Have public-health campaigns permanently loosened the grip soda makers have on American taste buds?
We know that for the last eight years, soda consumption has been declining, but according to The Wall Street Journal, the industry’s revenues are also shrinking, and analysts are strongly hinting this could very well be the new norm.
It’s no secret that the sector has been hammered over its ties to the nation’s obesity epidemic and high-profile efforts to curb consumption, such as New York Mayor Michael Bloomberg’s push to restrict super-sized servings, which goes into effect March 12 (although the industry is suing to block the ban). Thirty states now have soda taxes in place. In response to legislation and a withering public image, soda makers have diversified their offerings to include beverages like Zico coconut water, a Coca-Cola product, and have invested in more healthful brands like Naked Juice, owned by PepsiCo.
“While Coke, Pepsi and Dr Pepper Snapple have all aggressively expanded their portfolios to include faster-growing products like sports drinks and fruit juices, a prolonged drop in U.S. soda revenues would represent a serious blow,” writes WSJ reporter Mike Esterl.
At the same time Coca-Cola has launched its controversial obesity ad, denying blame for America’s obesity epidemic, PepsiCo has been busy investing hundreds of millions of dollars marketing its soda line. That includes an estimated $50 million spent on Super Bowl advertising and inking a deal with pop-star Beyoncé—despite high-profile wailing from prominent voices like Mark Bittman and myriad health and advocacy groups.
“The trend is a dismal one for the industry, but a good one for public health,” Michael Jacobson, executive director of Center for Science in the Public Interest, tells TakePart. “The underlying thing is the increasing scientific evidence that soda promotes weight gain and obesity—that’s what all the criticisms are based on here.”
The downturn in soda sales and revenue, and the growing popularity of alternative sweeteners like stevia, are also sending ripples into the high-fructose corn syrup industry.
“The amount of corn devoted to the sweetener this year will fall to its lowest level since 1997, according to a Jan. 15 projection by the U.S. Department of Agriculture,” reports Bloomberg. A spokesperson for Archer-Daniels-Midland told Bloomberg that exports have taken up the slack in domestic sales.
But there’s no need to shed tears for the soda industry. There’s plenty of growth markets left to cultivate.
“They’re marketing overseas in countries like Brazil and China like gangbusters,” says Jacobson.
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