Drop in Soda Sales Accelerates as Healthier Options Grow

By Christina Cheddar Berk, News Editor

NEW YORK (CNBC) --Soda sales have been declining for the past seven years, but the pace of the decline quickened in 2011 despite growth in the overall beverage market.

Americans continue to guzzle more bottled water, ready-to-drink tea and coffee, sports drinks and energy drinks, rather than sip on soda and fruit juices, according to beverage statistics released Tuesday.

The U.S. beverage market grew by 0.9% in 2011, according to preliminary data from Beverage Marketing, a research, consulting, and financial-services firm that tracks the beverage industry. Although this marked the second year of growth for the beverage industry, after two consecutive declines in 2008 and 2009, the pace of growth slowed from 2010.

More from CNBC Donald Trump...The Fragrance Krispy Kreme Moves Into Coffee as Others Move on 'Now Is the Time' to Retire: McDonald's CEO

Beverage Marketing said sales were hurt by higher prices, which made the drinks more difficult for struggling lower-income consumers to afford.

Beverage Digest, an industry newsletter that also issued industry sales data Tuesday, estimates carbonated soft drink prices were up about 3% last year, as companies passed on the higher cost of sweeteners, such as corn syrup and other raw materials, to consumers.

All of the big three beverage companies Coca-Cola (KO) PepsiCo (PEP) and Dr Pepper Snapple (DPS) old lower volumes in the U.S., as sales of leading brands such as Coke, Diet Coke, Pepsi-Cola, and Mt. Dew fell, according to Beverage Digest.

Both Coke and Pepsi saw their market shares shrink, while Dr Pepper's share was flat, the newsletter said. Sales of Dr Pepper's flagship brand rose 0.5% last year, a good showing, but not nearly as good as Fanta, the ninth largest soda brand, which saw sales volume climb 3%. Fanta's growth was enough to unseat Diet Dr Pepper from the top 10.

While Fanta's growth was impressive, the fastest-growing beverage brand was Dasani, a bottled water sold by Coca-Cola. Dasani's volume rose 11%, according to Beverage Digest. It was followed by Arizona iced tea, which grew 9.3%, and Pepsi's Gatorade, which rose 8%.

To put this in perspective, carbonated soft drink sales grew about 3% annually in the U.S. for much of the '90s. The category has been declining since 2005, however, as increasingly health-conscious consumers turn to other beverages perceived to be more healthful.

1 2 Next › Last »