The Coca-Cola Co. remained the top U.S. soft-drink company in 2007, but the overall market for carbonated beverages fell for the third straight year, according to a Beverage Digest report Wednesday.

Atlanta-based Coca-Cola sold 4.2 billion cases of carbonated beverages in the United States in 2007 for 42.8 percent of the overall market.

Chief rival PepsiCo Inc., based in Purchase, N.Y., was second with about 3.1 billion cases, or 31.1 percent of the market. Volumes for both Coca-Cola and Pepsi slipped 2.7 percent.

The overall U.S. carbonated soft-drink market fell 2.3 percent to 9.9 billion cases in 2007.

"The main cause is that consumers are beginning to migrate toward other kinds of beverages," said John Sicher, Beverage Digest editor and publisher.

Consumers are buying more non-carbonated beverages, such as teas and waters, Sicher said. Within the carbonated market, energy drinks and some diet brands are doing well, he said.

Hansen Natural, Red Bull and Rockstar, which offer energy drinks, increased volumes at double-digit rates, but each company was still below 1 percent in market share.

Among the top 10 selling brands, only Pepsi's Diet Mountain Dew and Cadbury Schweppes' Diet Dr Pepper increased volume.

Pepsi and Coca-Cola have both been adding non-carbonated beverages to broaden their portfolio. Coca-Cola bought last year Fuze, a juice and tea line, and Glaceau, the maker of Vitaminwater and Smartwater.

"A very big challenge for them is figuring out how to replace that lost volume quickly enough to grow their business," Sicher said.