Sales of carbonated soft drinks have been in decline for over a decade. As a result, beverage companies have begun shifting their portfolios to accommodate changing tastes. Demand for healthier, fitness-minded products has set off a spate of M&A activity, primarily between Food and Beverage Conglomerates Coca-Cola Corp. and PepsiCo, to pick up new assets in sports drinks, water, and even homemade beverages.

Pepsi now derives approximately 45% of its revenues from “Guilt Free Products” including diet and other beverages that contain 70 calories or less from added sugar per 12-ounce serving. Coca-Cola has begun shifting its offerings as well as the company’s water, enhanced water and sports drinks sales volumes outperformed all other products, climbing 5% in the second quarter of 2018.

The beverage sector is experiencing the latest phase of its evolution that begun after soda sales peaked in the late 1990s and consumers became more health conscious. Diet sodas, which have shouldered especially significant hits in recent years, are no longer enough . . .

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