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Coke, Pepsi losing the fizz
No. 1 and No. 2 soft drinks makers didn't get a bubbly response from U.S. consumers in 2004.
March 8, 2005: 7:41 AM EST
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - Sugar isn't always sweet as both Coca-Cola and PepsiCo found out after seeing overall declines in their share of the U.S. carbonated soft drinks market last year, led by weak sales of Coke Classic and regular Pepsi.

But diet soft drinks and energy drinks continued to grow market share, according to an annual industry report by trade publication Beverage Digest.

Atlanta-based Coke (Research), the world's largest soft drinks maker, saw its domestic market share drop by 0.9 percent to 43.1 percent last year.

The market share for New York-based PepsiCo (Research), declined by 0.1 percent to 31.7 percent. Coke's overall volume -- a key sales measure in the beverage industry -- fell 1 percent, while Pepsi managed a volume gain of 0.4 percent in the U.S.

Among their top-selling brands, Coke Classic was the No. 1 selling non-alcoholic drink last year. However, Coke Classic's volume slipped three percent, while regular Pepsi-Cola, ranked No. 2, lost 2.5 percent volume, the report said.

Diet Coke's volume grew 5 percent while Diet Pepsi's volume grew 6.7 percent.

"The biggest trend last year was the accelerated growth of the diet sodas," said John Sicher, editor and publisher of Beverage Digest.

"We estimate that the diet category could actually surpass the regular soda category in about 12 to 15 years."

At the same time, London-based Cadbury Schweppes (Research), the industry's No. 3 player, boosted its market share by 0.2 percent point to 14.5 percent.

Cadbury's performance was helped by Diet Dr Pepper, which saw a 16.2 per cent increase in volume last year. However, its 7 UP brand dropped out of the Beverage Digest Top 10 soft drinks ranking for the first time since the inception of the ranking in 1985.

Together, the three companies -- Coke, Pepsi and Cadbury -- account for 90 percent of the industry's volume.

As consumers increasingly show their preference for low-calorie and sugarfree beverages, Coke and its rival PepsiCo announced plans earlier this year to offer more products in those categories.

For instance, both companies are gearing up to begin selling diet drinks sweetened with sugar substitute Splenda this spring. And Coke's other beverage rollouts this year includes a lime-flavored version of the flagship Coca-Cola brand and an energy drink called Full Throttle.

Said Sicher, "We think the new Coke drink will probably be a diet Coke drink with Splenda under the Coke Classic brand called 'Coke Zero' aimed at male consumers."  Top of page

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