Pepsi hopes to win back customers in the U.S. with a compromise.
Some people don’t like the calories in regular soda, but loathe the taste of diet. So the No. 2 cola company in the U.S. is rolling out “Pepsi Next,” a mid-calorie drink that has about half the calories of regular Pepsi at 60 calories per can.
The cola, which is slated to hit store shelves nationally by the end of March, is Pepsi’s biggest product launch in years. The drink comes as people increasingly move away from sugary drinks to water and other lower-calorie beverages because of health concerns. It’s also an attempt by Pepsi to revive the cola wars against Coke and others.
Pepsi Next isn’t the first drink to try to hit the sweet spot between diet and regular cola. Dr Pepper rolled out its low-calorie Dr Pepper Ten, which has 10 calories. The company said the drink, which has sugar unlike its regular soda, helped boost its fourth-quarter sales.
But coming up with a successful “mid-calorie soda,” which has more calories, has been more challenging for beverage makers. In 2001, Coke rolled out “C2” and Pepsi in 2004 introduced its “Pepsi Edge,” both of which had about half the calories of regular soda. Both products also were taken off the market by 2006 because of poor sales.
“The problem was that consumers either wanted regular soda or a diet drink with zero calories–not something in between,” said John Sicher, editor and publisher of Beverage Digest.
Sales in the $74-billion soft drink industry have been fizzling out, with volume falling to 9.4 billion cases in 2010, down from slightly over 10 billion cases in 2005, according to Beverage Digest, which tracks the industry. But diet pop made up 29.9% of the carbonated drink market in 2010, up from 24.7% a decade earlier.
Market share for Coke, the top-selling brand in the U.S., dropped to 17% in 2010 from 20.4% in 2000, according to Beverage Digest. Diet Coke over that same time rose to 9.9%, from 8.7%.
Meanwhile, Pepsi had its share in the carbonated soft drink market fall to 9.5%, from 13.6%, while Diet Pepsi’s share remained steady at 5.3%.
PepsiCo Inc., based in Purchase, N.Y., said earlier this month that it plans to increase marketing for its brands by $500 million to $600 million this year. A centrepiece of that will be the company’s first global ad campaign this summer.