While Coca-Cola and PepsiCo will never ditch sugary sodas that serve as their namesakes completely, this is a radical step forward for the beverage beasts.
PepsiCo is finally turning their back to sugar. That news may be a shock to some, but the soda mogul’s seemingly sudden bend on nutrition isn’t all that unexpected.
They announced today that by 2025, two thirds of its drinks will contain 100 calories or less from added sugar (per 12 oz). As of now, these sugary sodas account for 40% of PepsiCo’s beverages.
But again, this isn’t too surprising. Pepsi is merely following a larger trend in the beverage industry, which is now predicated on turning around steadily declining soda consumption sales.
In 2015, the volume of soda consumed in the States dropped 1.2%, compared to just 0.9% the year before. Coca-Cola saw a loss of 1% of their volume going unconsumed, while Pepsi Cola was punished at a 3.2% drop rate.
The decline of soda is attributed to the growing body of scientific evidence that’s put the debilitating effects of sugar in the spotlight. So as a result, Pepsi and Coke are rebranding their offerings to encourage more sales across their tea, coffee, and bottled water brands.
PepsiCo CEO Indra Nooyi said back in April that a quarter of the company’s global sales come from soda alone. And that’s not the most surprising statistic: Pepsi’s “naturally nutritious” category, which includes bottled water and unsweetened drinks, makes roughly the same margins as the soda division does.
Nooyi says the emphasis on nutritious products is “future-proofing” Pepsi’s portfolio, “reshaping it to capitalize on consumers’ increasing interest in health and wellness.”
And Coca-Cola is following in their top competitor’s footsteps.
“Since 2000, we’ve increased our business from about 10% of our volume coming from still beverages to almost 30% today,” COO James Quincey said back in July. Now, they’re investing in juices, teas, coffees, and bottled water.
While Coca-Cola and PepsiCo will never ditch sugary sodas that serve as their namesakes completely, this is a radical step forward for the beverage beasts. Those two-liter Coke and Pepsi bottles are no longer the foundation of each company; they hope the move towards smaller cans and less sugar equates to bigger profits and better health.
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