In recent years, one of the largest problems facing Inside Value selection Coca-Cola (NYSE:KO) and rival PepsiCo (NYSE:PEP) was the declining sale of carbonated beverages. Consumers were instead purchasing bottled water, juice, and energy drinks from Red Bull, Hansen Natural (NASDAQ:HANS), and others.
Coca-Cola made some progress by launching Dasani bottled water, as well as energy drinks of its own. Still, sales of carbonated beverages have continued to decline -- and my own drinking habits are part of the problem. I have to admit I used to go through plenty of soft drinks each day without thinking anything of it. But for the past 10 years, I've limited myself to one soda a day at most -- largely because of the sugar. I've always liked soda, but it's a huge source of calories, and I've never been able to tolerate diet soda. Instead, I now drink a lot more water.
My habits, however, are changing. Coca-Cola Zero initially had me loosening my one-soda-a-day limit, because it didn't have the aftertaste most diet sodas have, and I'd still be avoiding calories. Now, Coca-Cola's recently launched Diet Coke Plus has me easily drinking two sodas a day again. Diet Coke Plus doesn't taste quite the same as Coke, but it doesn't taste like Diet Coke either, and it even has some nominal nutritional value in the vitamins and minerals. Plus, it still has the caffeine I need to plow through a day of analyzing financials and reading annual reports.
Carbonated beverage sales may still continue to decline, but with Zero and Diet Coke Plus, I have a feeling the rate of decline will slow. If I'm right, it's a small but important development for Coca-Cola.
Nathan Parmelee has no financial interest in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.
