Coca-Cola Co. will break ground Tuesday on a massive manufacturing and distribution facility in north Houston, bucking declining soda sales as Americans increasingly eschew sugary, fizzy drinks in favor of healthier alternatives.

The 1 million-square-foot factory rising at Beltway 8 and Interstate 45 will be the first Coca-Cola plant built in the U.S. since 2006. When it opens in 2020, the state-of-the-art plant will have five production lines pumping out cans and plastic bottles of sparkling drinks and Dasani water that will primarily serve the local market.

The $250 million plant represents a significant investment for Coca-Cola Southwest Beverages and its Monterrey, Mexico-based parent company, Arca Continental.

“We believe this is one of the single-largest investments that a Mexican company has placed in the U.S.,” said Mark Schortman, president of Coca-Cola Southwest Beverages. “It demonstrates to Houstonians that we are committed to this market.”

Coca-Cola’s new plant comes even as sales of carbonated soft drinks have fallen each year for more than a decade. Amid growing concerns about obesity and municipal soda taxes, U.S. consumers are increasingly choosing bottled water and fruit juices over Coke and Sprite.

In 2017, U.S. soda sales volume fell 1.3 percent while bottled water grew 6.2 percent, according to Beverage Digest, an industry publication. Coke and Pepsi declined by 2 percent and 4.5 percent respectively, while Poland Springs and Aquafina grew by 2.5 percent and 2.6 percent respectively.

“Bottled water took the fizz out of cola,” said Venky Shankar, director of research at Texas A&M University’s Center for Retailing Studies. “Health beverages are getting more popular.”

Coca-Cola Southwest, which started in 1902 as The Houston Coca-Cola Bottling Co. on Washington Avenue, understands that consumer preferences are changing, Schortman said. The company in recent years has started to diversify beyond its soft drink and sugary juice staples, such as Sprite and Minute Maid, into emerging brands such as SmartWater and Gold Peak Tea.

Last year, Coca-Cola renamed its diet soft drink Coke Zero to Coca-Cola Zero Sugar, tweaking the recipe but also marketing the beverage to make it more clear it contains no sugar. Sales of the rebranded soft drink shot up by 20 percent, Schortman said.

Earlier this year, Coca-Cola acquired Costa Coffee for $5 billion and took a minority stake in sports drink BodyArmor -- further expanding its beverage lines. In Houston, Coca-Cola Southwest is distributing Topo Chico, a mineral water brand produced by the Arca Continental.

Today, low- to zero-calorie beverages represent more than a third of Coca-Cola’s drink portfolio, Schortman said.

“Coca-Cola wants to be a total beverage partner,” Schortman said. “I think the company continues to stay on trend or ahead of trends.”

To be sure, there are still loyal soda aficionados, particularly among Baby Boomers in the South who grew up drinking Coke and Texas-based Dr. Pepper as a popular summer refreshment, Shankar said. Coca-Cola remains a strong brand for soft drinks both nationally and internationally, he added.

Coca-Cola Southwest’s new plant aims to serve Houston’s growing population as well as streamline the company’s local operations. When the new factory is completed in the first quarter of 2020, the company plans to close and consolidate its two existing plants and its four warehouse and distribution facilities across Houston into the new facility at Pinto Business Park.

The consolidation is expected to save the company $30 million in operating expenses over three years. Layoffs are not expected, Schortman said.

Coca-Cola Southwest tapped commercial real estate firm CBRE to market and sell the company’s facilities, including its Bissonnet plant which was considered the world’s most advanced Coca-Cola plant when it opened in 1950. Developers are interested in transforming the West University site into an urban project, but no buyers have been selected yet, Schortman said.

Coca-Cola Southwest was acquired last year by Arca Continental, one of the largest Coca-Cola bottlers in the world known for producing Topo Chico and Coke de Mexico. Coca-Cola Southwest operates 10 production plants and 40 distribution facilities in Texas, New Mexico, Oklahoma and Arkansas serving 31 million customers. The company has 8,900 employees, including more than 1,000 workers in the Houston area.

“We believe that the future is bright in Houston,” Schortman said. “We’re building this for the next 50 years.”