UPDATE 2-U.S. soda consumption fell faster in 2011

Tue Mar 20, 2012 11:32am EDT

* U.S. soda sales down 1 pct in 2011 - newsletter

* Pricing up about 3 pct - newsletter

* Coke, Pepsi shares up slightly, Dr Pepper shares down

By Martinne Geller

March 20 (Reuters) - U.S. carbonated soft drink consumption fell faster last year as strength in energy drinks failed to offset weakness in traditional sodas from Coca-Cola Co and PepsiCo Inc, according to a leading beverage industry newsletter.

Total sales volume of soda fell about 1 percent in 2011 to 9.27 billion cases, according to Beverage Digest, about the same level it was in 1996. Sales volume fell 0.5 percent in 2010.

Excluding energy drinks such as Red Bull and Rockstar, soda volume was down 1.5 percent last year, Beverage Digest said.

"Carbonated soft drinks, while still the biggest category, are playing a declining role in Americans' beverage consumption," the newsletter said on Tuesday.

Soda sales in the United States grew about 3 percent annually throughout most of the 1990s but began to slow in 1999. Sales have been in decline since 2005 as increasingly health-conscious consumers turn to options they see as healthier, such as bottled water, juice and tea.

Americans on average drank 714 eight-ounce servings of carbonated soft drinks last year, down from 728 in 2010, Beverage Digest said, noting that consumption was the lowest since 1987.

At retail, revenue rose about 2 percent to $75.7 billion.

Beverage Digest estimates that prices were up about 3 percent last year as manufacturers sought to pass through some of the increase in costs of raw materials including corn syrup, used as a sweetener. Those price increases likely contributed to the volume weakness.

NON-CARBONATED DRINKS GET MORE ATTENTION

Including bottled waters, juice drinks, teas and sports drinks, bottled beverage sales rose 0.8 percent to 15.2 billion cases in 2011, said Beverage Digest. That represented a slowdown from 2010, when sales rose 1.7 percent.

According to separate data released on Tuesday from Beverage Marketing Corp, premium-priced drinks such as bottled tea and coffee, sports drinks and energy drinks performed well in 2011.

Still, the research, consulting and financial services firm said the economy had an impact.

"Higher prices did almost certainly contribute to 2011's deceleration as lower-income consumers continued to struggle," the company said.

According to Beverage Digest, the top four sodas -- Coke, Diet Coke, Pepsi-Cola and Mt. Dew -- all saw declining sales last year. Of those, Coke's market share was flat, while the other three all lost share.

Including all bottled drinks, Coca-Cola Co cornered 34 percent of the market, followed by PepsiCo with nearly 27 percent, Dr Pepper Snapple Group Inc with 11 percent, and Nestle Waters North America with about 10 percent.

Nestle Waters, a unit of Switzerland's Nestle, sells bottled water brands including Poland Spring, Perrier and Nestle Pure Life.

Coke shares were up 13 cents to $70.53 on the New York Stock Exchange, while Pepsi shares were up 55 cents at $65.28. Dr Pepper Snapple shares were down 16 cents to $38.50.

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