NEW YORK — The soda wars appear to be shifting to another corner of the beverage industry — sparkling, flavoured waters.
A report released Monday shows U.S. soda sales fell at an accelerated pace last year, extending a streak of declines that began in 2005. But people are apparently developing a taste for another type of sweet, carbonated beverage.
Last year, a small brand called Sparkling Ice saw sales more than double to $302.4 million from the previous year, according to IRI, a Chicago-based market research firm. While still a tiny fraction of the broader soda industry, it represents striking growth from 2009, when sales were just $2.7 million. And it’s just one of the factors chipping away at the dominance of traditional sodas like Coke and Pepsi, particularly in the diet category.
Sparkling Ice drinks, which are labeled as “Naturally Flavoured Sparkling Mountain Spring Water,” come in a variety of fruity flavours and are made with the artificial sweetener sucralose, better known by the brand name Splenda.
Its success hasn’t escaped the attention of Coca-Cola Co. and PepsiCo Inc.
Coca-Cola introduced a line called Fruitwater last year that bears many resemblances to Sparkling Ice, including packaging in tall, clear bottles. A few months later, PepsiCo followed suit with Aquafina FlavorSplash, which also comes in a variety of fruity flavours.
The success of Sparkling Ice, which has zero calories, may also be among the reasons diet sodas are suffering steeper declines than their full-calorie counterparts. Last year, Diet Coke’s sales volume declined 6.8 per cent and Diet Pepsi’s declined 6.9 per cent, according to Beverage Digest. Industry executives have blamed the declines on people’s worries over artificial sweeteners. But Sparkling Ice is made with artificial sweeteners, as are Coca-Cola’s Fruitwater and PepsiCo’s FlavorSplash.
Exactly what differentiates the carbonated, flavoured waters from soda isn’t clear.
Theresa Eisenman, a spokeswoman for the U.S. Food and Drug Administration, said the agency doesn’t have a “standard of identity” for what defines a soda or a cola.