Nearly ten years ago, soda seemed to be losing its appeal with consumers as public health campaigns warned against sugary soft drinks and schools took soda out of vending machines and off of lunch menus. After per-capita consumption of soda among Americans fell to a new low in 2015, Coca-Cola and Pepsi started expanding their product lines to include diet sodas, flavored water, and energy drinks. With so many healthy choices available, industry insiders began to assume that consumers who left full-sugar soda behind would never go back.

That may be starting to change, though, as soda sales this quarter rose for the first time in almost a decade. The increase isn’t very big — just 1.3 percent in total volume— but it points to a significant shift in a long time trend. “This is so different than five, ten years ago,” said analyst Robert Ottenstein. “There’s been a huge change in attitude. These products were declining 4 percent a year for a long time.” The change is most notable for Dr. Pepper, which rode the flavored soda trend to surpass Pepsi as the second-most popular soft drink in America.

The number one factor pushing demand for soda is its low cost, especially compared to pricier options like energy drinks and coffee. Some consumers are also becoming skeptical about the health claims made by diet soda brands. Last year, health authorities said it is possible that aspartame, a popular artificial sweetener, could cause cancer. Since diet sodas may not appear “healthier” to consumers than full-sugar sodas, they choose the latter as a treat, not a source of hydration. Consumers are also being drawn in by marketing campaigns for limited-time flavors like Dr Pepper’s Creamy Coconut and Canada Dry Fruit Splash, which the company’s CEO described as its “most significant launch in years.” Meanwhile, Pepsi is struggling to keep up with its competitors as the company moved away from sugary sodas in recent years in favor of focusing on snacks. 

Questions:

1. Why did soda become less popular with consumers over the last decade, and why do you think its popularity is starting to rise again? 
2. What do you think customers find appealing about soda flavors that are only available for a short time? Should more beverage companies depend on marketing campaigns centered around limited-run flavors? 

Sources: Tracy Brown Hamilton, “Why Coke and Dr. Pepper Are Outselling Starbucks and Big Macs,” Fast Company, Nov. 1, 2024; Nathaniel Meyersohn, “Soda is making a comeback,” CNN, Nov. 1, 2024.