It's not the end of soda -- yet. But soft drinks have peaked, while bottled water, energy drinks, and a considerable amount of premium alcohol are taking their place in our liquid diet.
One hundred and eighty gallons. It's enough to fill 11 kegs, four bath tubs, or just one big aquarium. It's also how much liquid you drink ever year.
The question is: 180 gallons of what?
American drinking habits have undergone a major shift in the last decade. Throughout the 1990s, soft drinks made up nearly a third of the typical Americans' liquid diet. But in the last ten years, we've cut our soda consumption by 16 percent. Meanwhile, we now drink more than 50 percent more bottled water than we did in 2001 -- and twice as many energy drinks.
"Soft drinks peaked around 1998," said Thomas Mullarkey, an analyst from Morningstar. The big winners in the last decade have been bottled waters, sports drinks, wines, and then spirits, "which have picked up a quarter of a gallon per person in the last decade," Mullarkey said, before adding, "that is a lot of extra alcohol."
THIS IS WHAT YOU DRINK (IN 2 GRAPHS)
Here's a glimpse of American drinking habits between 2001 and 2011. The data from the Beverage Information Group, via MarketWatch, does not include some miscellaneous categories, which include tap water, sports drinks, and energy drinks.
And here is another look at the same data -- this time showing percent growth or decline in each category over the last decade.
Two mega-trends that jump out from the data: (1) the swap between soft drinks and healthier alternatives like bottled water; and (2) the swap between beer and wine/spirits. Since total liquid consumed is a fairly zero-sum number, Mullarkey said, one sector's gain must be another sector's pain. "You're seeing that the consumer is taking a healthier look and having more alternatives [than soda], such as tea, and coconut water," he said, "but also, Americans have aged, and soft drinks are most popular among teenagers and twentysomethings."
Older women in particular have led the increase in wine consumption, he said.
Something beyond demographics is pushing down beer sales and lifting spirits, and it looks a lot like what's happening to the broader economy. The middle-class brands are getting crushed, and the high-end is running away with all the income.
Cheap beers have lost market share to craft beers, Mullarkey said, since young lower-middle-class men have had the worst time during the Great Recession. Craft beer sales grew 15% last year, but the volume of mass-produced beer has declined in every year since the downturn. Light beers are still the most popular in the country, but the shift toward craft means less beer volume consumed overall. "With cheap light beer, you might have four, five or six in a seating. But with the higher-end and more flavorful beers, one or two might do," Mullarkey said.
GOOD TIME FOR A STIFF DRINK
It's the same story for liquor, where you don't need a spreadsheet to know how well a spirit is selling. Just go to a bar and see for yourself: the higher the shelf, the faster the growth. A 2012 Morningstar analysis of bourbon and whiskey found sales had tripled among super-premium brands in the 2000s, despite outright decline in "value" (i.e.: cheap) liquor. "U.S. consumers are increasingly purchasing pricier whiskey and bourbon," Morningstar reported, "and super- premium products, including Crown Royal and Woodford Reserve have grown volumes at a 13% [adjusted annually] since 2002."
Seventeen years ago, liquor consumption hit a 40-year low, so the industry tried something new. They advertised. Before 1996, spirit companies had a self-imposed advertising ban on radio and television. "Drunkards were a horrible disgrace before Prohibition and hard-alcohol companies wanted to stay in the good graces of government by not advertising," Mullarkey said. But companies lifted their ban in 1996, and per capita liquor consumption has been growing since.
WORLDWIDE BEER FEST
Don't cry for the soda and beer companies just yet. Not only are the largest beverage makers adapting to America's new tastes by offering new products aimed at upper-middle-class customers, but also the overseas market provides a nice cushion for falling market share in the U.S.
Some of the same trends Americans are running away from -- an unhealthy obsession with soda and cheap beer, for example -- the rest of the world is running toward. Coca-Cola's sales in India and China are growing faster than their respective GDPs. As developing economies like the BRICs and Turkey get more pocket money, their demand for beer and spirits continues to grow, and spirit-heavy countries like Russia and India will probably start drinking more beer.
For the U.S., it might be the beginning of the end of an era of syrupy soda and cheap light beer. But for billions of families getting a first taste of middle-class life this decade, it's something more like the beginning.