Juice and drink sales rebound

September 13, 2011

Shoppers seek healthier beverages, more exciting flavors and greater convenience. The category delivers and grows post-recession.

Dollar sales of juices and drinks are up again after their recession slide. Since shoppers want healthier choices, manufacturers have brought out lower-sugar and lower-calorie varieties, combined flavors, added nutrients and updated package graphics to more powerfully convey a good-for-you position for juices and drinks.

Shoppers have lots of change to absorb in juices and drinks, including attention to childhood obesity with healthier beverage choices for kids, and a greater transparency in formulations. These new offers sometimes morph into a premium image and higher prices for brands. Price creep has also reached shelves with the replacement of half-gallon containers by 59-ounce versions, and the addition of smaller, more convenient packages that add portability for on-the-go consumption but carry a higher price per ounce.

The category rebound is wide-scale, according to Nielsen data for U.S. food stores ($2 million and over in annual sales) for the 52 weeks ended June 11, 2011. Tracking prepackaged, UPC-coded products only, dollar sales of total juices and drinks rose 2.1% to $10.71 billion, on a 1.3% equivalized unit volume (EUV) gain. Although this performance contrasts with a cycle of dollar sales declines during the two previous years, by 2.6% and 2.1%, the category is still below the $11.00 billion it posted in the 2008 period.

Gains came recently in the shelf-stable and refrigerated segments, which drive 96% of category sales, though the far smaller frozen segment descended for its third straight year.

Shelf-stable dollar sales rose 2.6% to $6.59 billion, on a 2.8% EUV increase, reported Nielsen. Although this performance improves over the prior two years when dollar sales slid by 2.9% and 1.7%, this segment is still below the $6.73 billion it posted in the 2008 period.

A similar trend unfolds in the refrigerated segment. Dollar sales grew by 2.2% to $3.78 billion, on a 1.6% EUV drop, in the most recent 52 weeks. Although this performance topped the prior two years when dollar sales slipped by 1.9% and 1.7%, the segment is still below the $3.84 billion it posted in the 2008 period.

Meanwhile, dollar sales of frozen juices and drinks appear to be in the Ice Age. Down three straight years, by 4.5%, 11.4% and most recently by 7.7% to $341.4 million, EUV is in a more precipitous four-year slide - down 8.2%, 6.4% 12.6% and most recently 11.9%, the Nielsen data show.

In the refrigerated case, plastic containers now account for the majority of dollar sales and nearly half of unit sales - the result of four consecutive years of growth at the expense of cartons, which have lost popularity during the same period. Dollar sales of refrigerated juices and drinks in plastic containers accounted for $2.09 billion in the latest 52 weeks ended June 11, on the strength of a 7.4% dollar rise and a 1.0% EUV advance.

Plastic is also king of the shelf-stable segment, accounting for $4.87 billion in sales; this was achieved on a 3.6% dollar sales gain and a 4.3% EUV climb, said Nielsen.