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.”
Source:
www.marketwatch.com
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