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Corporate Jul 25, 2013

Coca-Cola, Pepsi lose as US not convinced to drink more soda

New York: It seems that not even pop starBeyonce or new, lower-calorie options can convince Americansto drink more soda.

Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple GroupInc. all sold less soda in the second quarter in NorthAmerica, dashing hopes for the moment that splashy newmarketing and different sweetener mixes could get drinkersback.

Coca-Cola Co. said it sold 4 per cent less soda in NorthAmerica, while PepsiCo Inc. simply said its decline for the
region was in the "mid-single digits." Dr Pepper sold 3 percent less of the fizzy drinks.



Coca-Cola, based in Atlanta, blamed the sluggish sales ona cold, wet spring. But the declines continue a years-long
trend. According to the industry tracker Beverage Digest, percapita soda consumption in the US has been slipping steadilysince 1998 amid concerns that sugary drinks fuel weight gain.

Another problem is that people now have so many morechoices when it comes to drinks. An endless array of bottled
waters, teas of many colors, even energy shots and"relaxation" drinks are vying for the attention of thethirsty, with store coolers getting more crowded all the time.

The trend "won't change and will probably get worsewithout a major breakthrough in new sweeteners," said John
Sicher, editor and publisher of trade publication BeverageDigest.

PepsiCo's decline for the quarter came despite itsstepped-up marketing over the past year; the company signed
Beyonce to star in its ads and signed a multiyear deal tosponsor the Super Bowl halftime show. The company also
introduced a mid-calorie soda called Pepsi Next to win backpeople who've quit soda because they don't like the calories
in regular or the taste of diet.

Dr Pepper has also introduced a lineup of 10-caloriesodas, starting with Dr Pepper Ten. The idea is that they have
just enough high-fructose corn syrup to taste better thandiet. But the new drinks apparently aren't convincing enough
people to pick up soda again.

Coke has even taken on the question of obesity head-on inTV commercials, hoping to convince people that physical
activity can let them enjoy some guilt-free refreshment.

To make up for the declines in the meantime, the industryis relying on bottled waters, teas, sports drinks and other
beverages to boost sales. They're also looking overseas toemerging markets, where middle-class populations are growingand there's a greater potential to sell them more drinks.

PepsiCo has said its work on a sweetener mix couldpotentially "alter the trajectory of our cola business in a
meaningful way." But it has yet to provide any more details.


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