NEW YORK (AP) — It wasn't too long ago that America had a love affair with soda. Now, an old flame has the country's heart.

As New York City's ban on the sale of large cups of soda and other sugary drinks at some businesses starts on Tuesday, one thing is clear: soda's run as the nation's beverage of choice has fizzled.

In its place? A favorite for much of history: Plain old H2O water.

For more than two decades, soda was the No. 1 drink in the U.S. with consumption peaking in 1998 at 54 gallons a year, according industry tracker Beverage Digest. Americans drank just 42 gallons a year of water at the time.

But over the years, as soda increasingly came under fire for fueling the nation's rising obesity rates, water quietly rose to knock it off the top spot.




"It might just be the placebo effect or marketing, but it tastes crisper," said Ngo, who lives in Miami.

The trend reflects Americans' ever-changing tastes; it wasn't too far back in history that tap water was the top drink.


Americans kept drinking more of the carbonated, sugary drink for about a decade. Then, soda's magic started to fade: Everyone from doctors to health advocates to government officials were blaming soft drinks for making people fat. Consumption started declining after hitting a high in the late 1990s.


Until then, bottled water had mainly been sold in "big jugs and coolers" for people who didn't trust their water supply, said John Sicher, publisher of Beverage Digest.

The new soft drink-like packaging helped fast-track bottled water's growth past milk and beer. In fact, the amount of bottled water Americans drink has risen nearly every year for more than two decades, while the estimates of how much tap water people drink has fluctuated up and down during that time. When taken together, water finally overtook soda in 2008, according to Beverage Digest. (It's difficult to track how much tap water people drink and how much is used for other things like washing dishes, so experts estimate consumption.)


Based on current trajectories, Michael Bellas, the CEO of the industry tracker Beverage Marketing Corp., predicts that bottled water alone could overtake soda within the next decade. That's not counting enhanced and flavored waters, which are growing quickly but remain a small part of the bottled water industry.




It's already starting to happen. The town of Concord, Mass. earlier this year banned the sale of water bottles that are less than a liter. And the University of Vermont became the first public university to ban the sale of bottled water last year.


"Good old marketing has convinced people that they should spend a lot of money on bottled water," says Salome Freud, chief of New York City's distribution water quality operations.

Although companies such as Coca-Cola Co. and PepsiCo Inc. would rather have people buy bottled waters, they're even more invested in getting people to drink more soda again.

That's because soda and other drinks that the companies make, such as sports drinks and juices, are more profitable than bottled water. With bottled water, people tend to buy whatever is cheapest. That's a habit that forces companies to keep prices relatively low, which eats into profits.

It's why companies are investing so heavily in developing nations such as China and India, where the appetite for soda continues to grow.

Conversely, in the U.S., annual soda sales are more than five times as big as bottled water at $75.7 billion a year, according to Beverage Digest. In terms of volume, soda is only twice as big as bottled water.

At Coca-Cola, the No. 1 soda maker, three-quarters of its volume in gallons comes from soft drinks, compared with 8 percent for its bottled waters including Dasani. PepsiCo, the No. 2 soda maker, gets 64 percent of its volume from soft drinks and only 7 percent from its Aquafina bottled water.

It's why Coca-Cola, which holds 13 percent of the bottled water market compared with PepsiCo's 10 percent, doesn't seem to think bottled water will ever overtake soda. In an emailed statement, the Atlanta-based company noted that soft drinks remain a far larger category than bottled water and that it sees "upside" for sodas over the next several years.

However, the company added that it saw "great potential" for bottled water. Like its competitors, Coca-Cola said it's focusing on growing its portfolio of bottled waters profitably by offering brands such as Smartwater and its flavored Vitaminwater, which fetch higher prices.

In the meantime, the chairman and former CEO of Nestle Waters North America, Kim Jeffery, is waiting for bottled water's moment in the spotlight. Nestle, the Swiss company that makes Poland Spring, Nestle Pure Life, Deer Park and other brands, has nearly half of the share of the bottled water market.

At a beverage industry conference late last year, Jeffery noted that bottled water is "the elephant in the room."

And given the growing warnings over drinking too many calories — including from juice, milk and other sugary drinks — Jeffrey said he's confident that water will continue to grow in popularity.

"For thousands of years, water was beverage of choice for human beings," he said. "Now we're reverting back to that."



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