Soda consumption in the United States fell to a 31-year low in 2016, according to Beverage-Digest. That decline can mainly be attributed to waning demand among health-conscious consumers.
Here’s how much each drink category grew between 2015 and 2016, according to the Beverage Marketing Corporation.
The theme is easy to spot: Lower-calorie products like value-added water (sparkling, flavored, and “enhanced” waters), bottled water, coffee and tea are attracting more shoppers. Higher-calorie products, like sugary sodas and fruit beverages, are fading.
That would seem like terrible news for Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP), but both companies have been diversifying away from sodas with bottled water, teas, sports drinks, and other higher-growth beverages.
Coca-Cola has exposure to the energy drink market through a large stake in Monster Beverage, and PepsiCo is well-diversified in packaged foods with Quaker and Frito-Lay products. The soda market will likely remain challenging, but shrewd companies will roll with the punches and change up their product mix.
Sources: Motley Fool