Soda industry facing diminishing sales

The flattening sales of carbonated and other sugary drinks is giving quiet a headache to the soda soft drink production industry. After years of witnessing strong growth big players in the industry such as Pepsi and Coke will find it challenging to reverse the drop in sales.

Figure 1 showcases the expected gradual decline in the sale of carbonated sugary drinks in US

Data source: ibis world

Some of the key factors driving this change are:

1. Increasing health consciousness – People in general are moving towards maintaining a better heathier lifestyle and this trend is negatively effecting the sales of soft drinks. Healthy eating index used in the analysis below is calculated by IBISWorld as the percentage of a recommended diet that an average American consumes. The graph below highlights the diminishing sales trend in the soda industry with the rise in healthy eating index.

Figure 2 Healthy eating index vs soda revenues

2. Per capita soft drink consumption – Apart from the rise is health standards and food intake the expected increase in soft drinks prices largely due to the fluctuating oil prices will also going to adversely affect the soda sales figures in the near future.

Figure 3 Sales vs soda consumption

3. Per capita disposable income figures were also included to see their correlation with the soda sales

Figure 4

Multivariate Correlations – To see the relation between all the variables in order to further prove the effects of disposable income, soft drink consumption and health index have on the revenues of soft drinks

Scatterplot Matrix

Color Map On Correlations