Hard Times for Soda As Attitudes Change

it is also aware that after decades of selling a handful of popular, iconic products, changing public attitudes are leading to a change in the nature of the business.

This summer, executives from the beverage industry gathered in New York City. The annual event, hosted by the trade magazine Beverage Digest, featured speakers from the three largest soda makers — Coca- Cola, PepsiCo and the Dr Pepper Snapple Group — along with smaller upstarts, like SodaStream, the home seltzer maker company, and Talking Rain, which makes no- calorie carbonated fruit drinks called Sparkling Ice.

Such events give companies a chance to show their stuff and brag about their successes, but there was nothing light about the atmosphere. As John Sicher, Beverage Digest’s publisher, put it in his blunt opening remarks: “It’s been a really challenging decade. It would have been a lot rougher if not for bottled water.”

As sales of the companies’ mainstay products have declined in the United States, the companies have scrambled to offer new products better suited to consumer tastes. Iced teas, sports drinks and flavored waters are smaller but fast-growing segments of the beverage industry.

The changing patterns of soda drinking appear to come thanks, in part, to a campaign to eradicate sodas. School cafeterias and vending machines no longer contain regular sodas. Many workplaces and government offices have similarly prohibited their sale.

Bottlers are feeling the changes. “We’re losing, I would say, 1.5 to 2 percent of our business every year,” said Harold Honickman, the chairman of the Honickman group of companies, one of the largest soda distributors in the mid-Atlantic region.

He was an opponent of the Philadelphia soda tax, though he said he might have supported a national sugar tax: “People are blaming a lot of the overweight on sugar-sweetened beverages, but there’s ice cream and cake, and everything else that adds to the problem.”

For many public health advocates, soda has become the new tobacco — a toxic product to be banned, taxed and stigmatized. It’s clear that soda’s calories contribute to weight gain and obesity, but whether its impact is greater than that of other unhealthy foods has not been conclusively demonstrated. Nevertheless, the change is already underway.

The current anti- soda sentiment has the big soda makers worried. Even diet sodas are experiencing a sharp decline in sales. Gary A. Hemphill, an industry consultant, projects that in 2017, water will surpass soda in sales and become the largest beverage category in the United States.

Although the big three soda companies all sell bottled water, they are not that excited about the trend. Customers appear to have less brand loyalty to water brands than to Coke or Pepsi, and it’s harder to compete in the grocery store, where low-margin companies that specialize in water are able to price large multipacks much lower than soda bottlers want to sell them.

These companies are expanding sales overseas, which has helped buoy their stock performance. But in the United States, they all worry about losing even nontraditional drink sales to a competitor. Someone might be a die- hard Coke fan, but prefer Snapple iced tea to Honest Tea, a Coca- Cola brand.

Executives at all the companies are eager to point to their lower- calorie and all- natural products as profitable lines of business. But the industry still fights any public policy efforts to discourage customers from consuming sodas.

“That’s existential,” said Hank Cardello, a former food industry executive.

But there is another existential threat that could be more hazardous than a tax. Historically, beverage preferences are set in adolescence.

Mr. Hemphill said, “If kids grow up without carbonated soft drinks, the likelihood that they are going to grow up and, when they are 35, start drinking is very low.”