incidence of drinking Coke Zero, by men, Hispanics, blacks, and adults aged 25-34, October 2007-December 2008
- Functional positioning boosts Diet Pepsi Max
- Too many extensions are likely to create confusion about the marketing platform
- Manufacturer and brand sales
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- Figure 29: FDMx brand sales of diet carbonated drinks in the U.S., 2008 and 2009
Brand Share—Seltzer/Tonic Water/Club Soda
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- Key points
- Private label continues to have strong presence in the segment
- Flavor innovation needed to stimulate growth
- Manufacturer and brand sales
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- Figure 30: FDMx brand sales of seltzer/tonic water/club soda n the U.S., 2008 and 2009
Brand Qualities
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- Broadening role of limited-edition line extensions
- Packaging makeovers: Enhanced brand value or attention-grabbing gimmick?
Innovation and Innovators
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- Figure 31: Number of new U.S. carbonated soft drink introductions, 2004-09
- PepsiCo leads the new product count during 2004-08
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- Figure 32: Number of new U.S. carbonated soft drink introductions, by top companies, 2004-08
- Soda makers strive to create an “all-natural” image in 2008
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- Figure 33: Number of new U.S. carbonated soft drink introductions, by product claims, 2005-08
- All-natural claims on the rise
- Trend towards natural (cane) sugar and natural low-calorie sweeteners
- No high-fructose corn syrup; cane sugar-sweetened soda
- Coca-Cola brings stevia to a mass-marketed brand
- Environmentally friendly packaging gains ground in soda
- Flavor trends in soda; cola flavor continues to top the list
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- Figure 34: Number of new U.S. carbonated soft drink introductions, by flavor, 2004-08
- U.S. lags global soda makers in launching functional soda
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- Figure 35: Number of new global carbonated soft drink introductions with functional positioning, 2005-08
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Advertising and Promotion
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- Overview
- The big three—Coca-Cola, PepsiCo, and Dr Pepper Snapple Group—promise bigger push behind soda in 2009
- Coca-Cola and PepsiCo launch new campaigns focused on optimism
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- Figure 36: Pepsi, Optimism, Television Ad, 2008
- Coca-Cola uses gender-based marketing in promoting its diet soda brands
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- Figure 37: Coke Zero, James Bond Television Ad, 2008
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- Figure 38: Diet Coke, Heidi Klum on the runway, Television Ad, 2009
- Diet Pepsi Max adopts a functional marketing platform
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- Figure 39: Diet Pepsi Max, What is Love, Television Ad, 2009
- PepsiCo takes an unconventional marketing approach with Mountain Dew
- Dr Pepper strives to connect through “Frasier”
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- Figure 40: Dr Pepper, Dr Frasier, Television Ad, 2008
- Cherry 7 Up Antioxidant—marketing on a popular pro-health platform
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- Figure 41: Cherry 7 Up Antioxidant, Television Ad, 2008
Carbonated Drinks Usage, Type and Frequency
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- Key points
- Number of soda drinkers declines; consumers move away from both regular and diet soda
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- Figure 42: Trends in the incidence of personal consumption of carbonated drinks, 2004-08
- Trends in consumption of soda by key demographic groups
- Both men and women move away from regular soda
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- Figure 43: Trends in individual consumption of soda, by gender, 2004-08
- Young adults aged 18-24 show the highest incidence of moving away from regular soda during 2006-08
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- Figure 44: Trends in individual consumption of soda, by age group 18-34, 2004-08
- Adults aged 45-54 display a steep decline in diet soda consumption during 2006-08
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- Figure 45: Trends in individual consumption of soda, by age group 35-54, 2004-08
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- Figure 46: Trends in individual consumption of soda, by age group 55-65+, 2004-08
- Trends in the frequency of drinking carbonated soft drinks
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- Figure 47: Trends in the mean frequency of drinking carbonated drinks, 2004-08
- Men are heavy diet soda drinkers, compared to women
- Consumption frequency declines with age
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- Figure 48: Trends in mean frequency of drinking soda, by gender, age, household income, and households with children, October 2007-December 2008
The Teen Soda Consumer
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- Key points
- The number of teen soda drinkers declines during 2004-08
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- Figure 49: Trends in the incidence of teen personal consumption of carbonated drinks, 2004-08
- Regular cola consumption frequency declines among teens
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- Figure 50: Trends in the mean frequency of drinking carbonated drinks among teens, 2004-08
Incidence and Reasons for Drinking More or Less Soda Compared to a Year Ago
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- Key points
- Incidence of drinking more or less regular soda compared to a year ago
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- Figure 51: Incidence of drinking more or less regular soda compared to a year ago, by age, March 2009
- Reasons for drinking more regular soda compared to a year ago
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- Figure 52: Reasons for drinking more soda than a year ago, by gender, March 2009
- Reasons for drinking less regular soda compared to a year ago
- Weight management is the biggest reason to drink less regular soda
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- Figure 53: Reasons for drinking less regular soda than a year ago, by gender, March 2009
- Incidence of drinking more or less diet soda compared to a year ago
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- Figure 54: Incidence of drinking more or less diet soda compared to a year ago, by gender, March 2009
- Reasons for drinking less diet soda, compared to a year ago
- Artificial sweeteners are the biggest reason consumers are moving away from diet soda
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- Figure 55: Reasons for drinking less diet soda than a year ago, by gender, March 2009
Carbonated Soft Drinks: Attitudes and Motivations
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- Key points
- Gender impact on attitudes
- Health
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- Figure 56: Health-related attitudes towards carbonated soft drinks, by gender, March 2009
- Brands and flavor
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- Figure 57: Brand choice-related attitudes towards carbonated soft drinks, by gender, March 2009
- Attitudes towards targeting women for diet soda and drinking less for the environment
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- Figure 58: Attitudes towards targeting carbonated soft drinks at women and drinking less soda for environmental reasons, by gender, March 2009
- Men and diet soda
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- Figure 59: Men’s attitudes towards diet carbonated soft drinks, March 2009
- Impact of age on attitudes
- Health
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- Figure 60: Health-related attitudes towards carbonated soft drinks, by age, March 2009
- Brands and flavors
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- Figure 61: Brand choice-related attitudes towards carbonated soft drinks, by age, March 2009
- Attitude towards targeting women for diet soda and drinking less for the environment
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- Figure 62: Attitudes towards targeting carbonated soft drinks at women and drinking less soda for environmental reasons, by age, March 2009
- Men and diet soda
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- Figure 63: Men’s attitudes towards diet carbonated soft drinks, by age, March 2009
Impact of Race/Hispanic Origin
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- Asians and blacks show significant drop in the consumption of regular soda
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- Figure 64: Trends in individual consumption of soda, by race/Hispanic origin, 2004-08
- Blacks and Hispanics are heavy—regular and diet— soda drinkers
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- Figure 65: Trends in mean frequency of drinking soda, by race/Hispanic origin, October 2007-December 2008
- Incidence and reasons for drinking more or less soda compared to a year ago
- Blacks and Hispanics report drinking more regular soda compared to a year ago
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- Figure 66: Incidence of drinking more or less regular soda compared to a year ago, by race/Hispanic origin, March 2009
- Reasons for drinking less regular soda compared to a year ago
- Hispanics report using less regular soda because of obesity issues
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- Figure 67: Reasons for drinking less regular soda than a year ago, by race/Hispanic origin, March 2009
- Incidence of drinking more or less diet soda compared to a year ago
- Hispanics and blacks report drinking more diet soda compared to a year ago
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- Figure 68: Incidence of drinking more or less diet soda compared to a year ago, by race/Hispanic origin, March 2009
- Carbonated soft drinks: Attitudes and motivations
- Health
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- Figure 69: Attitudes and motivations towards carbonated soft drinks, by race/Hispanic origin, March 2009
- Brands and flavors
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- Figure 70: Attitudes and motivations towards carbonated soft drinks, by race/Hispanic origin, March 2009
- Attitudes towards targeting women for diet soda and drinking less for the environment
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- Figure 71: Attitudes and motivations towards carbonated soft drinks, by race/Hispanic origin, March 2009
- Men and diet soda
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- Figure 72: Attitudes and motivations towards carbonated soft drinks, by race/Hispanic origin, March 2009
Attitudes Towards Soda Sweeteners
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- Figure 73: Attitudes towards sweeteners in soda, by gender, March 2009
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Cluster Analysis
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- Dieters
- Who they are
- Opportunity
- Realists
- Who they are
- Opportunity
- Soda Poppers
- Who they are
- Opportunity
- Cluster characteristics
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- Figure 74: Carbonated beverage clusters, March 2009
- Figure 75: Incidence of using carbonated soft drinks by type, by carbonated beverage clusters, March 2009
- Figure 76: Incidence of drinking more or less regular soda compared to a year ago, by carbonated beverage clusters, March 2009
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- Figure 77: Attitudes and motivations towards carbonated soft drinks, by carbonated beverage clusters, March 2009
- Figure 78: Attitudes towards sweeteners in soda, by carbonated beverage clusters, March 2009
- Cluster demographics
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- Figure 79: Carbonated soft drinks clusters, by gender, March 2009
- Figure 80: Carbonated soft drinks clusters, by age, March 2009
- Figure 81: Carbonated soft drinks clusters, by household income, March 2009
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- Figure 82: Carbonated soft drinks clusters, by race, March 2009
- Figure 83: Carbonated soft drinks clusters, by Hispanic origin, March 2009
- Cluster methodology
Custom Consumer Groups
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- Women aged 35+, empty nesters are key diet soda consumers
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- Figure 84: Incidence of personal consumption of diet soda among women aged 35+ and various clusters, October 2007-December 2008
- Flavor innovation is likely to motivate consumers to drink more soda
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- Figure 85: Incidence of drinking more regular soda, cross-tab by respondents who like to change soda flavors frequently, March 2009
IRI/Builders Panel Data: Key Household Purchase Measures
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- Overview of carbonated beverages
- Regular soft drinks
- Consumer insights on key purchase measures
- Brand map
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- Figure 86: Brand map, selected brands of regular soft drinks, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 87: Key purchase measures for the top brands of regular soft drinks, by household penetration, 2008*
- Low calorie soft drinks
- Consumer insights on key purchase measures
- Brand map
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- Figure 88: Brand map, selected brands of low calorie soft drinks, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 89: Key purchase measures for the top brands of low calorie soft drinks, by household penetration, 2008*
- Seltzer/tonic/club soda
- Consumer insights on key purchase measures
- Brand map
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- Figure 90: Brand map, selected brands of seltzer/tonic/club soda, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 91: Key purchase measures for the top brands of seltzer/tonic/club soda, by household penetration, 2008*
Appendix: IRI/Builders Panel Data Definitions
Appendix: Other Useful Consumer Tables
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- Personal consumption of soda by key demographic groups
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- Figure 92: Trends in individual consumption of soda, by gender, age, race/Hispanic origin, households with children, October 2007-December 2008
- Incidence of drinking more or less regular soda compared to a year ago
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- Figure 93: Incidence of drinking more or less regular soda compared to a year ago, by gender, March 2009
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- Figure 94: Incidence of drinking more or less regular soda compared to a year ago, by presence of children, March 2009
- Reasons for drinking more regular soda, compared to a year ago
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- Figure 95: Reasons for drinking more soda than a year ago, by presence of children, March 2009
- Reasons for drinking less regular soda, compared to a year ago
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- Figure 96: Reasons for drinking less regular soda than a year ago, by presence of children, March 2009
- Incidence of drinking more or less diet soda than a year ago
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- Figure 97: Incidence of drinking more or less diet soda compared to a year ago, by presence of children, March 2009
- Attitude towards soda sweeteners
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- Figure 98: Attitude towards sweeteners in soda, by age, March 2009
Appendix: Trade Associations
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