Soda Tax Hits Philly: Will Consumption Decline?

It started in Berkeley, Calif., and spread to municipalities from coast to coast during the November elections. As “soda taxes” continue to gain steam across the country, packagePRINTING has anxiously awaited the consumer reaction to these price hikes in sweetened beverages.

Via Flickr user Mike Mozart

In August, we shared the results of a UC Berkeley study that indicated soda consumption in the city’s low-income areas experienced a sharp decline. When packagePRINTING’s hometown of Philadelphia became the first major U.S. city to approve a soda tax, we were especially curious to see if the City of Brotherly Love would follow suit in curbing the soda habit.

Philly.com reports that in Philadelphia, qualifying beverages are taxed at 1.5 cents per ounce, with the money being allocated toward pre-K programs and other initiatives in the city. The tax is assessed at the distributor level, but unsurprisingly, it appears the increased prices are largely being passed to the consumer.

In the first week the tax went into effect, Philly.com hit the streets to see what consumers thought of the higher price tags. One report introduced a consumer who lamented not having enough money for both a quesadilla and a Sprite at a downtown Wawa food market. Though he voiced some objections over the quality of the quesadilla, Philly.com reported he opted for the food over the drink.

Another Philly.com report included a roundup of social media posts from Philly consumers. One Twitter user stated she put her soda back on the shelf after realizing the added expense. Another user tweeted he’d only be buying water in the city. One even tweeted with the tax in place that she'll be crossing state lines to buy her soda in Delaware.

Packaging Perspective: It’s going to take a lot more than a few angry consumers to put a dent in the soda and sugary beverage packaging market. While soda consumption may be trending downward, Coca-Cola and Pepsi are two of the most widely recognized brands nationwide. Coke, Pepsi and the other sodas that fall under the brands’ umbrellas won’t be disappearing from stores any time soon, even with a price increase in a few municipalities.

While converters would be wise to keep on eye on any consumer trend that indicates a product’s usage is decreasing, the massive beverage conglomerates also sell several types of other bottled beverages that won't fall victim to a soda tax — including water. Consumers in these tax-impacted locations may be starting to steer clear from soda, but it’s highly unlikely that the big beverage industry will have a diminished demand for packaging in the near future.