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Home / Business

Has America fallen out of love with diet soda?

Washington Post
24 Mar, 2015 01:00 AM5 mins to read

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Sales of low calorie soft drinks in the United States have tumbled by almost 20 percent over the past five years. Photo: Nicola Topping.

Sales of low calorie soft drinks in the United States have tumbled by almost 20 percent over the past five years. Photo: Nicola Topping.

Towards the end of the 1990s, more than a decade and a half after Diet Coke was first introduced, Coca-Cola found itself in a rut.

The soda maker's best-selling low calorie drink, popular as it had become, appeared to be topping out in reach.

The same was true of cola's arch-rival Diet Pepsi, as well as the rest of the lighter soda business.

"Sales of diet soft drinks remain as sluggish as overeaters after Thanksgiving dinner," The New York Times wrote in the spring of 1997.

Reports of diet soda's demise were premature at the time.

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In the decade that followed, diet sodas grew by more than 30 per cent.

In 2009, sales pushed above $8.5 billion for the first time.

But America's thirst for Diet Coke and its kin is running dry again - and this time it could be for good.

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Sales of low calorie soft drinks in the United States have tumbled by almost 20 per cent over the past five years, according to data from market research firm Euromonitor.

This year, diet soda sales are on pace to drop another 5 per cent.

By 2019, they are projected to have fallen off by roughly a third since their peak in 2009.

Some of the biggest brands are also some of the biggest losers in America.

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Diet Coke, which is the third best-selling soda in the United States, has seen its sales fall off by 15 per cent in the past two years, and almost a third since 2005.

Sales of Diet Pepsi, the second largest low calorie brand, meanwhile, have plummeted by roughly 35 per cent.

Other less popular carbonated low calorie drinks are suffering, too.

Americans buy 25 per cent less Diet Dr. Pepper and 33 per cent less Diet 7-Up than they did eight years back.

Even Coca-Cola Zero, which grew furiously after it's launch in the early 2000s, has seen sales slow to a halt in recent years.

Last year, the brand contracted for the first time, according to Eurmonitor.

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The diet soda slowdown isn't merely an American thing - it's also happening worldwide.

Globally, regular Coca-Cola and Pepsi are growing, albeit slowly, while their diet counterparts are shrinking pretty quickly.

Sales of each were down almost 20 per cent in the decade ended last year, according to Euromonitor.

But the future of diet colas is particularly cloudy in the United States.

Low calorie sodas are fighting an uphill battled against not one but two trends among American consumers.

The first is that overall soda consumption has been on the decline since before 2000.

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Diet sodas, though they might come sugar- and calorie-free, are still sodas, something Americans are proving less and less interested in drinking.

The second, and perhaps more significant trend, is a growing mistrust of artificial sweeteners.

"Consumer's attitudes towards sweeteners have really changed," said Howard Telford, an industry analyst with Euromonitor.

There's a very negative perception about artificial sweeteners. The industry is still trying to get its head around this.

Euromonitor industry analyst Howard Telford.

Food and beverage companies, in hopes of quelling growing fears about sugar intake, have invested heavily in sugar substitutes like aspartame.

But consumers are proving just as worried about the alternatives as they are about sugar.

Studies are abound that show people are becoming more - not less - wary of sweeteners that aren't straight sucrose.

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And perhaps with good reason - diet soda consumption has recently been linked to the development of belly fat.

In response, the American Beverage Association has worked tirelessly to remind people that fears of aspartame and other sugar substitutes are overblown.

Low-calorie sweeteners are some of the most studied and reviewed ingredients in the food supply today.

statement from the American Beverage Association.

"They are safe and an effective tool in weight loss and weight management, according to decades of scientific research and regulatory agencies around the globe," the group said in a 2013 statement.

Neither Coca-Cola nor Pepsi responded immediately to requests for comment about this story.

Still, the doubts have fed a decline in diet drinks.

"We are seeing a fundamental shift in consumer habits and behaviours,'' PepsiCo Inc. Chairman Indra Nooyi told investors in 2013.

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Two years later, that shift has only deepened, furthering the need for the industry to reinvent itself.

Soda, once marketed as an everyday staple, is now seen as an occasional treat, especially among younger demographics.

More than a third of consumers aged 18 to 36 years old consider the drink a treat, according to market research firm Mintel.

And that puts soda's diet counterparts, who are decidedly not indulgent, in an odd place.

If people are going to treat themselves to a soda every once in a while, why opt for anything other than the original?

"People want the real thing," said Telford, who points to the success of Mexican Coke, which is made with cane sugar and has developed a cult following in the United States.

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