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U.S. Soft Drinks Saw Modest Sales Growth in 2001

NEW YORK - Carbonated soft drink sales increased a mere 0.5 percent in the United States in 2001, an increase of about 54 million cases over 2000, based on preliminary statistics released today from Beverage Marketing Corporation.

Although industry volume topped 10 billion cases for the fourth straight year, per capita consumption fell for the third year in a row after several decades of unabated growth. Total volume approached 10.3 billion cases. Per capita consumption dipped to 55.4 gallons in 2001 from 55.7 gallons in 2000 and 55.9 gallons in 1999.

"Intensified competition from non-carbonated beverages - especially bottled water - has contributed to slower growth for carbonated soft drinks in the last few years," said Michael Bellas, chairman, Beverage Marketing Corp.

Diet soft drinks outpaced regular soft drinks in 2001, thanks to strong growth by Diet Pepsi, Diet Coke and Diet Dr Pepper. Diet soft drinks grew 0.7 percent, while regular soft drinks grew 0.5 percent. Flavored soft drinks, such as orange, cherry and root beer, grew faster than colas.

Pepsi-Cola Company enjoyed relatively solid growth, with volume increasing by 1.3 percent. Beverage Marketing Corp. attributes its growth to new product innovations such as Mountain Dew Code Red, lemon-flavored Pepsi Twist and its new lemon-lime, Sierra Mist. Diet Pepsi also outperformed the overall carbonated soft drink market in 2001. Pepsi-Cola's market share edged up from 30.9 percent in 2000 to 31.1 percent in 2001.

In contrast, Coca-Cola's volume dipped slightly and its share eroded from 44 percent in 2000 to 43.7 percent in 2001. Diet Coke volume increased by 1.7 percent, and newly launched Diet Coke with Lemon added 24 million cases to the company's total volume.

As in the last several years, the leading soft drink companies experienced strong growth in non-carbonated beverages - which are counted separately from soft drink sales. Pepsi's non-carb business, for example, grew by 35 percent and Coke's enlarged by 23 percent.

Of the branded soft drink companies, Dr Pepper/Seven Up Inc. (DPSU), the third largest soft drink company, saw volume slip by 0.8 percent. The maker of brands such as Dr Pepper, 7UP and A&W lost market share, which slid from 14.4 percent in 2000 to 14.2 percent in 2001. The company acquired Royal Crown in late 2000. If RC brand volume is included, DPSU's share stands slightly higher, but the contraction in volume is more pronounced on a pro forma basis. Cott Corporation, the leader in private label soft drinks, benefited from increased presence in growing distribution channels, such as mass merchandisers and club stores, and experienced a substantial 14 percent volume increase.
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