Diet Coke Loses Position as No. 2 Soda in U.S.

Pepsi-Cola supplanted Diet Coke as the No. 2 soda brand in the U.S. by volume in 2014 as Americans continued to flee diet soft drinks, according to industry data published Thursday.

Overall U.S. soda consumption contracted 0.9%, the 10th straight yearly decline, as health-conscious consumers drop traditional carbonated drinks for everything from water to energy drinks to tea.

Coca-Cola Co.'s full-calorie Coke remained the country's top-selling soda last year with a market share of 17.6% after its volume rose 0.2%, according to Beverage Digest, a trade publication and data service.

But Diet Coke fell to No. 3, with a soda market share of 8.5%, after volume plunged 6.6% in 2014. PepsiCo Inc.'s full-calorie Pepsi-Cola had a market share of 8.8% after its volumes dropped 1.8%. Diet Coke had leapfrogged Pepsi-Cola for second place in 2010.

The reversal highlights the mounting woes of diet soda, which have fallen more sharply in the U.S. than full-calorie soda in each of the last four years. More consumers are concerned about the health impact of artificial, zero-calorie sweeteners such as aspartame even though the Food and Drug Administration says such sweeteners are safe.

Overall volumes of all nonalcoholic beverages including bottled water rose 1.7% in the U.S. last year after dropping 1.6% in 2013, according to Beverage Digest. Volumes at Nestlé SA's water division rose 9.1%, boosted by popular brands such as Nestlé Pure Life and Poland Spring.

Nestlé's market share of U.S. nonalcoholic beverages rose 0.7 percentage points to 11.0%, replacing Dr Pepper Snapple Group Inc. as the No. 3 industry player by volume. Dr Pepper Snapple's market share slipped 0.2 percentage points to 10.7% after volume dipped 0.1%.

Overall beverage volumes at Coke and PepsiCo each rose 0.3%. Coke had a 33.6% market share in U.S. nonalcoholic beverages, down 0.5 percentage point from 2013. PepsiCo's market share slipped 0.3 percentage point to 25.4%.

Write to Mike Esterl at [e-mail]

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