While
soft-drink sales may have lost fizz, soda isn’t going away any time
soon. A decade ago, 80% of Americans consumed at least one such beverage
every two weeks. Today, 72% continue to do so.
The hard truth about soft drinks.
1. “The hottest new beverage is water.”
People
aren’t losing their thirst, but they are going back to basics. Water is
one of the fastest-growing segments of the beverage industry, studies
suggest, while sales for traditional fizzy drinks are on the decline.
From
2009 to 2011, sales of regular soft drinks declined by 1.9% to $27
billion, according to a 2012 report from market research group Mintel.
“It would seem that the category has seen its peak and is now
retreating,” the study reported. (Consumers are choosing more low- and
no-calorie beverages, says a spokesman for the American Beverage
Association.)
The decline is part of a shift in
consumer tastes. From 2001 to 2011, annual bottled-water consumption
soared 56% to 26 gallons per person — the equivalent of 166 of those
typical 20-ounce bottles — according to The Beverage Information Group
and the U.S. Census. At the same time, annual soda consumption fell 16%,
to 44 gallons (about 281 single-serving bottles) per person. Indeed,
many soda makers now also own bottled-water brands. Coca-Cola owns
Dasani, PepsiCo owns Aquafina, and Dr Pepper Snapple owns Deja Blue.
While
fizzy-drink sales may have lost their fizz, soda isn’t going away any
time soon. A decade ago, 80% of Americans consumed at least one such
beverage every two weeks, says Harry Balzer, chief industry analyst for
market research firm NPD Group. Today, 72% continue to do so. “Soda is
still a very popular part of the American diet,” he says. “More
Americans drink soda than drink energy drinks and coffee.”
2. “Coke made Santa fat.”
Coca-Cola
has been often credited with creating the modern image of Santa Claus:
The rosy-cheeked fellow with plenty of girth appeared as part of its
advertising as early as the 1930s. The old-fashioned version of St.
Nicholas, the European saint on whom Santa is based, is depicted as more
svelte. But amid growing concerns about rising obesity rates, Santa’s
size has begun to take on a new implications. “Soda continues to be
blamed for obesity, and proponents of obesity-reduction programs
continue to clamor to tax the beverage,” the Mintel report states.
Rising
consumption of sugary drinks has been a major contributor to the
obesity epidemic, according to a 2012 report published by the Institute
of Medicine. Some 26% of American adults defined themselves as obese in
2011, according to the Well-Being Index calculated by market research
group Gallup and health-care consultancy Healthways. And too much sugar
consumption is one of the most direct causes of Type 2 diabetes, says
Margo G. Wootan, director of nutrition policy at the Washington,
D.C.-based nonprofit Center for Science in the Public Interest. In fact,
drinking one to two sugary drinks per day increases the risk of Type 2
diabetes by 26%, a 2010 study published by the Diabetes Journal found.
The
industry disputes the idea that such studies prove that soft drinks are
a major part of or even cause the problem. “None of the studies say
that drinking a soft drink will make you obese,” says Christopher
Gindlesperger, a spokesman for the American Beverage Association. But he
says that the soft-drink industry has nonetheless responded to these
concerns and significantly reduced the amount of sugar in drinks: 45% of
soft drinks sold now have zero calories, and the average calorie count
per serving has fallen 23% since 1998. “It says a lot for consumer
tastes and what our companies are doing,” he says. A spokeswoman for
Coca-Cola says the company has helped reduce the number of “beverage
calories” sold in schools by 90% since 2006, when Coca-Cola joined the
Alliance for a Healthier Generation — a joint initiative of the William
J. Clinton Foundation and the American Heart Association — to create a
new school-beverage policy in the U.S.
3. “Diet drinks aren’t health foods.”
The
bad news: Diet soda may not be good for you either. One recent study by
French researchers published in The American Journal of Clinical
Nutrition found a strong correlation between diet drinks and increased
risk of Type 2 diabetes. Women who drink “light” beverages tend to
consume 43% more than women who drink normal sugary drinks — the study
found. Furthermore, when consumed in equal quantities, artificially
sweetened drinks were associated with an increased risk of developing
diabetes.
But correlation isn’t causation. These
studies don’t rule out that factors other than artificially sweetened
beverage consumption are responsible for the association with diabetes,
says Gindlesperger of the American Beverage Association. He says other
factors play a role: According to the National Institute of Diabetes,
for example, those at greater risk for Type 2 diabetes include people in
certain ethnic groups, those who are overweight or those with a family
history of diabetes.
4. “We’re caffeine-dependent.”
Energy
drinks are the new kid on the block in the beverage industry, stealing
market share from traditional sodas, experts say. In fact, sales of
energy drinks are expected to grow from $12.5 billion last year to $21.5
billion by 2017, according to the market research group Packaged Facts.
Soft-drink companies have their own energy brands. Coca-Cola sells NOS,
PepsiCo has Amp Energy and Dr Pepper Snapple owns Venom Energy.
But
the caffeine content of energy drinks has caught the attention of the
Food and Drug Administration. The FDA caps permissible caffeine levels
in soft drinks at 200 parts per million, or 0.02%, which is the
equivalent of around 72 milligrams in a 12-ounce can.
However,
there are no such restrictions on energy drinks and, an FDA spokeswoman
says, some may contain more than the FDA’s recommended allowance per
serving. “To date, no regulatory limit has been set for the amount of
caffeine in other types of drinks, although the FDA has received several
petitions requesting such a regulation,” a spokeswoman says.
One
16-ounce can of Monster Energy, one of the most popular energy drinks
on the market, has around 160 milligrams of caffeine (vs. 38 milligrams
in a 12-ounce can of Pepsi) and it isn’t unusual for users to consume
multiple drinks in a day. Tammy Taylor, a spokeswoman for Monster
Beverage, points out that the drinks contain half the caffeine of many
large coffees. Indeed, a grande (16-ounce) Starbucks coffee has 330
milligrams of caffeine, and a 16.5-ounce Panera frozen mocha has 267
milligrams, according to the nonprofit Center for Science in the Public
Interest.
5. “Caffeine and alcohol make a dangerous cocktail.”
Too
much of something is rarely a good thing — especially when it comes to
uber-caffeinated energy drinks. The number of people showing up at
emergency rooms reporting symptoms like racing heartbeat, seizures and
headache after drinking energy drinks soared from 10,000 to more than
20,000 from 2007 to 2011, according to a survey of hospitals released
last month by the federal government’s Substance Abuse and Mental Health
Services Administration. Most of those visits were made by teens or
young adults, it said.
“We’re seeing more and more
people coming in with these issues, especially young people who are
mixing their energy drinks with alcohol,” says Tom Sugarman, emergency
physician and spokesman for the American College of Emergency
Physicians. And it’s not just youngsters: Sugarman recently gave advice
to a mother who complained that her baby never slept; it turned out, she
was drinking energy drinks while breastfeeding. “That’s going to go
straight to baby,” he says.
Energy-drink manufacturers
take issue with the ER-visit study. A spokeswoman for Monster Beverage
says it’s “highly misleading and does not support any conclusion that
energy drinks are unsafe for consumers.” And as an official statement by
the American Beverage Association points out: The report “shows that
42% of the reported ER visits were by someone who had admitted to
consuming alcohol or taking illegal substances or pharmaceuticals…. And
the consumption of those substances along with energy drinks means the
energy drinks may be irrelevant.”
6. “We’re the last drink some people ever have.”
Because
many energy drinks are considered dietary supplements, the
manufacturers are required to report fatalities with potential
connections to the products to the FDA. As of March 6, 2013, there was
one report of an individual who drank the dietary supplement and energy
drink Rockstar Energy before dying; 13 reports of deaths involving
possible involvement of 5-Hour Energy; and eight death reports
mentioning Monster. Monster is changing its label to a conventional
food, but it has told the FDA that it intends to continue to voluntarily
file adverse event reports after the conversion.
There’s
no way to know, of course, whether the drinks and the fatalities are
causally connected. Maureen Beach, a spokeswoman for the American
Beverage Association, says energy drinks have been “enjoyed safely” in
the U.S. for more than 15 years and around the world for over 25 years.
5-Hour Energy — which is not a member of the ABA — is a 1.93 fluid ounce
“shot” rather than a “drink” and is only marketed to adults as a
dietary supplement, says Elaine Lutz, a spokeswoman for 5-Hour Energy.
Both Monster and 5-Hour say the filing of such reports doesn’t mean a
product caused the fatality. Lutz says 5-Hour doesn’t market its
products to children and does not recommend individuals take more than
two shots a day (spaced several hours apart). Rockstar Energy did not
respond to requests for comment.
7. “We like big cups and we cannot lie.”
In
March, a New York State Supreme Court justice overturned New York City
Mayor Michael Bloomberg’s plan to prevent restaurants, food carts,
delis, sports stadiums and movie-theater concession stands from selling
sugary drinks in cups larger than 16 ounces — much to the dismay of many
public health advocates. The Bloomberg administration plans to appeal
the decision, but experts say even if the ban on supersize sodas
succeeds, retailers will find a way around the ban in, well, a New York
minute.
Before the ban was overturned, Dunkin’ Donuts
unveiled signs telling customers that they could add their own sugar and
“flavor swirls” to large and extra-large beverages, which could
effectively help customers get around the rule. A spokeswoman for the
company says all Dunkin’ Donuts restaurants in New York City were
prepared to comply with the New York City beverage regulations.
Preparing special condiment stands for customers to add their own flavor
or sweeteners, she says, was primarily designed “to eliminate as much
confusion as possible.”
Scott DeFife, head of
government relations at the National Restaurant Association, says the
ban itself made little practical sense. For instance, customers at
Brother Jimmy BBQ, a chain of southern-style restaurants in New York,
would still have been able to order giant pitchers of cocktails like
margaritas — and as many ribs as they can eat — and simply order their
24-ounce drinks by buying several smaller cups, he says. Plus,
7-Eleven’s massive “Big Gulp” drinks would have been exempt from the
ban, as most convenience stores and supermarkets are beyond the city’s
regulatory reach.
8. “Our deep pockets will veto a soda tax.”
When
efforts by public-health advocates and senate leaders to consider new
federal taxes on soda and other sugary drinks escalate, experts say, so
does the lobbying spending of soda companies. Between 2005 and 2009, as
public-health advocates were making a big push to tax soda at the
national level, lobbying spending by the soda industry rose more than
30-fold, to $40.3 million in 2009, says Michael F. Jacobson, executive
director of the Center for Science in the Public Interest. That spending
effort contributed to the defeat of the proposals at the national
level, Jacobson says.
Between 2009 and 2011,
legislatures in several states and cities across the U.S. — including
Philadelphia, Texas and Washington, D.C. — considered implementing a
soda tax, but most of those were also rebuffed, and lobbying spending
has tapered off since then. The amount of money spent by Coca-Cola,
PepsiCo, and the American Beverage Association fell to $10 million in
2011, Jacobsen says.
The soft-drink industry says its
lobbying efforts also go toward other issues, like agriculture, tax,
nutrition and transportation. “We were reacting to the situation we
found ourselves in,” says Christopher Gindlesperger, the spokesman for
the American Beverage Association. He says it’s important to advocate on
behalf of consumers “about discriminatory proposals like taxes and
bans.” (Coca-Cola declined to comment and PepsiCo did not respond
requests for comment.)
9. “Our charitable donations wind up in strange places…”
A
report released in March by the nonprofit Center for Science in the
Public Interest says that soda companies donate to charitable causes
that might otherwise be highly critical of the industry. The
report
alleges that the industry’s donations to two major anti-hunger groups,
the Food Research and Action Center and Feeding America, for instance,
raise questions about those agencies’ “longstanding ties to food and
beverage companies.”
Such relationships between
corporations and nonprofits, some public-health advocates say, can
create a conflict-of-interest gray area. Case in point: These two groups
stand alongside the soft-drink industry in opposition to regulations
that would bar the use of the Supplemental Nutrition Assistance Program —
formerly known as food stamps — to purchase sugary drinks, says the
CSPI’s Jacobson. Critics wonder whether these organizations support the
use of SNAP benefits to purchase soda if they weren’t getting donations
from the soda industry. In separate statements, both groups say they’ve
consistently opposed restrictions on SNAP because there are better ways
to tackle obesity. Furthermore, they say, accepting donations from the
beverage industry doesn’t contradict or compromise their missions.
A
spokesman for Coca-Cola says the company spent $45 million on community
organizations last year. “The suggestion that our community
philanthropic efforts are motivated by something other than goodwill is
grossly inaccurate,” she says. A PepsiCo spokeswoman says the company
supports “a wide array of organizations that work in the communities” it
serves.
10. “…including with doctors and dentists.”
The
very organizations that should be giving tips advising people to drink
more water and less soda are also accepting money from soda companies,
according to the study by the Center for Science in the Public Interest.
It says the soft-drink industry has given money to groups representing
doctors, dentists and dietitians, which it alleges has made it more
difficult for them to give impartial advice. “Beverage companies are
using strategic philanthropy to protect their images and profit,” the
study reports.
For their part, soda companies say that they don’t give donations with the intention of silencing potential critics.
In
2009, Coca-Cola paid $600,000 to the American Academy of Family
Physicians to help create a website advocating healthy diets. Glen
Stream, board chair of the AAFP and a physician based in Spokane, Wash.,
describes the partnership between Coca-Cola and the AAFP as a “consumer
alliance” and says Coca-Cola provides no editorial control. “There is
an absolute firewall from the funding source that comes from Coca-Cola
and the information that is provided,” he says. “We would support taxes
on sugary beverages if the tax were actually high enough to affect
consumption.”
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