US on-trade soft drinks sales rallied in 2021, as formal COVID-19 restrictions were scaled back or lifted in many regions, particularly during the busy summer months for on-premise beverage consumption. Higher rates of overall consumer mobility and domestic travel led to robust growth in fast-casual chains, coffee specialists and other high-traffic forms of foodservice, which, in turn, boosted overall soft drinks volume through on-trade channels.
Packaged water remains a standout category in terms of US retail performance, with double-digit growth in the sparkling flavoured bottled water, which is led by Lacroix (National Beverage) and Bubly (PepsiCo), with Aha from Coca-Cola also having been launched in March 2020. Flavoured “seltzer” (the common retail terminology for the category) has emerged as the preferred, healthier alternative to sugar-sweetened carbonated soft drinks for many consumers, with seltzer brands branching into caffeinated and other functional propositions in 2022.
2021 was characterised by strong value growth for leading soft drinks producers, as impulse sales and on-trade recovery created a more favourable channel mix, boosting bottom-line performance. After a period of SKU rationalisation in 2020, Coca-Cola announced its largest ever acquisition in November 2021, taking full control of Body Armor – a coconut water-based sports drinks brand – for USD5.
While larger basket sizes and growth in large-format retail channels (such as supermarkets, hypermarkets and club stores) lifted overall volume in US soft drinks in 2020, this came at the cost of a less favourable package and channel mix for producers. Larger, less profitable pack types (such as large multipacks) were temporarily preferred by the consumer, damaging producer profitability.
The strong foodservice growth seen in 2021 is expected to continue in 2022, with rebounding rates of consumer mobility and on-trade activity returning to typical pre-pandemic levels (although a return to the 2019 high-water mark of on-trade volume consumption is not expected in the short term). Optimistic forecasts for summer travel and domestic tourism in 2022 could further boost on-trade activity, with warm summer weather, inbound tourism and social activity historically correlated to strong on-trade beverage performance in the US market.
While growth is expected in 2022, price inflation across core soft drinks categories is expected to be very high. Leading producers and US bottlers had reported significant price increases by Q4 2021, with further increases expected in 2022, substantially impacting retail selling price.
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Soft Drinks
This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.
See All of Our DefinitionsThis report originates from Passport, our Soft Drinks research and analysis database.
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