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A Foolish Take: American Soda Consumption Plunges to a 31-Year Low

By Leo Sun – Jul 24, 2017 at 12:00PM

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Niche beverage categories continue to grow at a faster rate.

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.

Beverage shipments growth in the U.S., 2015-2016.

Data source: BMC. Chart by author.

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 (KO -1.25%) and PepsiCo (PEP -0.04%), 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.

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Leo Sun has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Monster Beverage and PepsiCo. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Coca-Cola Company Stock Quote
The Coca-Cola Company
KO
$57.87 (-1.25%) $0.73
Pepsico, Inc. Stock Quote
Pepsico, Inc.
PEP
$168.45 (-0.04%) $0.07

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