U.S. Sober-Curious Movement Ignites New Curiosity in Soft Drinks

One in five (21%) U.S. consumers participated in the alcohol-free January challenge in 2019, and final numbers from 2020 are likely to be even higher. The primary beneficiary? Soft drinks.

Soda drinks were the most popular option for last year’s Dry January participants, consumed by nearly half (46%), followed by water (43%). Whether on-premise or off-premise, soft drinks are performing well-55% of U.S. consumers enjoy soft drinks when eating and drinking out, and U.S. retail sales are experiencing 2.9% growth in the past year.

This month and year-round, soft drinks will be an interesting category to watch. Soft drink brands, spirit manufacturers and retailers all have a rich opportunity to effectively and strategically engage both the regular and occasional abstainers, and the spirit-and-mixer drinkers.

Dining out is one avenue. Nielsen CGA’s 2019 Channel Strategy Report reveals that casual dining is the leading channel for soft drinks, with nearly half (48%) of visitors there choosing them with their food-far more than either beer (29%) or cocktails (13%).

Rising interest in social moderation and health and wellness as a year-round lifestyle provides retailers and restaurants with a huge opportunity to grow soft drinks sales. At U.S. retail, non-alcoholic beverages are worth $7 billion more than just four years ago, and $3.2 billion more in the last year alone. More than half (54%) of U.S. consumers surveyed by Nielsen CGA indicated that they have consciously abstained from alcohol at some point in the last 12 months.

There needs to be wider appeal to year-round soft drinkers-more adult, sophisticated choices for those people who want something premium without alcohol.

Spirits Drinkers Eye Premium Mixer Options

It’s not just the abstainers who are driving soft drinks forward. While 21% of consumers participated in the last Dry January, 79% did not-and January is just one month in the year.

Spirits are driving the beverage alcohol industry forward more than beer or wine, with 5.7% growth at U.S. retail in the last year. Spirits are also the biggest category in several key channels in the on-premise space.

Different spirits demand different mixers, and soft drinks need to mirror the premiumization occurring within spirits. Spirit drinkers are willing to explore mixer variations depending on the spirit on offer, ranging from soda to fruit juice.

In the U.S. on-premise, vodka and whiskey are the biggest revenue drivers for spirits, as 20% of survey consumers drink vodka and 17% drink whiskey. Club soda and cola are among the favorites for mixer pairings.

Some of these are performing well at retail-cola sales are up 2.2%, club soda sales are up 7.1%-but opportunity remains for beverages like orange juice (down 6.3%) and cranberry juice (down 5.8%).

Regardless of the base liquor, consumers have very specific flavor preferences. Berry (54%) and fruity/sweet (50%) top consumer flavor preferences for the cocktails they drink. And at retail, assorted flavor soft drinks have an impressive 18.9% sales growth rate-followed by an increased affinity for ginger (ginger beer is up 7.7%, and ginger ale is up 5.9%).

The soft drinks opportunity is there: weekly U.S. retail sales for the week ending January 19, 2019 were up 5.7% in dollar sales year-over-year, and 52-week sales as of November 2019 are up 2.9%. The onus is on U.S. retailers, suppliers and manufacturers to maximize a sizable revenue opportunity, both this month and throughout the year.

Get in touch

Interested in learning more about the future of the On-Premise, or how Nielsen CGA can help you drinks-led retail, distribution or manufacturing business efforts? Contact us to learn more.

Methodology

The insights in this article were derived from:

. Nielsen CGA On-Premise Consumer Survey (OPUS), 2019.

. Nielsen CGA Channel Strategy Report, 2019.

. Nielsen Total U.S. measured off-premise channels, 52 weeks ended Nov. 23, 2019.

via Nielsen Newswire

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