Per Capita Soft-Drink Consumption

IBISWorld

It’s not hard to understand Diet Coke’s imploding popularity: The diet beverage is suffering both as a diet product and as a beverage.

A growing consumer focus on health has clearly dented soda’s dominion. Beyond widespread concerns of the dangers of artificial sweeteners, government research has found that daily drinkers of diet soda are at higher risk for strokes and other “vascular events.” While Diet Coke’s new can designs are tall and slender—a possible reference to the body type a diet-beverage drinker seeks—more of them simply don’t trust any kind of soda to be a part of a healthy diet. Between 2000 and 2015, switching from sodas to other beverages saved the country an estimated 64 trillion calories in total—that works out to 71 fewer calories per day, per drinker.

At the same time that academics have questioned the health effects of soda, the U.S. has undergone a profound change in its taste for liquids, in three major ways.

First, bottled water has transformed from an ecologically dubious ordinary consumer product to an ecologically dubious economic juggernaut. Since 2000, bottled-water consumption has tripled. In 2016, the volume of it consumed surpassed that of soda in the United States for the first time ever, according to data from the Beverage Marketing Corporation (BMC). Meanwhile, related categories such as flavored water and flavored seltzer water have grown even faster, albeit from a much smaller base. Sales of so-called “value-added” water, like Coca-Cola’s vitaminwater, have grown by nearly 3,000 percent since the turn of the century, according to BMC. The flavored-seltzer market is growing by more than 10 percent annually, with the top five brands—Sparkling Ice, LaCroix, Perrier, San Pellegrino, and Polar—now accounting for $1.2 billion in yearly sales.

Second, whereas many Americans once turned to Diet Coke to power their afternoons, these days the market for energy-giving beverages is crowded. At the peak of Diet Coke craze, in the early 2000s, soft drinks outsold coffee by a three-to-one margin in the U.S. But thanks to rising coffee consumption (and coffee’s high price, relative to soda), the U.S. coffee industry is on track to surpass domestic soda sales sometime in the early 2020s. Meanwhile, sales of energy drinks in the U.S. have grown by more than 5,000 percent this century, according to analysis from the BMC.

Finally, while Diet Coke is still one of the most popular sodas in the country, it’s losing market share to more-flavorful beverages. Many drinkers prefer the richer taste of classic Coca-Cola, which is still growing worldwide. Sales of Sprite and Fanta are also rising in the U.S., according to Coca-Cola’s financial reports. Research has shown that black cans and avoiding the word diet in beverage titles lures male consumers; indeed, the black-bottled Coca-Cola Zero Sugar is growing at Diet Coke’s expense.