Notes

Joanna Stepka is the soda industry's new nightmare.

The 33-year-old Rhode Island resident began drinking Diet Coke in kindergarten, graduating to three cans a day by adulthood. She quit in August after her gym trainer told her artificial sweeteners are unhealthy and make people fat even if they don't have calories.

"I thought it was a win-win, but after learning about the chemicals, definitely not,'' says Mrs. Stepka, a parenting lifestyle blogger.

Coca-Cola Co. (KO) and rivals hoped zero-calorie recipes would lift the $75 billion U.S. soda industry after Americans began scaling back on full-calorie carbonated soft drinks in the late 1990s amid obesity concerns. For a while they helped: Diet soda's share of consumption rose from 26% to 31% between 1990 and 2010, according to Beverage Marketing Corp., even as many consumers complained about the taste.

Now diet soda is the industry's weightiest problem. Store sales of zero- and low-calorie soda plunged 6.8% in dollar terms in the 52 weeks through Nov. 23, while sales of regular sodas dropped 2.2%, according to Wells Fargo, citing Nielsen scanner data. As a category, diet soda has contracted more than regular soda for three straight years.

"We are seeing a fundamental shift in consumer habits and behaviors," PepsiCo Inc. (PEP) Chairman Indra Nooyi said recently.

PepsiCo gets about a quarter of its U.S. revenue from soda. Coke and Dr Pepper Snapple Group Inc. (DPS) both derive more than half their U.S. sales from soda.

Soda isn't the staple it once was. In a March survey by Mintel, 34% of those aged 18 to 36 considered it a "treat,'' a higher proportion than among older drinkers. Meanwhile, about 20% of Americans say they are on a diet, down from more than 25% a decade ago, according to NPD Group.

But the biggest drag is health fears about artificial sweeteners found in diet soda—mainly aspartame, but also sucralose and acesulfame potassium.

The American Beverage Association says such sweeteners are among "the most studied and reviewed ingredients'' over four decades, and are safe weight-loss tools, positions echoed by the American Diabetes Association and the Academy of Nutrition and Dietetics.

The Food and Drug Administration and other government agencies around the world also vouch for their safety.

View galleryThis Monday, Oct. 15, 2012 photo shows two cans of …
This Monday, Oct. 15, 2012 photo shows two cans of Caffeine Free Diet Coke on ice in Surfside, Fla. …
Still, in a July opinion piece published in the journal Trends in Endocrinology and Metabolism, Susan Swithers, a Purdue University professor, argued that frequent consumption of such sweeteners might trigger "metabolic derangements'' by tripping up body mechanisms that regulate caloric intake.

Such concerns follow some studies showing a correlation between diet soda and obesity, diabetes and heart disease.

"There's way more not known than known,'' says Dana Small, a professor at Yale University School of Medicine.

Aspartame, in particular, gives consumers pause, after some studies starting in the 1970s linked it to cancer.

The FDA, which approved aspartame in 1981, says such studies, including an Italian one in 2005, were flawed.

The Internet has amplified fears. Among the top 10 Google search results for "diet soda'' on a recent day: "10 Reasons to Give Up Diet Soda,'' "No, seriously: Diet sodas are terrible for you, too'' and "7 side effects of drinking diet soda.''

Mrs. Stepka, the former Diet Coke drinker, broadcast going cold turkey to more than 6,000 Twitter followers. She also posted "10 Reasons to Give Up Diet Soda'' on her mother's Facebook wall to pressure her to quit.

In the Mintel survey, 46% agreed artificially sweetened soda is "unhealthy,'' including more than 50% of consumers younger than 35.

In a recent survey by Datamonitor, 28% of U.S. respondents said they avoid low-calorie sweeteners entirely and another 23% said they try to limit intake.

Soda companies are redoubling marketing and decadeslong efforts to create new diet sweeteners—especially ones derived from natural sources like the stevia plant, which is already in some beverages but can produce a bitter aftertaste.

Coke ran print ads this summer defending aspartame and pointing to more than 200 studies backing its safety. It is also leaning heavily on Taylor Swift to promote Diet Coke, splashing the singer's autograph on cans of the top-selling diet soda in October after signing her to a marketing deal.

"We believe very strongly in the future of Diet Coke,'' Steve Cahillane, Coke's Americas chief, recently told investors.

But earlier this year in South America the company began selling Coca-Cola Life, a mid-calorie cola featuring stevia for the first time in its flagship brand.

The company hasn't ruled out bringing it to the U.S. and is developing a new stevia variant with PureCircle Ltd. (PCRTF) that could win FDA approval in the coming weeks.

Bloomberg News Soda companies are redoubling marketing and decades long efforts to create new diet sweeteners.

PepsiCo axed aspartame in April from Pepsi Next, a mid-calorie cola, and plans to launch a new diet soda next year.

The company is weighing a new stevia variant and a sweetener enhancer developed by Senomyx Inc. that could lower the sucrose, fructose or high-fructose corn syrup in soda without sacrificing taste.

Dr Pepper Snapple is spending heavily to market Dr Pepper Ten, an artificially sweetened, 10-calorie soda that it launched in 2011 to appeal to males. A television commercial features a bearded man eating tree bark and canoeing with a bear while praising Ten's "bold'' flavor.