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Former NYC Mayor Bloomberg Wins the Soda Battle, for Now

Stocks in this article: KO PEP DPS SODA SBUX

NEW YORK (TheStreet) -- When was the last time you sat back with a cold one? Not a beer, but soda, or "pop" as it's referred to in the Midwestern US. According to the Beverage Digest, total sales of soda fell 3% in 2013 to 8.9 billion cases. That's the ninth straight year of decline and lowest since 1995.

One of the main reasons is because more Americans are jumping on the healthy train. No surprise here, since soda, has been linked to contributing to higher obesity levels. Just ask former NYC Mayor Mike Bloomberg, who was trying to ban the sale of large sugary drinks. One can of soda doesn't seem too harmful, but the site onecanofsoda.com states just one can contains 40 grams of sugar -- which is equivalent to about 10 packets of sugar.

Will Americans still have a thirst for soda? I agree with TheStreet's Andrew Sachais who Wednesday morning stated soda is not going anywhere. Coca Cola just launched a massive marketing deal to sponsor the 2014 FIFA World Cup in Brazil.

Plus, the next time you visit your local movie house to watch a movie, chances are you're not going to reach for a cup of tea to drink with your large buttered popcorn.

KO Chart
KO data by YCharts


What's interesting here is, you would think sales of diet soft drinks would get a boost. Not so.

Sources tell Beverage Digest, sales of diet soft drinks are struggling as consumers shy away from artificial sweeteners. The beverage industry is also flooded with more options -- especially caffeinated ones. 

Granted Coca Cola (KO), PepsiCo (PEP) and Dr Pepper Snapple (DPS) still dominate the top three spots in terms of volume, energy drinks are becoming more popular. However, the report states that sales of Monster, Red Bull and Rockstar -- which each posted stronger performance than the overall industry -- have gained or held share. Monster posted growth of 7.7% over carbonated soft drink volume growth, and Red Bull's volume was up 6.4%.

Meanwhile, more households are preparing DIY or "do it yourself" soda -- hence the popularity of SodaStream (SODA). Market research firm, NPD group found U.S. retail sales of home soda machines soared 30% last year, and sales of the accompanying products -- CO2 carbonators, bottles, mixes and syrups -- more than doubled.

However, Starbucks (SBUX) may still be holding out hope for fizzy drinks. The chain is testing out Fizzio carbonated sodas in Atlanta and Austin, Texas, in an effort to expand its offerings beyond coffee. The sodas are handmade and organic and come in flavors from lemon ale to spiced root beer. The hand-crafted touch gives them an edge over packaged brands such as Coke and Pepsi. 

Adage reported, back in October, that Starbucks trademarked the term "Fizzio," but doesn't plan to release an at-home machine anytime soon.  For now, its focus is on wine.  Restaurants will start offering wine after testing so called, "Starbucks Evenings" at select U.S. locations in an effort to drive traffic during the slower hours.



At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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