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Shifting drinks tastes: America swops soda for water

According to figures from Beverage Digest, in 1998 the United States averaged 204,4 litres (54 gallons) of soda consumed per person, to only 158.9 litres (42 gallons) of water. How times have changed…

The figure has shifted to 166,5 litres (44 gallons) of soda per year, and up to about 219,5 litres (58 gallons) of water.

That’s 214 litres of water annually – 590ml daily, which is 2.5 cups. So in the setting of unfounded claims that humans should be drinking eight to infinity glasses of water each day, it’s redeeming to know that most people are alive and functioning despite falling far short of that.

What kinds of water are these numbers talking about? The data doesn’t include flavoured or vitamin-enhanced waters, but includes all other kinds, though, both bottled and tap.

If you do wonder if you’re drinking enough water, the Mayo Clinic’s rule of thumb is “if you drink enough fluid so that you rarely feel thirsty and produce 1.5 litres (6.3 cups) or more of colourless or light yellow urine a day, your fluid intake is probably adequate”.

The Institute of Medicine likewise sidesteps quantified requirements and does not set a water maximum, rather suggesting “let thirst be your guide”.

A further look at America’s shifting drinking habits

A report in The Atlantic shows that over the last ten years, there has been a 20 percent increase in wine consumption, 12 percent decrease in beer, and actually a small decrease in coffee.

While it’s not the end of soda – yet – soft drinks have peaked, while bottled water, energy drinks, and a considerable amount of premium alcohol are taking their place in American’s liquid diet.

The average US citizen consumes 683 litres (180 gallons) every year, but 683 litres of what?

American drinking habits have undergone a major shift in the last decade. Throughout the 1990s, soft drinks made up nearly a third of the typical Americans’ liquid diet. But in the last ten years, they’ve cut our soda consumption by 16 percent. Meanwhile, they now drink more than 50 percent more bottled water than they did in 2001 – and twice as many energy drinks.

“Soft drinks peaked around 1998,” says Thomas Mullarkey, an analyst from Morningstar. The big winners in the last decade have been bottled waters, sports drinks, wines, and then spirits, “which have picked up a quarter of a gallon (940ml) per person in the last decade,” Mullarkey notes, adding, “that is a lot of extra alcohol”.

Two mega-trends that jump out from the data, he says, namely the swap between soft drinks and healthier alternatives like bottled water; and the swap between beer and wine/spirits.

Since total liquid consumed is a fairly zero-sum number, one sector’s gain must be another sector’s pain. “You’re seeing that the consumer is taking a healthier look and having more alternatives [than soda], such as tea, and coconut water,” he said, “but also, Americans have aged, and soft drinks are most popular among teenagers and twentysomethings.”

Older women in particular have led the increase in wine consumption.

Something beyond demographics is pushing down beer sales and lifting spirits, and it looks a lot like what’s happening to the broader economy. The middle-class brands are getting crushed, and the high-end is running away with all the income.

Cheap beers have lost market share to craft beers, Mullarkey says, since young lower-middle-class men have had the worst time during the Great Recession. Craft beer sales grew 15% last year, but the volume of mass-produced beer has declined in every year since the downturn.

Light beers are still the most popular in the country, but the shift toward craft means less beer volume consumed overall. “With cheap light beer, you might have four, five or six in a seating. But with the higher-end and more flavorful beers, one or two might do,” Mullarkey said.

America needs a stiff drink

It’s the same story for liquor, the higher the shelf, the faster the growth.

A 2012 Morningstar analysis of bourbon and whiskey found sales had tripled among super-premium brands in the 2000s, despite outright decline in “value” (ie cheap) liquor. “US consumers are increasingly purchasing pricier whiskey and bourbon,” Morningstar reports, “and super- premium products, including Crown Royal and Woodford Reserve have grown volumes at a 13% [adjusted annually] since 2002.”

Seventeen years ago, liquor consumption hit a 40-year low, so the industry tried something new. It advertised, notes The Atlantic report. Before 1996, spirit companies had a self-imposed advertising ban on radio and television.

“Drunkards were a horrible disgrace before Prohibition and hard-alcohol companies wanted to stay in the good graces of government by not advertising,” Mullarkey notes. But companies lifted their ban in 1996, and per capita liquor consumption has been growing since.

But no need to cry for the soda and beer companies. Not only are the largest beverage makers adapting to America’s new tastes by offering new products aimed at upper-middle-class customers, but also the overseas market provides a nice cushion for falling market share in the US.

Some of the same trends Americans are running away from – an unhealthy obsession with soda and cheap beer, for example – the rest of the world is running toward. Coca-Cola’s sales in India and China are growing faster than their respective GDPs. As developing economies like the BRICS and Turkey get more pocket money, their demand for beer and spirits continues to grow, and spirit-heavy countries like Russia and India will probably start drinking more beer.

For the US, it might be the beginning of the end of an era of syrupy soda and cheap light beer. But for billions of families getting a first taste of middle-class life this decade, it’s something more like the beginning.

THIS IS WHAT AMERICA DRINKS (See two graphs here)