Soda is Making a Comeback

Soda is making a notable resurgence in the U.S., as consumers return to classic beverages like Coca-Cola and Dr Pepper, according to recent quarterly earnings reports. Both soda giants reported increased sales volumes in the third quarter, with Evercore ISI data showing a 1.3% rise in soft drink consumption compared to last year, indicating a reversal in the decades-long decline that stemmed from health concerns surrounding sugary drinks.

Analyst Robert Ottenstein from Evercore ISI noted the stark shift from years prior when soda sales were decreasing by roughly 4% annually. Despite warnings about the health risks associated with sugary drinks, consumers seem drawn to soda as an affordable treat amid rising food prices. The Bureau of Labor Statistics reported that the average cost of a 2-liter soda was around $2 in September, a bargain compared to the $6.46 average price of a 16-ounce bag of chips.

This trend also comes on the heels of a resurgence in demand for sugar-free sodas like Coke Zero, which saw an 11% increase in volume last quarter. In 2021, Coca-Cola revamped Coke Zero to more closely mimic the taste of regular Coke, an update that appears to have paid off. Similarly, Dr Pepper has leveraged consumer interest in “dirty soda” trends – popular on platforms like TikTok – and introduced its “Creamy Coconut” limited edition flavour to appeal to younger audiences looking for new drink experiences.

Timothy Cofer, CEO of Keurig Dr Pepper, highlighted how soft drinks are gaining traction with “value-seeking consumers” who have become more discerning with their spending. Market analysts also observed a potential shift from more costly beverages like energy drinks to sodas, as buyers seek an inexpensive source of caffeine.

While Coca-Cola and Dr Pepper report gains, Pepsi has seen slower soda sales growth due to the company’s increased focus on snack lines, such as Frito-Lay and Quaker. Analysts suggest that this strategic pivot may be impacting its soda sales performance.

Viral social media trends are also fueling soda’s resurgence. Popularized on TikTok, “dirty soda” concoctions blend soda with syrups, cream, and fruit powder, gaining traction especially among young consumers and even celebrities. Recent viral recipes, like singer Dua Lipa’s “pickle juice and jalapeño” Diet Coke mix, have kept soda front and centre in online discussions and sparked a new wave of enthusiasm for these fizzy favourites.

As more consumers rediscover soda’s appeal, brands are poised for a strong holiday season.