Sales of cola in grocery and convenience dropped by 0.2% to £1.6bn in 2014 while volume dropped by 1.6%, the first time the market leader has seen a decline.
Meanwhile, sales of water were up 12.6% to £671m, making the segment the second fastest growing of all soft drinks in 2014, while glucose and energy drinks also saw sales growth of 4.6% driven by sales of Lucozade and Red Bull.
Growth of water and energy drinks also overtook cola in on premise, though cola did grow by 2.8%.
Despite its decline, cola remained the largest category, largely thanks to Britvic and PepsiCo’s Pepsi Max no-sugar variant, which became the leading FMCG performer with £26.9m of growth according to the report.
Its success was largely driven by its YouTube marketing strategy according to the report, which it delivered through its “Unbelievable” advertising campaign, making Pepsi the biggest FMCG YouTube channel and delivering value sales growth for the brand of 8.8% over the year while sales of Coca-Cola dropped by 2.5%.
While Coca-Cola Enterprises held its position as market leading distributor, its value and volume declined 1.1% and 0.5% respectively despite the launch of its low-calorie variant Coca-Cola Life in 2014.
The news comes after drinks maker AG Barr suggested that the overall market was being driven by the water category, which had overtaken cola to become the largest single category by volume for the first time, according to the company.
“You might see cola for sale in every single outlet,” said CEO Robert White speaking on the results. “That does not necessarily mean everyone is drinking it.”
The Britvic report shows that AG Barr saw growth both in value sales and volume in 2014 (5.3% and 3.5% respectively) thanks to 20% growth in its Strathmore water brand.
The overall soft drinks category saw sales growth across both grocery and convenience (0.4% in value sales to £7.6bn) and on premise sectors (3.6% to £4.2bn) in 2014. However, volume in grocery and convenience dropped by 0.4% and rose by 0.5% on premise.
Cold hot drinks (iced coffees and teas) was the fastest growing soft drinks segment for the fifth year running, growing by 30.7% to £68m and volume by 28.5%.