War on Soda Heating Up as Soft Drink Sales on the Decline

Consumers are stepping away from the soda case at a dramatic rate, according to newly released industry data. Beverage Digest reports that overall U.S. soft drink sales fell by 1.5 percent in 2011, with carbonated beverage sales decreasing 1 percent. This is the lowest level of soft drink consumption reported since 1996 and marks the sixth consecutive year of declining soda sales in this country. The only segment of the soft drink industry that actually experienced growth in the past year was energy drinks.

The drop in soda consumption is affecting every major soft drink company. The top four soda brands, Coke, Diet Coke, Pepsi and Mountain Dew, each experienced declining sales.
Beverage Digest notes that there are several possible reasons for this reported decline in soft drink consumption, but the publication points to price increases as the number one factor driving customers to avoid the soda aisle. The average cost of carbonated soft drinks rose 3 percent in 2011. However, a recent explosion of non-carbonated drink options, including flavored waters, teas and sports drinks has also contributed to declining soft drink sales.

A growing factor influencing customers’ soda purchasing decisions is the increasing awareness among U.S. residents of the potential health risks inherent in excessive consumption of sugary soft drinks. In fact, in June, the New York City Health Board voted to ban the sale of these beverages in the city in sizes greater than 16-ounces. A more formal vote on the ban will occur on September 13, but if enacted, convenience stores and other establishments that sell popular 20-ounce sodas will face steep fines if they continue to do so.

“In New York City, nearly 60 percent of adults and nearly 40 percent of children are overweight or obese, and there are real world consequences,” said New York City Mayor Mayor Bloomberg. “People’s lives will be shorter, their quality of life is going to be dramatically reduced and obesity is going to start killing more people in this country than smoking. Obesity is the only major public health issue we have that is getting worse and New York City has the courage to stand up and do something about it.”

To many concerned about obesity in this country, and especially childhood obesity, sugary sodas have become enemy number one. However, there is some disagreement as to the specific role soft drinks play in our nation’s current obesity epidemic. In a recent interview published in USA Today, Katie Bayne, President of Sparkling Beverages for Coca-Cola argued that over the past decade, as obesity has continually risen, soft drink consumption has actually been on the decline. In addition, she also pointed out that the soft drink industry has released dozens of low-calorie and no-calorie beverage options over the past several years, showing that it acknowledges the growing obesity problem and is doing its part to fight it.

On average, U.S. consumers drank 714 eight-ounce servings of carbonated soft drinks in 2011, compared to 728 the previous year.

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