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Wednesday, July 17, 2013

What Are People Drinking Instead Of Coke?

A restored Coca-Cola mural in Georgia. (Brent Moore/Flickr)

A restored Coca-Cola mural in Georgia. (Brent Moore/Flickr)

Coca-Cola reported disappointing second-quarter results, citing bad weather and weak global growth.

But the company has steadily lost consumers in the United States, as people become more wary of consuming sugary drinks.

So what are Americans drinking instead?

Guest

  • John Sicher, editor and publisher of Beverage Digest.

Transcript

JEREMY HOBSON, HOST:

Well, Coke released its quarterly results yesterday; and they were not great, in part because Americans are drinking less soda although the...

ROBIN YOUNG, HOST:

Me, I'm cutting back.

HOBSON: The company CEO, though, says it's the weather. It's not the people are drinking less; it's the weather. But indeed, Americans are drinking less soda. For more on that, let's bring in John Sicher, the editor and publisher of Beverage Digest. And, John, are we drinking less soda?

JOHN SICHER: Overall, the carbonated soft drink business and the beverage business has been slowing in North America for many years. Carbonated soft drinks turned negative about eight years ago. And the health and wellness and obesity headwinds are certainly affecting Coke and Pepsi and Dr. Pepper Snapple in North America and in some other markets. But notwithstanding that Coke has been able to maintain global growth at a stronger pace than it did in the second quarter of this year. And globally, I think it will go back to stronger growth.

HOBSON: If we're not drinking as much soda because of, as you say, these obesity headwinds that are coming through, what are we drinking? What's the big drink for Americans in 2013?

SICHER: The big growth over the last eight, nine, 10 years has been in bottled water. During the recession years, 2008, 2009, there was also some growth in tap water. But the big news is bottled water has become a very big part of the beverage business and a very important part of it, and that's where a lot of the consumption is going.

HOBSON: And Coca-Cola, as well as its competitors, own some of the companies that make bottled water, right?

SICHER: That's right. Nestle is by far the biggest player in bottled water. Private Label is also very big in the U.S. Coke has got Dasani and Smartwater brands. Pepsi's got Aquafina, and they're both very big players in bottled water.

HOBSON: What about juices and teas? I saw that tea is, pardon the pun, hot right now?

SICHER: There's been some modest growth in juices over the years, but tea has been growing and tea has got great potential for growth. Tea is perceived by consumers as having health and wellness benefits, and it's also a gulp-able beverage. It's a refreshing beverage like carbonated soft drinks are. And tea has got the potential for pre-significant growth in North America.

HOBSON: John Sicher, what is your drink of choice?

SICHER: I - if I told you that, I'd have to kill you.

(LAUGHTER)

HOBSON: You don't want to make anybody angry in your business, I guess.

SICHER: I report on a number of fine beverage companies and they all make excellent products, and I drink all of their products.

HOBSON: I'm sure you do. John Sicher, editor and publisher of Beverage Digest. Thank you so much.

SICHER: You're very welcome.

YOUNG: OK. I know. I know.

(LAUGHTER)

HOBSON: I'm just saying.

YOUNG: I'm going to quit.

HOBSON: From NPR and WBUR Boston, I'm Jeremy Hobson.

YOUNG: I'm Robin Young. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.


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