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Exploring the Soda Pain Point


Earlier this week, following the Clinton Global Initiative, Coca-Cola (KO), PepsiCo (PEP) and Dr. Pepper Snapple Group collectively announced a move to reduce the ???number of beverage calories per person??? nationally by 20% by 2025. Now, that doesn???t mean the companies are altering their beverages, even though they are doing that as well, but rather that they will be selling smaller soda portions — think 10-ounce cans instead of ones containing 12 ounces — and bringing more alternative beverage products (water, juices and so on) to market.

At a time when headlines are filled with the toll of rising obesity rates and the impact not only on the population???s health, but also the rising costs associated with it, consumption of both regular and diet soda has been falling. Sales of non-diet soda have fallen by 15% since 1998, given the shift toward lower-calorie diet beverages, but more recently, sales of diet soft drinks also have started to decline. The combined effect is resulting in overall soft drink volume declines like the one evidenced in PepsiCo???s June quarter results — its North America, non-carbonated beverage volume grew 1% and carbonated soft drink volume declined 2%.

Read more about the soda pain point and its repercussions at Eagle Daily Investor.