Small Soda

Harnessing Consumer Choice to Cut Soda Consumption

Big soda is rapidly becoming small soda, without the help of soda taxes. Sales of the three largest soft drink makers — Coke, Pepsi, and Dr. Pepper Snapple — are stabilizing as measured in dollars while the number of ounces sold is continuing a long-term decline. Those clever marketers are repositioning their brands as a treat and harnessing consumer choice to cut soda consumption.

We take heart from this trend.

In the early 20th century, soda was indeed a treat — enjoyed sparingly as a something special. But then in 1976, 7-Eleven introduced the big gulp. Average serving sizes grew from six ounces to twelve or more. Two liter bottles were everywhere. Giant sizes with unlimited refills became the norm at fast food restaurants. By the mid-1990s soda consumption had become a major source of dramatically more sugar consumption in the American diet and public health advocates went into full panic mode.

The result was that soda consumption declined and water consumption grew. Big soda found itself vilified under a barrage of bad public relations that has been unrelenting. A growing push for soda taxes presented the industry with a worst case scenario. The possibility they would have lower sales at a higher price — and the government would take the money from the higher price.

So now, soda marketers are selling smaller sizes at a higher price. They’re effectively raising the price as a soda tax would, but keeping the money for for themselves. For the first time in some time, the ounces of soda consumed in 2015 dropped but sales were stable. Sales of smaller Coke packages are growing at 15%, while the larger packages are down significantly.

Marketers are far more adept at reshaping consumer habits that public health scolds. It’s a good thing that they’ve realized they must.

Click here for more from Dow Jones and here for more from ConscienHealth.

Small Soda, photograph © Colin Dunn / flickr

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February 6, 2016

8 Responses to “Harnessing Consumer Choice to Cut Soda Consumption”

  1. February 06, 2016 at 6:32 am, Joe Gitchell said:

    This is a powerful suite of observations, Ted.

    it is potentially neat how the sturm and drang of moral panic may actually end up yielding decent “outcomes”, but probably not the most efficient way to establish different incentives.

    Akin to the closing paragraph of this piece from Austan Goolsbee on moral exhortations:

    http://www.slate.com/articles/business/the_dismal_science/2005/09/the_grip_of_gas.html

    Joe

    • February 06, 2016 at 6:40 am, Ted said:

      Thanks, Joe! Goolsbee’s point about alternatives is especially important in the realm of food and drink. Less soda and more beer is not necessarily a solution.

  2. February 06, 2016 at 7:03 am, Joe Gitchell said:

    And I’m guessing you saw this piece:

    http://www.theatlantic.com/health/archive/2016/02/the-sad-truth-about-seltzer/433947/

    I was stunned by the parallels of relative risk communication regarding nicotine (yes, I pretty much have a one-track mind!). Is public welfare enhanced from this article? Could it have been with a different headline and some clear declaration that while seltzer is unlikely to be enamel-promoting, one cannot it imagine it being worse than soda?

    I am grateful that the real world provides so many things that provoke my animus (good word from your tweet, Ted!)!

    I’m not sure that counts as an expression of gratitude–partial credit?

    Joe

    • February 06, 2016 at 8:17 am, Ted said:

      It’ll rot your teeth, young man!

  3. February 06, 2016 at 7:41 am, Allen Browne said:

    Good example of “power to the people”. Now the trick is how to educate/market good choices. Probably, in the long term, more effective than legislation, rules, laws, taxes. Time will tell.

    I like the picture. May I steal it?

  4. February 06, 2016 at 11:38 am, Anthony Pearson said:

    I’m not sure this is all good. It seem that BigBeverage has shifted their focus to pushing pseudo healthy vitamin water with added sugar.
    BTW, your click here link doesn’t seem active.
    An interesting change in my hospitals food services recently: they have eliminated all sugar containing soda but left artifically sweetened soda. I have no idea what the effect of this will be.

    • February 06, 2016 at 2:29 pm, Ted said:

      Thanks, Anthony. The links all work. Two of them weren’t highlighted, but now they are.