Are Soda Taxes a Threat to Packaging?

During this election cycle, five areas passed a "soda tax," including Boulder, Colo.; San Francisco, Oakland and Albany, Calif. — joining Berkeley as the fourth Bay Area city with a soda tax — and Cook County in Illinois, which includes Chicago. The three California locations and Cook County said "yes" to a one-cent-per oz. tax on sugary beverages, and Boulder's tax will be two cents per ounce, according to Forbes. Earlier this year, Philadelphia became the first major city to pass a similar soda tax, following Berkeley's lead. Since the Berkeley tax passed, the city saw a 21% drop in the drinking of soda and sugary beverages, as reported in a study UCBerkeley released in August. The study stated Berkeley also saw a 63% increase in water consumption (Oakland and San Francisco saw a 19% increase in water consumption) after the tax passed.

Packaging Perspective: While a handful of cities and counties adopting a soda tax is not likely to affect the beverage packaging market any time soon, it's clear that this is a growing trend that should not be taken lightly.

As Forbes contributor Bruce Y. Lee writes:

The soda industry may be approaching a crossroads. Soda consumption in the U.S. has been dropping over the past decade, and some nutrition experts such as Marion Nestle have drawn parallels between the soda industry and the tobacco industry, making the question “is soda the new tobacco?” more and more common. What, then, are the soda industry’s options?

If the soda tax legislation continues to spread — in areas large and small — the soda industry could take a serious hit from a decrease in sales, in turn affecting package printers invested heavily in the sugary beverage business. However, since water consumption was up in Berkeley following the tax, it may prove to be the perfect opportunity for package printers to segue into other bottled beverages if they haven't done so already.