The View from A Farr – Sparkling comeback
Coca-Cola has decided to refer to carbonated soft drinks (CSDs) as 'sparkling beverages' in all its communications, at a time when major soft drinks producers are looking to address the unhealthy image and declining sales of fizzy drinks with healthier product launches. Annette Farr assesses their chances of success.
What will it take to restore carbonates to their former glory? Surely it can't be as simple as changing what we call fizzy drinks from 'carbonates' to 'sparkling' beverages, but Coke's decision to ban the c-word is an interesting development and, seen as part of an evolution in the soft drinks market, a significant one.
The trend towards healthier and functional products is gathering pace, and having originally been a feature of the still drinks market it is now a key development area in the carbonated category.
In the US, two recently announced new carbonated drinks from Coca-Cola and Pepsi Cola - Diet Coke Plus and Pepsi Tava - have created what is being dubbed as a new category of 'enhanced sparkling beverages'.
Forming part of an intense period of new product activity by the two rival cola giants, these two new offerings are being promoted to the health-conscious consumer.
In the past two years, we have seen a number of new diet, low-cal and zero calorie variants, along with new cola flavours. Amongst others, Coca-Cola has unveiled Diet Coke Sweetened with Splenda, Coke Zero, Cherry Coke Zero (a new extension of the Zero range), Diet Coke with Lime and the coffee-flavoured Coke Blak.
From Pepsi, we have seen the introduction of Diet Pepsi Max, various diet versions of Mountain Dew and the Jazz line in Black Cherry French Vanilla, Strawberries and Cream and Caramel Cream flavours.
Not all of these, however, have been successful. In 2004, both companies launched low-cal and mid-cal colas with half the calories of regular colas. Pepsi has since withdrawn its Edge reduced-calorie drink and Coca-Cola's C2 is also being phased out.
The Diet Coke Plus drink is calorie-free with added vitamins and minerals. It is being rolled out across the US this month. "Consumers, including Diet Coke drinkers, are increasingly looking for more beverage options, and we wanted to offer them the convenience of a calorie-free beverage that is a good source of several essential vitamins and minerals, and one that delivers on the great taste that they have come to expect from us," said Katie Bayne, senior vice president, Coca-Cola Brands, Coca-Cola North America.
The forthcoming launch of Pepsi Tava was announced last October. Aimed at the baby boomer generation, the line is a caffeine-free, vitamin-infused carbonated drink. Tava (sounding ominously like kava, the mind-relaxing Oceanic plant that is pounded into a drink and used on ceremonial occasions) is one step ahead of Coca-Cola's Plus on the functionality front since it contains chromium, a mineral which is said to boost a person's metabolism and thus burn off more calories.
If these two brands work well in the US it is likely that they will receive global introductions in the same manner as Pepsi Max and Coke Zero.
At the heart of all this new product activity is the need to bring carbonates back into profit and popularity. In the US last year, according to Beverage Digest, volume sales of Coke Classic fell by 2% to 1.8bn cases and Pepsi dropped 2.5% to 1.1bn cases.
In the UK, despite falling volumes and the negativity surrounding carbonates' unhealthy image and obesity issues, value has stayed robust with diet and sugar-free brands taking a larger share of trade. But non-carbonated drinks continue to grow faster than carbonates.
Coca-Cola's CEO Neville Isdell is convinced that growth lies in carbonates, encouraged no doubt by the success of Zero. Since its launch in June 2005, this so-called 'bloke coke' is now being sold in 14 countries. Isdell told analysts at a recent conference that diet sodas, with low or no calories are indeed a health conscious choice. ''Diet and light brands are actually health and wellness brands," said Isdell.
It is likely that Diet Coke Plus and Pepsi Tava will be viewed with some scepticism and scrutiny from the health sheriffs. When Cadbury Schweppes introduced the first fortified carbonate 7-Up Plus in the US it carried a label declaring the drink '100% natural'. Since then it has had to change the description to '100% natural flavour' after complaints that high fructose corn syrup did not qualify as a natural ingredient.
Already Mike Adams of the Consumer Wellness Center in the US is reported to have said of the new drinks that "fortifying unhealthful beverages with synthetic forms of vitamins does not magically transform them into healthful drinks".
As already mentioned, the latest news from Atlanta is that Isdell wants the words 'carbonated soft drinks' dropped from all communications in favour of 'sparkling beverages'. At the same time, Coca-Cola is revamping its North American operations into three business units: Sparkling Beverages, Still Beverages and Emerging Brands. Sparkling will be responsible for the best-selling Coke Classic, all other carbonated drinks and energy drinks.
So will losing the stigma attached to the word 'carbonates' in favour of 'sparkling' work? Certainly 'enhanced and sparkling' will appeal more to today's health-conscious consumer than 'sweet and fizzy'. If the drinks taste good, 'sparkling' might just be the answer and if a company of the size and power of Coca-Cola can't turn the carbonates image round then I doubt anyone can.
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