The Non-alcoholic Beverage Market in the United States: Demand Interrelationships, Dynamics, Nutrition Issues and Probability Forecast Evaluation

There are many different types of non-alcoholic beverages (NAB) available inthe United States today compared to a decade ago. Additionally, the needs of beverageconsumers have evolved over the years centering attention on functionality and healthdimensions. These trends in volume of consumption are a testament to the growth in theNAB industry.Our study pertains to ten NAB categories. We developed and employed a uniquecross-sectional and time-series data set based on Nielsen Homescan data associated withhousehold purchases of NAB from 1998 through 2003.First, we considered demographic and economic profiling of the consumption ofNAB in a two-stage model. Race, region, age and presence of children and gender ofhousehold head were the most important factors affecting the choice and level ofconsumption.Second, we used expectation-prediction success tables, calibration, resolution,the Brier score and the Yates partition of the Brier score to measure the accuracy of predictions generated from qualitative choice models used to model the purchasedecision of NAB by U.S. households. The Yates partition of the Brier scoreoutperformed all other measures.Third, we modeled demand interrelationships, dynamics and habits of NABconsumption estimating own-price, cross-price and expenditure elasticities. TheQuadratic Almost Ideal Demand System, the synthetic Barten model and the StateAdjustment Model were used. Soft drinks were substitutes and fruit juices werecomplements for most of non-alcoholic beverages. Investigation of a proposed tax onsugar-sweetened beverages revealed the importance of centering attention not only todirect effects but also to indirect effects of taxes on beverage consumption.Finally, we investigated factors affecting nutritional contributions derived fromconsumption of NAB. Also, we ascertained the impact of the USDA year 2000 DietaryGuidelines for Americans associated with the consumption of NAB. Significant factorsaffecting caloric and nutrient intake from NAB were price, employment status ofhousehold head, region, race, presence of children and the gender of household foodmanager. Furthermore, we found that USDA nutrition intervention program wassuccessful in reducing caloric and caffeine intake from consumption of NAB.The away-from-home intake of beverages and potential impacts of NABadvertising are not captured in our work. In future work, we plan to address theselimitations.