ATLANTA — U.S. sales of sugary cola drinks may be on the decline these days, but that doesn’t mean Americans are abandoning their desire for fizz.
Carbonated drinks are showing up in categories long thought to be a mismatch — teas, waters and juices — and putting a little pep back in the step of beverage makers who maintain that sparkling products still rule the roost.
“I don’t think people ever stopped liking bubbles,” said Seth Goldman, co-founder and president of Honest Tea, which launched a zero-calorie soda, Honest Fizz, in January. “It’s fun and they (consumers) continue to look for that. But they want it in more varieties, including zero calories.”
The numbers bear that out, at least in sparkling waters. Volume in the segment is up more than 16 percent in the first half of 2013, according to industry publication Beverage Digest. Coca-Cola earlier this year added new product Fruitwater to the category — it already had a sparkling water entry from Seagram’s — and Pepsi is said to be working on an offering.
“Volume metrically, this is much smaller than other categories,” said Gary Hemphill, a spokesman for Beverage Marketing Corp. “But you are seeing a lot of innovation.”
The focus on new ways to incorporate bubbles isn’t happening just because of creativity. Beverage makers, including market leader Coca-Cola, are under pressure as soda sales, which make up about half of revenue, continue to take a beating from public health advocates and some consumers over calories and sugar content.
Even their diet variations have lately shown signs of weakness. Volume for diet carbonated soft drinks fell in 2012 and Beverage Digest publisher John Sicher said the landscape hasn’t really improved much in 2013.
“In first half retail data for this year, Coke’s and Pepsi’s overall regular (carbonated soft drink) volume was down, but not as much as their diet volume,” Sicher wrote in research notes in July.
Industry experts suggest two things may be happening. First, lower-calorie products such as Coke Zero and Pepsi Next may be siphoning volume from Diet Coke and Diet Pepsi, respectively. Also, studies concluding that diet drinks, especially ones using aspartame, come with their own health risks that may be affecting the public’s perception of them.
Beverage makers, however, are cautious about reading too much into indications of potential relief for slipping cola sales.
“Coke is still the epicenter of our business,” said Stuart Kronauge, general manager of sparkling beverages for Coca-Cola North America. Colas have the highest yearly per capita consumption among non-alcoholic beverages at 43.8 gallons, her office said, using Nielsen data. And when it comes to drinking pop, consumption levels equal 603 million servings per day.
“Sparkling, as a category, is still a huge category,” Kronauge said.
While it is agreed that the growth is significant and shows that carbonation is not dead, leaders of companies wading into the category said the decision to do so was not taken lightly.
Honest Fizz’s Goldman said Honest Tea’s staffers worried about the impact a fizz product would have on the brand. Honest had established its credentials in health food stores such as Whole Foods and carbonation has negative connotations among some consumers.
“There’s nothing inherently unhealthy about carbonation,” he said.