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Coca-Cola, PepsiCo see soda declines continue

NEW YORK — It seems that not even Beyonce or new, lower-calorie options can persuade Americans to drink more soda.

Coca-Cola Co., PepsiCo and Dr Pepper Snapple Group all sold less soda in the second quarter in North America, dashing hopes for the moment that splashy new marketing and different sweetener mixes could get drinkers back.

Coca-Cola said it sold 4 percent less soda in North America, while PepsiCo simply said that its decline for the region was in the "mid-single digits." Dr Pepper sold 3 percent less of its fizzy drinks.

Coca-Cola blamed the sluggish sales on a cold, wet spring, but the declines continue a yearslong trend. According to the industry tracker Beverage Digest, per capita soda consumption in the Unites States has been slipping steadily since 1998 amid concerns that sugary drinks fuel weight gain.

Another problem is that people now have so many more choices when it comes to drinks. An endless array of bottled waters, teas of many colors, even energy shots and "relaxation" drinks are vying for the attention of the thirsty, with store coolers getting more crowded all the time.

The trend "won't change and will probably get worse without a major breakthrough in new sweeteners," said John Sicher, editor and publisher of Beverage Digest.

PepsiCo's decline for the quarter came despite its stepped-up marketing over the past year: The company signed pop star Beyonce to star in its ads and signed a multiyear deal to sponsor the Super Bowl halftime show. The company also introduced a mid-calorie soda called Pepsi Next to win back people who have quit soda because they don't like the calories in regular soda or the taste of diet.

Dr Pepper has also introduced a lineup of 10-calorie sodas, starting with Dr Pepper Ten. The idea is that they have just enough high-fructose corn syrup to taste better than diet. But the new drinks apparently aren't persuading enough people to pick up soda again.

Coke has even tackled the issue of obesity head-on in TV commercials, hoping to convince people that physical activity can let them enjoy some guilt-free refreshment.

To make up for the declines in the meantime, the industry is relying on bottled waters, teas, sports drinks and other beverages to boost sales. Companies are also looking overseas to emerging markets, where middle-class populations are growing and there's a greater potential to sell them more drinks.

Pepsi profits up

Despite a modest percent decline in North American soft drink volume, PepsiCo reported a better-than-expected quarterly profit of $2.01 billion on Wednesday, up from $1.49 billion a year earlier. The company said its mixed portfolio played a role, underscoring its resistance to splitting up its drinks and snacks businesses. Besides soft drinks, the company makes Gatorade, Tropicana, Quaker and Frito-Lay chips.



Coca-Cola

said it sold 4 percent less soda in North America in the second quarter.

PepsiCo

said its decline for the region was in the "mid-single digits."

Dr Pepper

sold 3 percent less of its fizzy drinks.

Coca-Cola, PepsiCo see soda declines continue 07/24/13 [Last modified: Wednesday, July 24, 2013 10:19pm]
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