In a truly odd turn of events… The continuing rise in coffee prices – and attendant drop in sales – has resulted in an economic-sphere demonstration of Newton’s Third Law of Motion: Diet Soda/Soft Drink sales are up by about the same amount as coffee is down…
But the phenomenon is not restricted to rising coffee prices. Salty snacks sales are also down – largely due to rising prices, not to mention mounting consumer backlash over creeping shrinkflation which resulted in a fan revolt against Lay’s brand products…
Parallel dynamics
The ‘opposite reaction’ is that soda/soft drink sales are up. And the numbers are dramatic.
CNN reports total soda sales for the third quarter of this year were up a modest 1.3 percent over the same period last year. But sales of Coke Zero Sugar were up by 11 percent. And that’s roughly repre-sentative of the rise in sales across the diet soda spectrum over roughly the same period.
The fact is, regular, sugar-sweetened soda sales are flat (excuse the unintended effervescence-related pun). And that, too, is an indication of dramatic changes in consumer behaviour toward snacks. Changes not related to prices and inflation.
A perfect storm?
But the ‘Third Law’ phenomenon is not restricted to rising coffee prices.
Salty snacks sales are also down – largely due to rising prices, not to mention consumer backlash over creeping shrinkflation which resulted in a fan revolt against Lay’s brand products. The average price of 16 oz. (jumbo bag) of potato chips this past September was (US)$6.46, while a 2-liter soft drink was (US)$2.00, according to the Bureau of Labor Statistics.
It also appears cash-strapped consumers are moving away from alternatives such as so-called ‘ener-gy’ drinks for their daily caffeine fixes. “Middle and lower-income consumers that are [traditonally] frequent users of energy drinks are [also] moving into soft drinks,” says Duane Stanford, the editor of Beverage Digest, a trade publication.
Soda sector upheaval
You might not insider it so important. But it’s big news in the Soda industry. Dr. Pepper – for the first time since the famous three-way rivalry began – recently eclipsed Pepsi ascending to second place in the overall Cola niche, behind perennial leader Coke.
And that has beverage industry movers and shakers wondering what might happen next…
A common thread…
A common, prevailing wind blows through the current atmosphere of turbulence in the snack world. It’s the funadmentally addictive nature of the products. Food scientists have relatively recently proven that sugar, salt, fat – and caffeine – all activate the addiction centres of the brain in exactly the same way nicotine, cocaine heroin and other ‘drugs’ do.
So… The snack and soda folks are actually in a wider fight for shrinking consumer dollars than they were prior to the COVID Era inflation spike. The competition now extends deep into the mysterious, manipulative, cutthroat processed food territory. There, soda and chip makers are encountering breakfast- and energy-bar vendors, cereal makers, and a host of other competitors they’ve never had to face off with before.
My take
For now, the soda industry – the diet niche in particular – is in an enviable position among its vast array of competitors. But with all the myriad variables in play in this churning industry… Nobody can reliably guess what might happen next!
The key to understanding it all may well be identifying the ‘equal and opposite reaction’ to the next big, forceful snack market event!
~ Maggie J.