Diet Sodas Losing Their Appeal

Retail sales of soft drinks in the U.S. have been on a downward trend as consumers become more health-conscious. 2013 saw this trend continue, with Nielsen Scan Market xAOC data suggesting a 3.6% category decline in sales volume (packages sold) from 2012. Perhaps surprisingly, though, the sodas seeing the biggest sales declines were the ones once thought to be the savior of the industry: low- and zero-calorie sodas. While a collection of leading traditional brands are only down ~0.5%, their low-calorie counterparts are down nearly 6%!

Coke volume may be up slightly due to heavy discounting; given that these volume statistics are based on packages sold and not weight, it could be reflective of a consumer shift to smaller sizes (e.g. individual cans).

What might be causing diet soda’s fall from grace? Increasing customer reticence about artificial sweeteners is the likely culprit. The Wall Street Journal (citing a different soda sales estimate) recently came to the same conclusion:

A growing number of Americans are worried that aspartame and other artificial sweeteners are unhealthy, despite decades of studies by the Food and Drug Administration and other government agencies having found them to be safe. There is also a debate over how diet drinks might affect metabolism.

Amidst this market, Dr. Pepper Snapple Group last year had its national rollout of its “TEN” brand of ten-calorie versions of five sodas, including 7UP and Canada Dry, all of which are sweetened with a blend of high-fructose corn syrup and aspartame. Flashy advertising has backed the launch; whether sales will follow in 2014 is something the whole industry will be watching.