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. /quotes/zigman/222647/quotes/nls/ko KO -3.17% , PepsiCo Inc. /quotes/zigman/238082/quotes/nls/pep PEP -2.45% and Dr Pepper Snapple Group Inc. /quotes/zigman/507521/quotes/nls/dps DPS -2.62% -- 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.
