Coke Follows Pepsi, Entering Mid-Calorie Soda Segment
May 21, 2012 1 Comment
With the recent success of Dr Pepper Ten and Pepsi Next, there’s been some renewed buzz in the carbonated soft drinks category recently. Now Coca-Cola wants to get into the mid-calorie segment. BevReview.com has a few links to other articles where sources have confirmed that Coca-Cola will be launching Sprite Select and Fanta Select in five U.S. test markets (link here).
As the linked article notes, both Coca-Cola and Pepsi have tried mid-calorie products before. Both companies’ products failed to gain traction in the marketplace and were discreetly phased out from store shelves. Given the technological advances and the successful-so-far products of Dr Pepper and Pepsi, is it time for Coca-Cola to come in with another mid-calorie product? Will they succeed this time around? And why try this with Sprite and Fanta, not with the trademark Coca-Cola product itself?
One issue would be to first determine what is “mid-calorie” and how this type of product is unique from the consumer’s perspective. Arbitrarily, I’m defining this soda segment as with a limit of 70 calories per 12oz (355ml) serving, given Pepsi Next has 60 calories, and Sprite Select and Fanta Select will have 70 calories. Dr Pepper Ten only has 10 calories per 12oz serving, so they fit the mold (Note: Dr Pepper Ten has 10 calories in both a 12oz serving, as well as 10 calories per 8oz serving, click through link to understand how). Mid-calorie products are also categorized as those using natural sweeteners to bring the calorie count down below 70, featuring a combination of sugars, high fructose corn syrup, or some other form of sweetener in tandem with the natural sweeteners. The purpose is to balance out the taste curve: from the moment the liquid hits the palette, all the way to the after taste.
Given that mid-calorie soft drinks like Coc-Cola C2 and Pepsi Edge of the early 2000s did not have the technology or cost-efficiencies before to insert natural sweeteners, they failed to catch on in the marketplace. One decade later, the technology is in place , which makes it possible to give consumers a better-tasting (and better named) product. The generally positive feedback toward Dr Pepper Ten and Pepsi Next would seem like an opportune time for Coca-Cola to enter the mid-calorie soft drink segment. Similar to how Coca-Cola’s Dasani Drops may be entering the liquid flavor enhancers after Kraft’s MiO has tested the waters, Coca-Cola may have monitored the consumer reaction to mid-calorie products (BevWire’s article on the Dasani Drops piece can be found here). This lets Coca-Cola sit on the sideline to see what would happen without bearing the developmental costs until it’s been a proven success.
While it appears that these products have received positive reviews, it appears that Coca-Cola is still hesitant with this segment. These reservations makes the pilot testing with Sprite and Fanta that much more important. Coca-Cola would not want to put the trademark name on something that they don’t fully believe in, only to see it fail like last time. A second failure with this segment would have implications such as losing brand equity or showing that the soft drink manufacturer does not understand its consumers.
A factor that would aid in their success, as well as supporting the successes of Dr Pepper Ten and Pepsi Next are consumer trends. Consumer trends have shifted toward a stronger focus on health consciousness. No longer are consumers willing to sacrifice calories for taste. However, not all consumers are prepared to sacrifice taste for zero calories either, which provides the opportunity for the Pepsi Next, Dr Pepper Ten, and the impending launches of Sprite Select and Fanta Select.
In this regard, there would appear to be a market for mid-calorie soft drinks, albeit a small market for now. The consumer trends and the technological advances will help to make this a success this time around. If history does end up repeating itself, it would certainly guarantee that Coca-Cola will not be testing any more mid-calorie soft drinks.