Soda Makers Scramble to Fill Void as Sales Drop

In much the same way their ancestors on the prairie had to check their guns at the door of the saloon, the 320 students in the Faulkton Area School District in tiny Faulkton, S.D., will be required to dispose of all carbonated soda containers before stepping into school buildings.

Rufina Cowboy removes weeds in the community garden near her home in Cuba, N.M. With her doctor’s help, Ms. Cowboy realized that sugar from soda was contributing to her weight gain, and she now drinks mostly water.

Drinking Less Soda

Kyle Ortmeier, a junior, and Joel Price, superintendent of a South Dakota school district that banned sugary soft drinks.

“We’re not trying to be the pop police or anything, but we felt like we were sending a mixed message by having a healthy lunch program and yet letting everyone walk around with sodas with a bunch of sugar in them,” said Joel Price, superintendent of the district.

Although schools have been removing sodas and other sugary drinks from vending machines for the last few years, the Faulkton district is one of the first in the country to institute a ban, according to the Alliance for a Healthier Generation, which works to reduce childhood obesity.

The school cafeteria will serve water, low-fat milk and fruit juices, and those beverages, as well as sports drinks and noncaffeinated diet sodas sold in vending machines, are all that will be available on school property. “Sure, there will be some opposition to it, but this is the way things are changing, like it or not,” said Kyle Ortmeier, the 17-year-old behind the school’s wellness campaign.

Cold, bubbly, sweet soda, long the American Champagne, is becoming product non grata in more places these days. Schools are removing sugary soft drinks from vending machines at a faster pace, and local governments from San Antonio to Boston are stepping up efforts to take them out of public facilities as the nation’s concerns about obesity and its costs grow.

Last year, the average American drank slightly under two sodas a day, a drop in per capita consumption of about 16 percent since the peak in 1998, according to Beverage Digest, a trade publication.

What began as a slow decline accelerated in the middle of the last decade and now threatens some of the best-known brands in the business. Coke and Pepsi are relying more than ever on the “flat” drinks and bottled waters in their portfolios and on increases in the price of sodas, forcing die-hard drinkers to pay more to feed their sugar habits.

“The question is, Are we seeing a modest, multiyear decline that will bottom out? Or are we seeing the beginning of a paradigm shift away from carbonated soft drinks?” said John Sicher, publisher of Beverage Digest and a longtime observer of the industry. “I don’t think anyone knows yet, but I think there are continuing headwinds against the category that aren’t abating.”

Health advocates are cautiously optimistic about the decline. “It is really important because sugary soft drinks are the No. 1 source of calories in our diets,” said Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest. “We get more calories from sodas and sugary drinks than any other individual food — cake, cookies, pizza, anything.”

But Ms. Wootan and others are worried about what may be taking the place of carbonated soft drinks in the American diet. They note the increasing appetite for energy drinks, loaded with sugar as well as caffeine, and noncarbonated sports drinks, which may have as much sugar as sodas.

“This is the next stage of where battle lines being drawn,” said Dr. Harold Goldstein, executive director of the California Center for Public Health Advocacy, who often totes around a jar filled with two and a third cups of sugar, the amount consumed by drinking a soda every day for one week. “Beverage companies are putting more and more emphasis on selling fortified beverages, as if fortified means healthier when in fact it often means more salt added to sugar.”

Not surprisingly, the country’s largest soda companies insist their carbonated soft drinks business will still grow, if not at as fast a clip as it has historically. “This is not a zero-sum game,” said Sandy Douglas, president of Coca-Cola North America.

But even they concede that unless the industry stumbles upon what it calls the holy grail, an all-natural sweetener with no calories, the future is going to be more firmly anchored in noncarbonated drinks. “The health and wellness trend is huge, permanent and important,” Mr. Douglas said. “My crystal ball says that a smart beverage company will sell a variety of products, and some of them will have bubbles and some of them won’t.”

Coca-Cola and its competitors have spent the last two decades decreasing their reliance on carbonated soft drinks anyway.

For most of its history, for instance, PepsiCo sold Pepsi. It bought Mountain Dew in 1964 and 20 years later, introduced a soda called Slice. It bought the international rights to 7Up and added Mug Root Beer to its lineup in 1986.

This article has been revised to reflect the following correction:

Correction: May 18, 2012


An article on Wednesday about the declining sales of sugary, carbonated soft drinks referred imprecisely to PepsiCo’s ownership of 7Up. While the company owns the brand outside the United States, it does not own all of 7Up. (In the United States, the brand is owned by the Dr Pepper Snapple Group.)

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