Comment - Soft Drinks & Water - Slimmed-Down Low-Cal Sales a Cause for Concern

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The low-calorie soft drinks segment is struggling globally, which is ironic considering the pressure that has come to bear on full-sugar CSDs in recent years. This month, Richard Corbett considers how the sub-category can turn things around.

Back in 1982, the launch of Diet Coke was hailed by some as the launch of the decade, and it has certainly established itself as part of the consumption culture in markets all over the world. It changed the beverage landscape and rapidly became a ‘must-stock’ product on retailer’s shelves. While Diet Pepsi launched first, back in the 1960s, it was Diet Coke that started the ball rolling for the dramatic expansion of the low-calorie segment.

Today, however, that the ball looks to have stopped rolling.

According to beverage research agency Canadean, the ‘low-calorie’ segment at its high-water mark achieved a 15% share of the global carbonates market. In the US, that share almost reached a third while, in West Europe, low-calorie penetration stopped just short of a quarter of the region's CSD market. They are impressive numbers but, in 2011, the worldwide market for ‘diet’ products slipped into volume decline, replicating the US where diet fizzy drinks had actually been falling since 2006. 

The finger of blame has been pointed at consumers' perceptions of the sweetener aspartame and the fact that the trickle of allegations levelled at this sweetener is beginning to turn into a river, with inevitable consequences for consumption. Five years ago, most drinkers would not have heard of aspartame, but that is changing. Today, the low-calorie segment is exposed to an increasing amount of scrutiny. A Google search throws up a hideous assortment of ailments and side-effects that would put off all but the most loyal drinker.

The problem for the industry is that diet drinkers are not like energy drink consumers, who are relatively immune to any negative publicity. By their very nature, drinkers of diet products are more health-conscious and they scare easily.

There is, of course, the natural sweetener stevia and this new natural alternative will undoubtedly have a role to play in the future; the extent of which will depend on cost and taste.

The main response in the US, however, has been to fight fire with fire and contest the allegations head-on with a high-profile campaign to educate consumers on the ‘science’. The trouble with any publicity is that you draw attention to the issues and can do even more damage. Personally, I might be tempted to start by changing the name; aspartame does not exactly sound natural - or even palatable - but that’s the problem when scientists not marketers name products.

The problem for the industry is more deep-rooted than just falling sales. When the low-calorie segment share was rising, it was a significant counter to the vociferous health lobby. The industry could respond to their detractors that they were focusing on ‘light’ alternatives to the sugar-packed regular products, and could point to a widening availability of low-calorie products in their portfolios. Now that light products are losing share to regular drinks, there are the subsequent PR issues to face up to.

A new defensive strategy to the powerful voices ranged against them needs to be agreed among stakeholders in the industry, and that should more than likely centre on portion and unit size. The 33cl beverage can was adopted because somebody calculated that this was the maximum volume that somebody could drink in one sitting. This attitude should change, and the emphasis needs to shift from volume to margin.

Why not make the 25cl can the standard format for carbonates drinkers? Why not opt for a 1.5-litre bottle or even a 1.25-litre instead of a 2-litre bottle. When you go to the cinema, is it really necessary to have the option of buying a bucketful of cola that you could possibly fall into and drown? It just inflames the arguments against the industry.

If the light segment is faltering, suppliers will need to demonstrate they are being proactive in dealing with the accusation that they are contributing to the disease of our time, obesity. What better way of highlighting this than downsizing the unit sizes that they sell their drinks in?

One argument that is difficult to contest is that, when the low-calorie segment was in the ascendancy, there was limited evidence of an impact on the upward direction of the obesity line. In fact, one of the studies often cited to me - correctly or not - was one that showed that mice fed using artificially-sweetened food continued to eat because their brains did not pass on the message that their stomachs were full.

Maybe it is time for the industry to change tack, now that the low calorie segment is withering.

Sectors: Soft drinks, Water

Companies: Coke

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