This is the End of the Soft Drink Era

Wall Street Journal graph of declining soft drink salesA recent Wall Street Journal article questioned whether this the end of the soft drink era. The answer is: yes. The following 2013 megatrends are pushing sugary soda back to being a special treat rather than a beverage consumed at almost every meal.

Moms fighting obesity

Moms increasingly believe their loved ones are being endangered by industrial and fast foods including the “Super Size Me” sugary beverage. Obesity is now one of their major health issues with almost one of three Americans being overweight. Obesity is fueling a national diabetes epidemic with the CDC projecting a 50 percent increase in Type 2 diabetes among children. Confronted with this health threat, moms are responding by buying fewer sugary drinks for themselves and their loved ones.

Being fat is not cool to the Millennial generation

The Millennial generation is rejecting sugary sodas in favor of water, coffee and energy drinks. They are rejecting the boost they get from sugary drinks because it comes with the price of gaining weight. Overall, the Millennial generation is turning away from fast foods as being unhealthy. They might eat it because of its lower price, but their preference is to eat healthier food. For the Millennial generation “good food wins.”

Soft drinks cost more

Corn syrup is the major ingredient in sugary soft drinks. Global warming’s impact of more and more intense droughts has driven corn prices higher. In addition, the cost of water that is used in producing soft drinks is also going up. Then, there is the higher petroleum costs of manufacturing and delivering soda, including plastic bottles. A business driver behind Coca-Cola’s introduction of plant-based bottles is to cut their plastic bottle costs. Even with the cost containment efforts of soda companies, the net consumer result is that buying a soft drink is no longer cheap and the price is going up.

Sugary sodas have hit the sustainability wall

The bottom line for sugary soft drinks is that they have hit the “sustainability wall.” Their costs are going up because their supply chain is exposed to less sustainable agriculture, manufacturing and delivery. Their consumer revenues are being threatened by growing awareness among consumers of the long term health impacts of daily consumption. Soda companies now face more competition from price competitive and healthier beverages. The end of the soft drink era is being replaced by the dawn of sustainability.

Bill Roth is an economist and the Founder of Earth 2017 He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.

First Green Business Coach for Founder of EARTH 2017, a website posting economic analysis on disruptive trends impacting communities and businesses. President of NCCT, a consulting company that coaches CEOs and business owners on pricing and marketing best practices proven to win the millennial generation, and their moms, as customers.