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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.
MACROECONOMIC VIEW
The Big Picture of the Market
Q4 closed out another year of strong economic growth with real GDP up +2.8% for the year and +2.3% for the quarter.
Goods and services spending accelerated at the end of the year thanks to a strong US consumer. A decline in inventories and fixed investments led to lower topline growth than the prior two quarters.
- Government spending was stable but came down from an unsustainable jump in defense spending in Q3
- A surge in demand sparked by tariff fears was a contributor to the drag from inventories and a spike in durables
Source: U.S. Bureau of Economic Analysis, Bain Macro Strategy Analysis
MACROECONOMIC VIEW
The Ups and Downs of Consumer Ratings
The fourth quarter saw a boost to sentiment and confidence as the US closed out another strong year of economic growth. At the beginning of 2025, sentiment and confidence have dropped, showing a potential reaction to the announcement of tariffs and uncertainty around labor.
Source: FRED – Bureau of Labor Statistics, Bureau of Economic Analysis
NARTD RETAIL PERFORMANCE
NARTD in Retail
Nielsen reported that Total Non-Alcoholic Ready-to-Drink (NARTD) beverages grew by 2.8% in retail sales and 0.5% in volume for the fiscal year 2024. After 11 quarters of stagnation, NARTD achieved balanced growth in Q4 2024, with a 4.6% increase between volume and price/mix. Sparkling Soft Drinks (SSD) contributed 50% of the retail dollar growth this year, while Value-Added Dairy (VAD) led with an 8.5% growth rate for the third consecutive quarter. Energy drinks also saw a 6.5% growth rate, enhancing overall growth.
Source: Nielsen Total US AMC YTD as of W/E 12/28/24. Share shown for manufacturers (does not include System Brands)
RETAIL CHANNELS
Channel Developments
All channels saw an uptick in growth in Q4, with Large Store & Club continuing to see the highest growth rates, followed by Grocery.
Source: Nielsen Total US AMC YTD as of W/E 12/28/24. Share shown for manufacturers (does not include System Brands)
CATEGORY SPOTLIGHT
Little Fish Competition
Typically, large manufacturers with more resources dominate the industry by consuming the Little Fish (smaller independent manufacturers/distributors). At first, this may appear to be true—76% of retail dollars in 2024 came from Big Fish. However, each Little Fish poses a competitive threat, capturing dollar share and commercial space.
When combined, Little Fish make up the second-largest share of the NARTD market.
The number of Little Fish brands has declined over the years, but the current Little Fish are getting fewer, bigger, and better. Little Fish are present in all categories but have seen strong growth in Sports, Energy, SSD, and Tea.¹
FOODSERVICE TRENDS
Foodservice Changes
Foodservice traffic declines in Q4 eased to about half of the Q3 drop year-over-year. While servings fell more than traffic, it minimally affected beverage sales. Single-serve drinks proved resilient with a milder decline. Deal occasions have become essential for recovery, particularly aiding quick-service restaurants (QSR) and enhancing delivery performance. The fast-casual segment grew, offsetting QSR traffic declines and attracting affluent consumers through effective digital use.
Source: Circana CREST – Excludes retail foodservice, C-Stores and Starbucks; Beverage servings views exclude tap water, alcohol, cap/esp/latte coffee, hot chocolate, hot tea, shakes/malts/floats, smoothies and QSR Juice/Smoothie channel
SHOPPER GUEST INSIGHTS
How People Plan to Shop
Q4 saw growth in households buying beverages across a variety of channels, with more trips per household and increased spend per trip driven by larger pack sizes. However, most channels also saw a decrease in the beverage units per trip—beverage is a category where 44%² of consumers say they’re willing to switch to a lower-cost brand. Over the next six months, consumers expect to shift their spend toward grocery stores and away from Away-from-Home channels, which means an opportunity for Grocery to build growth with consumers making the shift.
2024 IN REVIEW
In 2024, the economy was full of twists and turns, but overall, it showed resilience and adaptability. Consumer confidence may have started out on the lower side, with many feeling uncertain about the future, but by the end of the year, optimism had made a comeback.
When it came to shopping trends, sparkling drinks and value-added dairy were the big winners, growing steadily all year. On the flip side, foodservice saw some major shake-ups as people looked for better value, proving that shoppers are more focused than ever on making their money go further. Clean energy also showed promising growth, and if 2024 taught us anything, it’s that small independent brands shouldn’t be underestimated—they’re making waves in the market. All in all, this year reinforced that consumers are adapting, businesses are evolving, and value remains king.
Curious how it compares?
Compare this State of the Marketplace to last quarter’s!
Source: 1) Nielsen Total US AMC as of Y/E 12/28/24. 2) 84.51 Consumer Digest, Full year recap. 3) IMFA CPP Big Report.
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