Supermarket News Special Report: Annual Category Guide

Articles
August 15, 2011

Supermarket News Special Report: Annual Category Guide

In this morning's edition of Supermarket News comes their annual 50 top category report based on information collected from Symphony IRI and The Perishables Group.

In this morning's edition of Supermarket News comes their annual 50 top category report based on information collected from Symphony IRI and The Perishables Group. Log into supermarketnews.com for the complete listing and report. Here are just a few highlights -- all on what we drink:

CARBONATED SOFT DRINKS 
Carbonated soft drinks, still the number one category, is still struggling, though the share loss has slowed since last year. Supermarket sales of the largest beverage category were a flat $11.9 billion for the 52 weeks ending June 12. That performance is better than the previous 52 weeks, when sales dropped about 3% to $11.8 billion. Premium beverages such as ready-to-drink tea and coffee, sports and energy drinks continue to steal share from the category. But CSD manufacturers are working to invigorate the effervescent refreshment beverages with new formulations and packaging. Coca-Cola, for instance, launched a new 1.25-liter bottle that sells for $1 or less. The beverage maker also introduced new merchandising tools, including 100% recyclable merchandise display racks for use in grocery and convenience stores in the U.S. The so-called “Give It Back” freestanding units are made of recyclable corrugated cardboard and designed to communicate sustainability to shoppers.

MILK
While dollar sales of total fluid milk are up across all retail venues, unit sales actually declined during the 52 weeks ending June 12, continuing a trend that has persisted for the past several years, according to SymphonyIRI. In U.S. supermarkets, dollar sales of all fluid milk were up 5.6%, but unit sales dropped almost two percent from a year earlier. Whole milk took the biggest beating, down 5.1% in unit sales. Unit sales of lowfat and skim milk are also down — by just under three percent. Rising retail prices could be stalling consumption, but there are other factors, Ed Jesse, professor emeritus, agriculture and applied economics at the University of Wisconsin, told SN.

Jesse said, “There’s a lot of competition, a lot of substitutes like soy milk, juice drinks, bottled water.” Jesse foresees a four percent drop in milk production being posted for July due to prolonged heat waves in the farm belt. “Cows just don’t milk well when there’s weather like that.”

COFFEE
The story in the coffee category continues to be the success of single-serve pods, with both unit and dollar sales growth exceeding 100% for the second year in a row. At $223 million, single-serve coffee’s overall value is still only 10% of ground coffee’s. But with its convenience appeal and lots of room for innovation, expect this segment to continue as the category’s shining star. Convenience is definitely a key selling point for coffee. Sales of whole beans are down, while instant coffee — no doubt fueled by Starbucks’ new Via line — saw decent growth. Ground caffeinated coffee continues to stay relevant with a variety of flavor profiles and as a champion of the Fair Trade label. Its $2.3 billion in sales is more than double all other segments combined. The drug channel saw more growth in the category than the food channel, reflecting these stores’ decision to increase and diversify their food offerings.

BOTTLED JUICE
While fashionable, functional beverages like coconut water and energy drinks soaked up all the buzz in the category, bottled juice saw flat sales overall. Time-honored choices like orange juice, apple juice and lemonade held up well. And some single-fruit juices like pineapple actually saw double-digit dollar growth. But some traditional juices like grape and fruit cocktail continued what’s become a precipitous drop in dollar and unit sales.

The beverage aisle has gotten crowded, and consumer dollars are increasingly going to drinks that offer clearly defined health benefits. Antioxidant counts are ballooning across the category. Everything from tea to soda is getting infused with vitamins. Drinks like grape juice and fruit cocktail, in comparison, are decidedly less appealing.

For the other 46 category insights and sales just log on to supermarketnews.com.