Consumers Pulling Back on Soda, Alcohol Purchases

Posted on April 9, 2010

Bad news for beverage makers: a new report says that consumers plan on either cutting back or staying the same when it comes to purchasing soft drinks and alcohol in the year ahead. Hardly any customers planned on increasing their soda pop or booze budgets.

Most consumers plan to drink about the same amount or less this year, costing beverage companies about $8 billion in sales, according to a study release on Friday.

About 74 percent of consumers surveyed said they planned to spend the same or less on soft drinks, according to the study by the business advisory firm AlixPartners. For carbonated sodas, about 25 percent planned to spend less, while only 18 percent said they planned to spend more.

When it comes to alcoholic drinks, the study conducted in February found that 89 percent plan to spend the same or less. These patterns could further add to the struggle of beverage giants Coca-Cola Co and PepsiCo, which have both grappled with weak soft drink sales in North America, as well as global beer, wine and spirits players.

Analysts are sounding the alarm for global beverage companies, which aren't prepared for a nation that suddenly starts cutting back on alcohol and soda pop. But many families are cutting those kinds of drinks from the grocery list, because of budgetary restraints. And those that don't have financial problems are cutting back for health reasons. Healthy drinks are one of the few growth areas in the industry.