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But manufacturers of the sugary beverages aren't necessarily troubled by the downturn.

Rebekah Lowin
August 02, 2017

With soda consumption down for the twelth straight year, bringing it to a 31-year-low, you’d think soft drink manufacturers might have gotten the hint...and, you know, stopped producing quite as much of the stuff. But what we’re witnessing in the beverage industry right now is, in fact, the exact opposite: Coca-Cola, PepsiCo and Dr. Pepper Snapple Group are all working to rethink their strategies for each of their respective, popular soda drinks, not to completely shrink those brands

Of course, each company already has a diverse portfolio of non-soda beverages, including sports drinks, bottled water, and fruit-based juices—all of which are profitable enough to allow the brands to continue pouring money into marketing (and re-marketing) their traditional soft drinks. Coke, for instance, has reported that it’ll be debuting a new formula for its Coke Zero drink, even going so far as to rename it Coke Zero Sugar. 

As Duane Stanford, executive editor at Beverage Digest, told FOX Business. “It turns out people who still love soda are willing to pay more for it, especially now that it is in smaller packages that make it easier to control portions.” He explained that there’s no reason for these companies to worry about declining numbers as long as they are able to “assimilate” to the changes demanded by consumers.

“There have been two seismic consumer shifts in beverages,” he continued. “The obsessive hunt for variety and the need to better balance sugar and calorie consumption. Add to that a growing desire for simpler labels and more functional ingredients and this is a revolution. Beverage makers like Coca-Cola, PepsiCo and Dr. Pepper Snapple are learning how to assimilate these trends and make them work at scale.” 

Still, he said, it won’t be an easy shift, and it’s likely to be a while before the new strategies are reflected in earnings reports. 

“Turning a large ship takes time,” Stanford concluded. “And the complexity can be staggering.”

It’s all very counterintuitive. While that ship turns, we’ll be enjoying our kombucha.