United States concentrates market: Kraft Foods the leading player

Press Release   •   Jul 29, 2013 16:40 BST

Kraft Foods Inc remains the leading manufacturer in the United States concentrates market in off-trade value sales terms, accounting for 66% of sales in 2012, up from 65% in 2012. The company was able to boost its value share through its 2011 launch of Mio. Kraft carries some of the most popular household brands in the category, including Crystal Light and Kool-Aid. Given that Mio is the first product of its kind, one of Kraft?s primary tasks was to help consumers understand what the product is and how it is to be used. The company not only invested in creating comical TV advertisements, but also spent a significant amount of time determining which consumer demographic to target first, and how.

In the context of the 6% CAGR of the review period, the 11% off-trade value growth of 2012 was a substantial improvement. This jump in sales was due to the launch of Mio, which created a new liquid beverage enhancer category. Sales of concentrates had been declining, due partly to growing health and wellness awareness, as well as the threat of childhood obesity. Many of these include powder forms of juice drinks primarily consumed by children, such as Kool-Aid and Tang. Demand for these types of powder concentrates has been somewhat limited by the large quantities of sugar mixed with them, as parents seek out healthier beverages to give their children

Continued growth is projected at 19% in constant value terms over the forecast period, to reach US$1.9 billion at constant 2012 prices. Total RTD volume sales are expected to increase by 2% over the forecast period, to reach 5.2 billion litres. Liquid concentrates will drive growth in concentrates, with off-trade value sales expected to grow by 101% in the forecast period to reach US$724 million. In contrast, off-trade value sales of powder concentrates are expected to decline by 5%, to US$1.2 billion. Consumer demand for convenience, as well as for functional products with added vitamins, minerals or electrolytes, should drive further demand for liquid concentrates. At the same time, powder concentrates will decline in popularity, as many companies will seek to introduce liquid versions when possible, as Kraft Foods has done with Crystal Light Liquid in February 2013. The traditionally high-sugar powder concentrates brands targeting children will further lose their appeal.

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