Soda Losing Its Grip on America

Consumption has dropped 44 percent since 1998.

April 2, 2014, 7:52 PM

April 2, 2014— -- An American icon is losing its grip on the nation's consumers: soda sales are on the decline.

More shoppers, such as mother of three Laura Curren, are bypassing the soda aisle altogether.

"We do not drink soda," she told ABC News. "I know that soda is not so good for my children and I do not bring it into the house and I do not let them buy it out either."

Americans drank an average of 51 gallons of soda in 1998; today we drink nearly 20 percent less -- 44 gallons, according to data from Beverage Digest, a trade publication and data service.

That downward trend, which intensified in 2013 when soda sales fell approximately 3 percent, is the largest in history and represents a major change in the way Americans refresh and hydrate.

The data from Beverage Digest shows the volume of product consumed is back to where it was in 1995.

Kendra Saad, another mother of three, said the rules have changed for her kids.

"I grew up with soda in our house," she said. "I would drink like two or three cans of coke a day. ... [But] we made it kind of a rule, we wouldn't have soda in the house."

"I think people are beginning to be more mindful about what they are eating, especially with their sugary drinks," YMCA nutritionist Kristy McCarron said. "We're realizing they are not good for our waistlines and they are not good for our energy levels. They don't tend to make us feel good in general."

But it gets worse for the soda industry. The sugarless alternatives -- diet sodas -- are losing market share even faster. They saw a 6 percent drop in sales in 2013, despite government studies that say they are safe to drink.

Barbara J. Moore, president and CEO of Shape Up America!, a nonprofit organization to raise awareness of obesity as a health issue founded by former U.S. Surgeon General C. Everett Koop, said that while she was surprised by the drop in diet soda, the overall drop in soda beverages could be attributed to policy and advertising awareness.

"I have been amazed at the number of studies that have been published over the past five years that have vilified sugar-sweetened beverages in general, and soda in particular," Moore said. "On the policy front, legislation has been introduced in California and elsewhere calling for a warning label on soda similar to the warning label on alcohol-containing beverages [regarding pregnant women] or warning labels on tobacco products. All of this is raising public awareness of the potential dangers of sugar-sweetened beverages."

Another factor, Moore said, is reports and recommendations by organizations such as the American Heart Association and the World Health Organization to reduce sugar intake.

A possible reason for the decline in consumption of diet sodas is that consumers don't seem to be convinced that Aspartame and other artificial sweeteners are safe, even though there is no scientific evidence that they cause any harm.

"I have been trying to eliminate high fructose corn syrup, so soda is the number one culprit. Once I stopped drinking sodas I began to lose weight, which reinforced my desire to drink water," Washington, D.C., resident Robert Banks said. "I thought about diet soda, but I recently heard studies that indicate artificial sweeteners aren't healthy."

"Sugar substitutes, despite safety studies that go back decades, are probably just victims of a change in consumer philosophy, at least in this country," said Keith-Thomas Ayoob, an associate clinical professorin pediatrics at Albert Einstein College of Medicine in New York City.

"Consumers are slow to change their attitudes, but they do change, and that may be what we're seeing here," he said. "There are new beverage categories now, from fancy combination juices, to enhanced waters, energy drinks, etc., that convey some sort of 'value added' quality, real or imagined. Soda can then look more mundane by comparison."

According to the report, energy drinks did see a per volume increase, with Monster going up 7.7 percent and Red Bull 6.4 percent, but their overall shares of the carbonated soft drink market is disproportionately small.

And more Americans are turning to another type of sweet, carbonated beverage, according to the AP.

Last year, a small brand called Sparkling Ice saw sales more than double to $302.4 million from the previous year, according to IRI, a Chicago-based market research firm.

While still a tiny fraction of the broader soda industry, it represents striking growth from 2009, when sales were just $2.7 million. And it's just one of the factors chipping away at the dominance of traditional sodas like Coke and Pepsi, particularly in the diet category.

The soda industry admits it was a bad year for its frontline drinks, but both Coke and Pepsi made clear their businesses are diverse and they are major players in the bottled water, sports drink, tea and coffee lines -- all of which are growing.

A spokesman for PepsiCo told ABC News: "We have a diverse, well-positioned beverage portfolio that includes leading brands in several key growth segments, including Gatorade in sports drinks, Lipton in ready-to-drink tea, and Starbucks in ready-to-drink coffee."

Fifty-four percent of PepsiCo's U.S. beverage portfolio is in non-carbonated beverages.

Coca-Cola told ABC News: "In a challenging year, we grew share in both the Sparkling and LRB categories. We are committed to the long-term growth of our portfolio and we are investing to build strong brands, create customer value and enhance our system capabilities. With increased investment, better execution and new innovation, we are committed to returning our overall sparkling business to growth in the U.S. while continuing to realize price/mix growth."

McCarron recommends getting your carbonation and sweet fixes from other sources.

"Try sparking water and adding a natural sweetener that wouldn't only satisfy your sweet tooth but keep your sugar level more stable so you don't hit that high crash at the end," she said. "This can be sparkling water with lots of fruits or adding a little bit of honey ... to give you that taste that you crave but doesn't give you the sugar rush."