Diet Coke Offers Four New Flavors in Bid to Counter Slump -- WSJ
January 23 2018 - 3:02AM
Dow Jones News
By Cara Lombardo
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 23, 2018).
Coca-Cola Co. hopes four new flavors of Diet Coke and skinnier,
redesigned cans hitting U.S. shelves this week will lure back
lapsed soda drinkers and young people who have moved on to LaCroix
sparkling waters.
But initial consumer response has been mixed, with much of the
enthusiasm coming from existing Diet Coke drinkers and some
analysts saying the overhaul is a long-shot attempt to boost Diet
Coke's slumping sales.
"I am very much a Coke product purist, especially when it comes
to Diet Coke," said Ayana Lage, a 24 year-old writer from Fort
Lauderdale, Fla., who drinks one or two Diet Cokes a day. "The
chances of me branching out are slim to none."
U.S. sales by volume of the calorie-free beverage sagged an
estimated 4.3% in 2017, according to industry publication Beverage
Digest. Demand has been sapped by consumer concerns about
artificial sweeteners used in the drinks and a broad shift to
bottled waters. Diet Coke's sales volume in the U.S. has declined
every year since 2006, according to Beverage Digest.
Coca-Cola earlier this month unveiled four new flavors of Diet
Coke -- Zesty Blood Orange, Twisted Mango, Ginger Lime and Feisty
Cherry -- and slender 12-ounce cans with bright vertical bands of
color. Regular Diet Coke got a matching makeover, though the recipe
remains the same and it will continue to be available in
traditional cans.
The new lineup is entering a space occupied by both sparkling
water and other flavored no-calorie and low-calorie drinks,
including stevia-sweetened Zevia, Virgil's Zero from Reed's Inc.
and Dr Pepper Snapple Group Inc.'s Bai Bubbles. Coca-Cola also has
two of its own sparkling water lines, Dasani and the pricier Topo
Chico.
Sabina Bhasin, marketing manager of analytics firm Networked
Insights, said its researchers scanned social media networks, blogs
and other forums and found 89% of the mentions of the new drinks
were positive, with people particularly eager to try the Ginger
Lime flavor. They also noted there was confusion over why the blood
orange flavor wasn't just called "Zesty Orange."
Another analysis, this one of 15,000 social media posts, showed
a largely neutral stance toward the brand revamp but with slightly
more negative comments than positive, according to Bernstein
analyst Ali Dibadj. Mr. Dibadj said many of the positive comments
came from existing Diet Coke drinkers.
Since the new drinks don't address growing consumer aversion to
artificial sweeteners, Mr. Dibadj said he is skeptical about their
success. "Most new products in beverages-land are a flop," he said
in an interview.
A Coca-Cola spokesman said the company's portfolio includes
dozens of other drinks without artificial sweeteners. "The truth is
Diet Coke is a great-tasting brand and what all people have told us
in all of our research is 'Do not change the taste of Diet Coke,"'
he said.
The company, which in 1985 introduced a reformulated Coke with
disastrous results, said it spoke to more than 10,000 people across
the country and tested more than 30 flavor combinations before
settling on the final products.
Pablo Zuanic, an analyst with Susquehanna Financial Group, said
in a research note that U.S. soda sales have declined by $1.2
billion over the past five years, while sparkling water sales grew
by $1.4 billion, according to retail sales data from market
research firm IRI. He described Diet Coke's rainbow-colored cans
and playful flavor names as a "wink" at National Beverage Corp.'s
LaCroix, which he said accounted for almost half of sparkling water
growth in 2017.
The new flavored versions of Diet Coke are sweetened with a
blend of acesulfame potassium, or Ace-K, and aspartame, which the
company spokesman said was necessary to get the right type of
sweetness. Regular Diet Coke only includes aspartame. The company
already uses a blend of Ace-K and aspartame in Coke Zero Sugar,
which it rolled out in the U.S. last year.
Joshua King, 30, said he and his wife stopped drinking soda a
few years ago, giving it up while on a diet and realizing they
could do without it. Now they regularly buy LaCroix at Costco,
where they can get variety packs with rotating flavors.
Mr. King, a communications manager in Tallahassee, Fla., said he
would be open to trying the new Diet Coke flavors, but that it is
unlikely he would start regularly drinking soda again. "It has more
to do with the health decision for us," he said.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
January 23, 2018 02:47 ET (07:47 GMT)
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