By Paul Ziobro
Soda sold in glass bottles, a package phased out of everyday use
over the last several decades, is providing a rare spot of growth
in a declining soft-drink industry.
Over the past two years, sales growth by soda in glass bottles
has outpaced that of soda in the much more common plastic bottles
and aluminum cans, according to Nielsen, whose data includes
supermarkets, big-box stores and other outlets, but excludes sales
from other sources, like Costco Wholesale Corp. (COST) and
convenience stores.
The trend comes as soda companies--including the top three
players of Coca-Cola Co. (KO), PepsiCo Inc. (PEP) and Dr Pepper
Snapple Group Inc. (DPS)--in recent years have recognized the need
for a broader selection in the packages, sizes and prices they sell
soda to try to attract more consumers to a category that has sold
less product in each of the past eight years.
Glass was the original portable packaging option during soda's
early days in the late 1800s, but metal and aluminum cans started
to gain traction in the 1960s, followed by plastic bottles in the
late 1970s. Beverage Digest Publisher John Sicher said that
Coca-Cola's introduction of a 20-ounce plastic version of its
iconic contoured bottle helped push aside glass as a major
soft-drink package.
Today, glass bottles contain just 2% of the $21.2 billion in
soft-drink sales tracked by Nielsen, so soda makers are hardly
counting on glass to fix the soda industry's major challenges, like
consumers avoiding the drinks due to their high sugar content and
threats of more political regulation. But glass bottles do serve a
strategic purpose. Executives say they hold unique appeal to key
demographic groups like millennials, baby-boomers and Hispanics.
And glass bottles are sold for a premium compared with other
packages, providing a boost to profits.
For the 52 weeks ended April 13, sales of soda in glass bottles
rose 2.6%, while plastic bottles fell 0.8% and aluminum cans fell
1.9%, according to Nielsen. Overall, soda sales fell 1.4% during
the period. In the year prior to that, all three formats were up,
though a 4.5% gain in glass bottle sales was well ahead of the 2.5%
increase in plastic and 1.4% increase in cans.
PepsiCo is playing from behind in the glass game, without a
"concerted effort" at retail for at least seven years, said Simon
Lowden, chief marketing officer of PepsiCo's North America beverage
business. This year, PepsiCo is conducting a national rollout of
12-ounce glass bottles, designed with a distinct swirled base, of
its namesake cola and Mountain Dew, both which are sweetened with
sugar instead of high-fructose corn syrup that's used primarily in
the U.S. The products are available in nearly a third of the U.S.
right now.
Mr. Lowden says that nostalgia makes it an appealing factor for
older consumers, while younger shoppers see the glass bottles as
having a cool factor. Among those demographics, one-third said that
glass bottles would make them buy more soda.
"I couldn't imagine two more different lifestyle extremes," he
said in a recent interview. "It's very appealing and different to
both cohorts."
The glass bottles are part of number of new packages being
offered by PepsiCo. The company also is offering variety packs that
combine cans of its namesake cola and Mountain Dew, among other
flavors, and also recently launched an aluminum wide-mouth bottle
for Mountain Dew.
PepsiCo's glass bottles are the premium offering of its new
options. At $3.99 for a four-pack, PepsiCo's glass bottles are
priced nearly four times higher on a per-ounce basis than a 12-pack
of cans, which sold for an average of $3.50 last year, according to
trade publication Beverage Digest.
Coca-Cola's image is much more intertwined with glass than
PepsiCo's is, having been consistently offered in its patented
bottle shape that was introduced in 1915. Several years ago,
Coca-Cola began to focus on having a broader selection of packages
and sizes, an effort that included increasing the availability of
its glass bottle.
"The Coca-Cola glass contour bottle is part of our brand's DNA
and has been for decades," Coca-Cola spokeswoman Susan Stribling
said.
PepsiCo, like Coca-Cola, has been available in glass bottles in
the U.S. as an import from Mexico, but PepsiCo is making a move to
have its own mainstream package with broader distribution, much
like Coca-Cola has done.
Dr Pepper only offers a few of its brands in glass, including
its namesake soda, Crush and Stewart's root beer. In addition to
being a premium play, Dr Pepper sees glass as attracting Hispanics,
since soda is sold widely in glass bottles in Latin American
countries like Mexico, a spokesman said.
Write to Paul Ziobro at paul.ziobro@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires