Growth in Soft-Drink Industry Goes a Little Flat in ’91

Growth in the soft-drink industry slowed last year, but Coca-Cola’s lead over second-place Pepsi widened, two closely followed reports on the industry said Monday.

The recession and price discounting were cited for the slower overall growth rate, while Coca-Cola’s gains reflected its capture of two major fast-food restaurant accounts from Pepsi in 1990.

Both reports also detected a slowdown in growth of the diet segment’s share of the soft-drink business.

The trade newsletter Beverage Digest said industrywide sales rose 1.8% to a record $47 billion at the retail level in 1991, compared to a 2.8% increase the previous year.

A separate report from John C. Maxwell Jr., a soft-drink industry analyst for the investment firm Wheat First Butcher & Singer, said that industry sales volume rose 1.6% last year, compared to 3% in 1990.

That is the slowest growth rate since 0.5% in 1975, according to Maxwell’s figures.

“When you have a real bad economy, people turn on the tap water. It’s free,” Maxwell said in a telephone interview from Richmond, Va.

Beverage Digest Publisher Jesse Meyers said the recession has pinched the budgets of many consumers.

He said that is evident in the increased market share for private-label soft drinks, such as store brands, which are often sold at lower prices than national brands.

Meyers said private-label brands captured 8% of the market last year, up nearly a full percentage point in three years.

Both reports said Coca-Cola’s lead over Pepsi in market share increased for the year, mainly because of Pepsi-Cola Co.’s loss of its Burger King and Wendy’s fast-food restaurant business to Coca-Cola Co. in 1990.

Beverage Digest said Coca-Cola Classic remained the best-selling individual brand, with 20% of the market, in 1991, unchanged from a year ago. Pepsi’s share fell to 18.4%, down from 18.8% the previous year.

The fastest-growing soft-drink brand last year was Dr Pepper, which upped its share of industry sales by 0.6% to 5.5%, Beverage Digest said.

Dr Pepper came in fifth among the soft-drink brands, trailing Coca-Cola Classic, Pepsi and their diet versions. Diet Coke came in third, with 9.3% of the market in 1991, while Diet Pepsi was fourth.