Coke and Pepsi are facing a terrifying reality

American Soda Consumption Reaches 30-Year Low

Americans cut their soda intake yet again in 2015.

The total volume of soda consumed in the US dropped 1.2% in 2015, compared to a drop of 0.9% in 2014, according to Beverage Digest's annual report.

The amount of Coke consumed by Americans dropped by 1% by volume, while Pepsi Cola dropped 3.2%.

The slide in soda consumption is a continuation of a multi-year slump. In total, Americans consumed 8.7 billion 192-oz cases of carbonated soft drinks in 2015. That's 1.5 billion cases fewer than peak volume, which was 10.2 billion cases back in 2004.

Americans turning away from landmark soda brands is an obvious negative for PepsiCo and Coca-Cola. However, the companies are working hard to solve the problem — and to convince others declining soda consumption may not be such a huge issue after all.

One major way companies are trying to reframe the fact that Americans are drinking less soda is by emphasizing sales of packages, instead of by gallonage.

"People ask me, 'When do you think the carbonated soft drink categories going to stop declining?'" Sandy Douglas, president of Coca-Cola North America, said in a Morgan Stanley Global Consumer and Retail Conference in November. "That question is born of measuring volume, a gallonage, not packages."

Indeed, while the sheer volume of soda that Americans drink is decreasing, soda giants are quick to emphasize that the number of bottles and cans that consumers are buying is increasing. Companies like Coke can make more money selling a smaller bottle than they can selling a larger bottle.

A Coca-Cola slide at Morgan Stanley Global Consumer ConferenceThomson Reuters

"The consumer is moving to smaller packages," Douglas said. "A 12-ounce can traded to a 7-ounce can is a 30% reduction in volume, but it's an increase in revenue."

Still, even if soda companies are pushing the narrative that Americans drinking less soda is, in fact, a good thing for business, that doesn't mean Pepsi and Coke aren't looking for other solutions. Coca-Cola and Pepsi are increasingly diversifying outside of their namesake sodas to sell drinks that consumers perceive as healthier — and customers are responding positively.

While volume across cola brands decreased, non-carbonated options grew in 2015. Gatorade's volume increased 6.1% in the liquid refreshment beverage category in 2015, while consumption of water brands Dasani, Aquafina, and Poland Springs increased in volume from 6.5% to 11.4%.

Related: The evolution of Coca-Cola through the years:

Coca-Cola through the years
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Coke and Pepsi are facing a terrifying reality
UNITED STATES - CIRCA 1950s: Teenaged girl with bottle of Coca-Cola. (Photo by George Marks/Retrofile/Getty Images)
(GERMANY OUT) *23.03.1912-16.06.1977+Physiker, Raketenforscher, D/USA- Porträt mit Coca-Cola-Flasche- 1963 (Photo by ullstein bild/ullstein bild via Getty Images)
FRANCE - MAY 01: Centenary of Coca-Cola In France In May, 1986. (Photo by Didier CONTANT/Gamma-Rapho via Getty Images)
BOHOL, PHILIPPINES - 1988/01/01: A lemur clings to a coke bottle. . (Photo by Roland Neveu/LightRocket via Getty Images)
Bottles of Coca-Cola, Tab, and Sprite on the shelf of a grocery store in New York City, USA, September 1988. (Photo by Barbara Alper/Getty Images)
SAN FRANCISCO - JANUARY 16: Bottles of Coca-Cola are seen on the shelf at Tower Market January 16, 2004 in San Francisco, California. Coca-Cola is being investigated by U.S. regulators over allegations raised by a former employee that it had inflated its earnings. (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO - JANUARY 16: Cans of Coca-Cola are seen on the shelf at Tower Market January 16, 2004 in San Francisco, California. Coca-Cola is being investigated by U.S. regulators over allegations raised by a former employee that it had inflated its earnings. (Photo by Justin Sullivan/Getty Images)
UNITED STATES - OCTOBER 20: Bottles of Coca-Cola and Diet Coke are displayed on a shelf in an Associated Supermarket in New York Thursday, October 20, 2005. Coca-Cola Co. said third-quarter profit surged 37 percent, the biggest gain in more than a year, as sales rebounded in the U.S. and demand for Powerade sports (Photo by Ramin Talaie/Bloomberg via Getty Images)
PARK RIDGE, IL - NOVEMBER 07: 2-Liter bottles of Vanilla Coke as seen in a grocery store November 7, 2005 in Park Ridge, Illinois. Atlanta-based Coca-Cola Co. has said it plans to discontinue its Vanilla Coke in the US by the end of the year. (Photo by Tim Boyle/Getty Images)
NEW YORK - FEBRUARY 19: A general view of the new aluminum Coca-Cola bottle at Mercedes Benz Fashion Week Fall 2009 Collections at Bryant Park on February 19, 2009 in New York City (Photo by Donald Bowers/Getty Images for The Coca Cola Company)
Bottles of Coca-Cola Co.'s Coke brand soda sit on a shelf behind the bar at Smith & Wollensky in New York, U.S., on Monday, Feb. 22, 2010. Coca-Cola Co., the world's biggest soda maker, agreed to buy the North American operations of bottler Coca-Cola Enterprises Inc., more than six months after PepsiCo Inc. moved to bring its bottlers in-house to cut costs. Photographer: Daniel Acker/Bloomberg via Getty Images
LONDON, ENGLAND - MARCH 19: Rita Ora attends photocall to celebrates 100 years of the Coca-Cola Contour Bottle at the Coca-Cola Contour Centenary Bar on March 19, 2015 in London, England. (Photo by Mike Marsland/WireImage)

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