Fizz quiz: What’s the hottest new thing in soft drinks?

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COURTESY NESTLE WATERS

As the fizz fades from the carbonated soft-drink market, a growing number of beverage companies are looking to a different kind of sparkle to quench thirsts.

With colas and other sodas falling out of favor due to health concerns, beverage makers are trying to pump up interest in carbonated waters that offer flavor without a heavy dose of sugar.

“Americans still have a love affair with bubbles and carbonation, but they’re choosing other things, because of health and wellness,” said Gary Hemphill, managing director of research at research and consulting company Beverage Marketing.

Not surprisingly, Millennials are driving the trend, desiring sparkling waters with unusual flavors and more wholesome ingredients, he added.

Though premium sparkling water brands, such as Perrier, and traditional seltzers have been on the market for decades, industry giants are trying to reinvigorate the segment with new products:

— Nestle: In mid-February, Nestle’s Waters division will roll out new sparkling versions of its six regional spring water brands, including Poland Spring, called Sparkling. While the brands’ water sales top $2.6 billion, only $103 million of that total comes from sparkling.

“We truly believe we will be able to create exponential growth,” said Antonio Sciuto, chief marketing officer of Nestle Waters North America, which also has the Perrier and S.Pellegrino brands.

— PepsiCo. Having already added a sparkling version to its Aquafina line, Pepsico may dip another toe in with a new sparkling water product called Bubly. A mock-up of an ad for the fizzy drink was leaked last month.

— Coca-Cola. The soft-drink giant acquired sparkling mineral water brand Topo Chico for $220 million in September.

— Anheuser-Busch InBev. In August, the brewer bought organic energy-drink maker Hiball Energy, whose portfolio includes Alta Palla sparkling waters and juices.

The giants are chasing a small brand that has made a big impact: LaCroix, known for its fruit-flavored sparkling waters in pastel-colored cans.

LaCroix is owned by Fort Lauderdale-based National Beverage, which also has Shasta sodas and Everfresh juices. (The company’s cheeky stock symbol is FIZZ.)

The company’s net sales for the second quarter, ending Oct. 28, were $244.1 million, up from $203.1 million from the same time the year before.

Renewed interest in sparkling water shows how the industry is trailing consumers looking for alternatives to traditional highly sweetened drinks. They are being lured away from soft drinks by the growing interest in eating — and drinking — healthy. Also, there are concerns about obesity and rising prices as more cities institute taxes on sugary drinks.

The potential for growth is bubbling to the top now. Nearly 574 million gallons of sparkling water — $6.1 billion worth — were sold in the U.S. in 2016, the last full year of data, according to Beverage Marketing. And that figure was expected to reach 790 gallons and more than $8.5 million in 2017. Compare that to about 263 million gallons and $2.6 billion in 2011.

“Bottled water overall as a category has been on this remarkable growth juggernaut since the early ’90s. Mostly, that’s been driven by still water, but in recent years, sparkling water has caught fire,” Beverage Marketing’s Hemphill said.

Bottled water overtook carbonated soft drinks as America’s favorite drink for the first time in 2016 — 12.8 billion gallons sold versus 12.4 billion, Beverage Marketing reported.

But sparkling bottled water is viewed as more premium than non-carbonated water, says analyst Stephen Rannekleiv, who covers the global beverage market for Rabobank.

“It’s something a little different than regular tap water or anything else you (buy),” he said. “It’s a higher quality experience.”

That ensures a perky outlook for bubbly water.

“2017 is the 13th consecutive decline in the volume of carbonated soft drinks,” Hemphill said. “We think sparkling (water) has a very bright future.”

Zlati Meyer, USA TODAY

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