Sweet success

Americans are cutting back on sugar—but seemingly only when it’s in liquid form

April 25, 2013
Obsession
How We Buy
April 25, 2013

Americans are becoming more health-conscious, and so it’s not surprising that Coca-Cola and Pepsi last week both reported a drop in sales volume in sodas for North America. But chocolate-maker Hershey today reported an increase in sales for the first quarter this year. The results show sugar is still very much a part of the American diet.

Hershey said it gained market share in its core brands like Hershey’s, Reese’s and Ice Breakers. Its candy, mint and gum unit (helpfully dubbed CMG), was up by 8.6% in its key US retail category. Cookies also performed well for other companies.

Snacks maker Mondelez International, which was separated from Kraft Foods in 2012, posted a decrease in overall net revenues for 2012, but in North America they increased by 1%. That was partly due to a 6.4% growth in Mondelez’s “Power Brands,” which include Chips Ahoy!, Oreo and Honey Maid graham crackers.

Americans also love their salt. Pepsi’s Frito Lay North America division reported an increase in market share. That unit makes Lay’s potato chips, Doritos and Cheetos.

Unfortunately for Pepsi and Coke, soda seems to be the one category where Americans are trying to cut back. The Dr Pepper Snapple Group, which includes brands like 7Up, Schweppes and Sunkist, yesterday similarly reported a 2% drop in sales volume.

Luckily for soda makers, not everyone in the world is as worried about sugar, especially in the emerging markets. For example, Pepsi posted 6% revenue growth in Mexico, an 8% increase in Turkey and 12% bump in Brazil. Hershey’s too is looking to spread its candy goodness: It is introducing Kit Kat minis, Hershey’s Kisses Deluxe and Hershey’s solid chocolate products in China, while the Hershey’s Mais wafter will debut in Brazil this year.

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