Focus - Colas look for healthy lift
Colas may be the most popular type of soft drink in the world but they have historically been high in sugar, and are among the first products mentioned when rising obesity levels are being discussed. However, cola producers are launching healthier variants which, Annette Farr writes, could see cola throw off its unhealthy image.
It is somewhat ironic that Coca-Cola, a drink first sold back in 1886 as a tonic for a variety of maladies, has latterly been tagged as 'unhealthy'. The high level of sugar used in Coca-Cola (35g in one 330ml serving) and other regular colas has been accused of contributing to rising obesity levels and dental damage.
Yet cola remains the world's most popular type of soft drink and Coke is the number one brand. In the UK, cola has a 21% value share of the soft drinks market, outperforming pure juices (17%) and bottled water (8%). Coca-Cola is the top take-home brand and Pepsi is the fifth. Cola accounts for 51% of the carbonates category by volume.
Nevertheless, cola has been under pressure as consumers seek out healthier beverages. Both Coca-Cola and PepsiCo have responded with the introduction of a plethora of diet, low-cal and zero-cal offerings, range extensions and functional variants such as Diet Coke Plus and Pepsi Tava.
Of the diet variants, the full-bodied Coca-Cola Zero and Pepsi Max have boosted the category and continue to compete for dominance. Zero is now available in 81 countries and has, according to Euromonitor International, increased its global volume share of the carbonates market to just shy of 1%. Meanwhile, this summer PepsiCo ran a substantial sampling campaign across the Middle East, targeting youth, with the slogan 'MAX your life - 100% taste, 0% sugar'. More than 400,000 free cans were distributed, some 300,000 of them within Saudi Arabia.
Innovation continues for the Max brand. For example, in Finland a lime and mint cola variant called Pepsi Max Mojo has been launched. "It is low in calories and very much a summer drink," says Toni Rounas, marketing manager, PepsiCo Nordic Finland. "It will help strengthen our position as the leader in sugar-free cola beverages in Finland."
There's no getting away from it. A large swathe of the world's population simply likes the taste of cola. And this is the reason why, despite a stagnant carbonates category, new colas are being launched and emerging markets are being targeted.
Arguably, the most important of these is China where the age-old cola war between Pepsi and Coca-Cola - together they account for approximately 44% of the cola volume - was witnessed at the Beijing Olympics. To coincide with the event PepsiCo launched a red can, almost identical to the iconic Coke can, under the guise of featuring China's national colours. This was seen as a masterstroke by some analysts in a market where there is still all to play for. Euromonitor forecasts that the Chinese cola market will increase by 1.7bn litres by 2012.
In neighbouring Mongolia, one of the first tasks of Muhtar Kent, who took over as president and CEO of The Coca-Cola Company in July, was to officiate at the opening of a new US$22m Coca-Cola bottling plant in Ulaanbaatar. This will be the second and largest Coca-Cola plant in a country which Coke views as having vast potential. In 2002, a Mongolian consumer on average bought four Coca-Cola products per year. This year that has grown to an average of 67 beverages.
In the US and Western Europe cola growth is likely to centre on those colas which use all-natural ingredients. This summer's UK print ad campaign for Coca-Cola carries the message, "No added preservatives. No artificial flavours. 'The Real Thing' since 1886", as Coke seeks to tap into the current vogue for 'all-natural' drinks.
This is also the claim of new colas in the US, such as Virgil's Diet Real Cola, which targets consumers "looking to add natural beverage alternatives to their diet without having to sacrifice on taste". The drink contains herbs, spices and fruit oils from around the world, including the kola nut from Africa, clove bud oil from India and vanilla from Madagascar. Virgil's cola is sweetened with all-natural sweeteners stevia and xylitol.
Another new launch is Health Cola. Retracing its pharmacy roots, the drugstore chain Walgreen developed the cola using natural ingredients including extract of kola nut, the caffeine-containing nut of two evergreen trees of the cocoa family native to tropical Africa.
PepsiCo chose the UK as its global launch-pad for Pepsi Raw. Introduced exclusively to the on-trade in March, Raw was heralded as a premium cola made from natural plant extracts with no artificial colours, preservatives, flavourings or sweeteners. "It has been a great success, tapping into consumer desire for more natural products," says Ounal Bailey, senior brand manager at Britvic. "Pepsi Raw has achieved good distribution and we are looking forward to rolling it out to the take-home channel in due course."
Meanwhile, Red Bull has entered the cola arena with Simply Cola. Launched in April in the UK, Austria, Switzerland, Italy, Ireland, Russia and the US (Las Vegas), Simply Cola was said to fulfil Red Bull founder Dietrich Mateschitz's vision of producing the best tasting cola ever. It is marketed on the strength of it being the first cola to use 100% all-natural ingredients. The drink, made to a recipe using the original kola nut and the coca leaf, contains no preservatives, artificial colourings or flavours.
Performance to date is encouraging, Red Bull reports. "It's been a great start for Red Bull Cola," says Red Bull sales director Andy Shaw. "We've sold over 5m cans just four months since launch. On the back of this year's Red Bull Air Race in London, almost one and a half million cans sold in July alone. With consumer awareness of Red Bull still at a high, we're in a great position to continue to build on this initial success."
PepsiCo has said that it plans to launch three new drinks under the Pepsi and Mountain Dew brands sweetened with natural sugar....
Colas may be the most popular type of soft drink in the world but they have historically been high in sugar, and are among the first products mentioned when rising obesity levels are being discussed. ...
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The Coca-Cola Company's board has approved its quarterly dividend of 41 cents per common share. This is equivalent to an annual dividend of US$1.64 per share, up from $1.52 per share in 2008....
[UPDATED 25/02/2009] PepsiCo has altered some of its plans to re-invest the US$1.2bn in cost-savings from its restructuring programme in a bid to provide greater value for consumers during the economi...
The Pepsi Bottling Group said that while near-term economic difficulty would hurt drinks sales, the company would position itself to capitalise once the economy improves....
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