US beverage production is forecast to reach 48.4 billion gallons in 2021. Increasing population and disposable personal income levels will help drive volume gains as consumers purchase more beverages. Rising output of drinks in categories such as bottled water and alcoholic beverages will offset declines in carbonated soft drink (CSD) production.
CSDs Suffer from an Unhealthy Perception
Production of CSDs, the largest beverage product segment in 2016, is expected to lag output of bottled water by 2021. Maturity of the CSD market, along with concerns about the sugar content and artificial ingredients in CSDs, will continue to weigh on demand, hampering production through the forecast period. Alternatives such as bottled water and ready-to-drink (RTD) tea will represent major competition for CSDs, as they possess a reputation for being healthier beverages. However, some niche versions of CSDs will experience vigorous sales growth, softening declines. For example, the popularity of “craft soda”, which covers brands with small production volumes – such as sodas made by the expanding Appalachian Brewing Company – is expected to continue. Such beverages enjoy a premium image, as they are often packaged in glass bottles. They may also tout more natural ingredients such as cane sugar, rather than the artificial sweeteners that many large CSD brands use in standard formulations.
Bottled Water Picks up Sales from Other Categories with its “Free-From” Standing
Meanwhile, bottled water is expected to be the fastest-growing product segment through 2021 and will surpass CSDs as the largest beverage segment. Water is free from ingredients like sweeteners and dyes and is seen as a healthy RTD beverage. Additionally, bottled water is perceived as a purer and better-tasting alternative to tap water, often utilizing images of untouched natural resources such as springs, glaciers, and mountains on product packaging.
Want to Learn More?
For in-depth analysis of beverage trends, see Beverages: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group.
This report contains historical data and analysis of packaged beverage production in gallons and shipments in nominal US dollars from 2006-2016, along with projections to 2021. Production is segmented by product as follows:
- bottled water
- alcoholic beverages
- fruit beverages
- sports beverages
- other RTD beverages.
While you’re there, you can check out related reports such as Restaurants & Foodservice: United States and Beer: United States.
About the Author
Cara Brosius is a Research Analyst with Freedonia Focus Reports. She holds a degree in economics, and her experience as an analyst covers multiple industries.