US soft drink consumption at 16-year low Carbonated soft drink consumption in the US last year fell to its lowest level since 1996, the latest industry figures showed on Tuesday, highlighting the predicament Coca-Cola and PepsiCo face as they invest in their flagship cola brands. According to data from Beverage Digest, total carbonated soft drink volumes fell by 1 per cent year-on-year in 2011 to 9.2bn cases, declining twice as fast as they did in 2010. Volumes have declined every year since 2005, as consumers shift increasingly to bottled water, juices and teas. Carbonated soft drink volumes grew by about 3 per cent per year through the 1990s, before slowing at the turn of the century and slipping six years ago. The figures show Coke holding its place as the cola leader, followed by Diet Coke and Pepsi, which continued to lose market share and volume. Pepsi relinquished its second place status in 2010, when it fell behind Diet Coke for the first time, and failed to make up ground last year. Carbonated soft drinks have struggled due to growing health fears over obesity and diabetes in the US. States and cities have been pushing for carbonated soft drink taxes and imposing rules to eliminate soft drinks from schools. Meanwhile, public health groups have been promoting scientific research linking Coke and Pepsi to cancer. Although the companies deny any such risks associated with their products, the threat of warning labels caused them to make changes to their ingredients. In spite of the negative publicity, soft drinks companies increased prices by about 3 per cent last year as they sought to cover high commodity costs. "Higher prices almost certainly contribute to 2011"s deceleration as lower-income consumers continued to struggle," according to Beverage Marketing Corp, a research group. Coca-Cola and PepsiCo are clinging to their core cola brands, and both announced plans last month to cut costs and reinvest in marketing and advertising. PepsiCo is battling the perception that it neglected its namesake brand and is looking to link up the marketing of its fast-growing snacks products and its slower growing US beverages. Indra Nooyi, PepsiCo's chief executive, said at an industry conference last month that the company was looking beyond carbonated soft drinks (CSD) to the broader liquid refreshment beverage (LRB) category. "If you go back to the early 90s, PepsiCo articulated an exclusive strategy to be a total beverage company," she said." CSDs were always a smaller portion of our total portfolio than our key competitors, so our game has been to play the total LRB space and that's what we're going to keep doing. Shares of PepsiCo were up 0.94 per cent to $65.36 in midday trading on Tuesday. Coca-Cola shares rose 0.38 per cent to $70.67.