What are the prospects for Coca-Cola Life?

What are the prospects for Coca-Cola Life?

A year on from its South American debut, The Coca-Cola Co is taking Coca-Cola Life to the west. Richard Corbett considers the new brand extension, and its prospects for success.

Following news of a launch in Argentina and Chile in June last year, Coca-­Cola’s rather dramatically named Coca-­Cola Life, sweetened with natural sweetener Stevia is to make its European debut in the UK and in Sweden in the coming weeks.

It is difficult to assess Coca-Cola’s aspirations or ambitions for the product, but probably the best way to gauge its success will be if it is still on the shelves in five years’ time. If it works in the UK and Sweden, then we can expect to see it in more markets across Europe.

To all intents and purposes, Coke Life is a mid-calorie soda. That worries me.

A can of Coke has just short of 140 calories: the new Coca-­Cola Life has 89. That is little more than a third less. Coca-­Cola’s mid-calorie C2, launched ten years ago, was said to be the most supported since Diet Coke in the early-80s, but the drink barely stayed in the market for three years.

Around the same time, PepsiCo's mid-­calorie Pepsi Edge helped to prove that it was the mid-calorie concept, and not necessarily the product, that was the issue. Edge lasted even less time in the market. In fact, if PepsiCo's latest mid-calorie introduction, Pepsi Next, proves successful it will be third time lucky for Pepsi, which can also boast the ill-feted launch of the 70 calorie Pepsi XL in the 90s.

Although I have not yet tasted either drink, I'm prepared to guess that Coke Life and Pepsi Next will not taste as good as the sugar-sweetened originals. Consequently, any purchase will generally be a ‘distress purchase’, where the drinker would rather have the sugar-sweetened original but, for lifestyle reasons, has decided they ought to be drinking the lower-calorie alternative. I would identify the problem for mid-calorie sodas is that the drinks are simply not low enough in calories to justify the downgrade in refreshment pleasure; there is no half-way house.

The success of Coke Zero and Pepsi Max will make it even harder for a mid-­calorie cola like Coke Life or Pepsi Next to succeed. In Sweden, Pepsi Max already outsells regular Pepsi by around two to one. A good taste and a more masculine appeal have helped both Pepsi Max and Coke Zero to capture the ground that a mid-­calorie cola would hope to take. The popularity of Coke Zero and Pepsi Max means that the opportunities are significantly less pronounced for mid-calorie colas than when they flopped a decade ago.

In both Sweden and the UK, there are also likely to be issues over shelf space. With space at a premium, Coke Life will have to compete with a plethora of cola alternatives to get listed. Retailers will have to choose between regular Coke, Coke Light/Diet, Coke Zero, Pepsi regular, Pepsi Max and maybe Cherry Coke, Vanilla Coke or even Pepsi Twist. Adding room for Coke Life will prove challenging.

In both Sweden and the UK, Coke Zero has been a beverage success story, but even this brand initially struggled to achieve widespread listings. Many retailers, particularly the independents and convenience stores, took some persuading to list Coke Zero as well as Diet/Light Coke. This ensured that the progress of Coke Zero was slower than it might have been. Many retailers will take some convincing, then, to find even more space for a new lower-calorie alternative.

If we discount the shelf space factor, and consider that Coke Life is actually positioned more as a stevia-sweetened alternative than as a mid-­calorie soda, then the prospects do look better. Stevia is a good news story and this will generate some consumer interest, particularly in Sweden.

Awareness of stevia is higher in Sweden than in the UK, and Swedes have been exposed to several high-profile brands adopting stevia that have been backed with substantial marketing support. Fun Light Green and ProViva 50 have gained widespread exposure that has helped to spread the stevia message.

Fun Light Green was developed specifically to address concerns over the use of artificial sweeteners and Coke Life could also be well-placed to exploit these same fears. There is still a steady trickle of negative publicity over aspartame and other artificial sweeteners, and if these blow up into more of an issue, then Coca-­Cola will be pleased to have Coke Life in its locker to respond to any sudden shift in consumer demands.

The double-digit growth in 2013 and 2014 of existing artificially-sweetened, low-calorie carbonates in Sweden might suggest, however, that the issue is not as important now as it has been previously.

We will have to wait and see whether Coke Life is still on the market in five years time but, whether it is or not, its development and introduction does make all the right noises to appease the vociferous lobbyists around the world demanding regulations and taxes on soft drinks.

Based on this fact alone, Coke Life is already a success.

Expert analysis

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