19 Feb 2014 This is Coca-Cola’s biggest nightmare
In 2013, the average American drank somewhere around 38.6 gallons of soda a year, that’s down from 42.1 gallons in 2008, according to IBIS world. Soda consumption peaked in 1998, when the average American drank about 54 gallons, according to the Associated Press.
The soda industry is certainly taking notice. Coca-Cola announced yesterday that its profit slipped last quarter due in large part to a 3 percent drop in soda sales volume in North America. And after reporting struggling soda sales last week, PepsiCo, the second largest soda producer, is facing pressure to spin off its lagging soda business and focus on its better performing snack unit, Frito-Lay, although it has recently again denied this would happen.
Americans are becoming increasingly aware that soda is bad for them, according to the IBISWorld report. Thanks to government, industry and media campaigns, we’re now constantly bombarded by messages about sugary soda’s relationship to obesity and diabetes and the possible risks of consuming diet drinks with artificial sweeteners.
“About a decade ago we saw a lot more people turning to diet soda, thinking that it’s a healthier alternative to regular soda,” said Hester Jeon, a food and beverage analyst with IBISWorld. “Really in the past five years, people have become more aware of consuming artificial sweeteners and overall soda sales are declining.”
Since 1994, 33 states have introduced taxes on soda and if former New York City Mayor Michael Bloomberg gets his way, New Yorkers won’t be able to buy large sodas anymore. These kinds of regulations can “significantly dampen” demand for soda, according to IBISWorld.
So what’s filling the void? In some cases, it’s just plain old water. But sales of healthier alternatives like ready-to-drink iced tea, sports drinks as well as flavored and sparkling water have also taken off, the IBISWorld report notes. Sales of sparkling water jumped 8.6 percent between 2009 and 2011, for example…..