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State of the Marketplace is a quarterly report, offering a comprehensive analysis of the dynamic landscape within the beverage industry. Want to learn more? Check out our State of the Marketplace article that walks through the benefits and impact.
the big picture of the market
In 2024, Q1 showed a decline that reflected the decrease in consumer and government spending. However, increases in consumer spending on services was offset by a decline in goods spending.
Consumer spending on services was led by:
- healthcare
- financial services
- insurance
Goods spending may have be been lower, but was led by:
- gasoline
- other energy goods
It is important to note that increased government spending reflected increases in compensation for state and local government employees, primarily.
A bar chart showing Quarterly Change in Real GDP (In $ Billions). The chart shows 2023 Q3, 2023 Q4, and 2023 Q1 broken into Total GDP, Consumer, Investment, Government, and Net Exports. In the Consumer category, there is an arrow showing the downward movement of Goods, and an up arrow showing the improvement of services from Q3 to Q1.
Source: U.S. Bureau of Economic Analysis
the ups and downs of consumer ratings
As consumer sentiment spiked again in Q1, consumer confidence saw a downward turn; consumer sentiment has been improving, but Consumer Confidence Index (CCI) reveals consumers may be less optimistic about the future.
Two boxes with charts displaying Consumer Sentiment and Consumer Confidence Index® (CCI). In Consumer Sentiment, it is described as “sentiment is a leading indicator, telling us about future purchase intentions.” The Consumer Sentiment line chart shows the variation from 2018-2024, showing March consumer sentiment spiked to the heightened score seen in January. In Consumer Confidence Index® (CCI), it is defined as “CCI provides a POV on future developments around Household consumption and saving based on questions about personal finances and the macro environment.” The line chart from 2018-2024 reflects the negligible change in March 2024 after a downward revision in February.
Source: FRED – Bureau of Labor Statistics, Bureau of Economic Analysis The Conference Board; NBER
NARTD in retail
Total NARTD (non-alcoholic ready-to-drink) is up 1.6% in Retail Dollars in Q1, driven by strong growth in Energy, Sparkling Soft Drinks (SSD), and Value Added Dairy (VAD).
Chart reflecting the Retail Dollars and Retail Dollars % Change vs Last Year: Coffee (Retail $1.1B, -7%), Energy (Retail $5.0B, +4%), Juice (Retail $4.5B, +0%), Sports (Retail $2.2B, -3%), SSD (Retail $10.7B, +3%), Tea (Retail $1.4B, -1%), Value Added Dairy (Retail $1.9B, +2%), Flat Water (Retail $4.2B, -1%), Sparkling Water (Retail $1.3B, +5%), All Other Categories (Retail $2.4B, +4%).
Source: NielsenIQ Total US AMC YTD as of W/E 4/6/24. Share shown for manufacturers (does not include System Brands)
Channel developments
Large Store & Club and Small Store channels continue to contribute an outsized share of growth. Convenience Retail (CR) had the slowest growth of 0.4%
Line chart showing the NARTD Value % Growth by Channel. From 2022 to Q1 2024, all channels (Mass, Value, Grocery & Convenience Retail) had slower growth, with Convenience Retail having the slowest growth (0.4%).
Source: NielsenIQ Total US AMC; NARTD Comp Set (Excludes Conventional Dairy and Bulk Water) W/E 3/30/24
Foodservice declines
Meanwhile, Foodservice traffic in Q1 was down nearly 2% vs a year ago, driven by traffic decline at major chains.
Bar chart showing Q1 Foodservice Traffic in the Past 5 Years (traffic in billions): 2019 (14.1 Billion), 2020 (12.7 Billion), 2021 (13.0 Billion), 2022 (12.4 Billion), 2023 (12.6 Billion), and 2024 (12.4 Billion, which was -1.6% vs a year ago).
Source: NPD CREST for Commercial Restaurants Only (Excludes Retail Foodservice, Excludes Starbucks); Beverages excludes alcohol, tap water, hot tea, hot chocolate, smoothies, and shakes/malts/floats
By evaluating the trends of yesterday, we
can see how they will impact today.
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