Pepsi thinks it has the answer: lob the first grenade in the so-called midcalorie-cola wars. It is developing a 53-calorie drink that is part sugar, part NutraSweet (a regular all-sugar cola has about 150 calories). Coca-Cola is said to be brewing up a version of its own. And consumers should prepare to be a ground zero for another marketing fire fight. Soft-drink makers are under siege: flavored seltzers, carbonated fruit drinks and bottled ice tea have made serious inroads into the cola makers’ core audience: teens and young adults. In fact, the U.S. market share for both regular and diet colas has fallen for five years in a row, to just below 60 percent, reckons Beverage Digest, a trade newsletter.
Pepsi Max is PepsiCo’s bid to plug back into the MTV and VH-1 generations. Introduced earlier this year in Canada, it targets a postcollege crowd that has apparently outgrown the sugar jolt of regular colas but doesn’t like the taste of diet drinks. Canadian TV spots for the drink feature smart-aleck characters from “Seinfeld” and “Cheers.” That’s in stark contrast to Jake’s Diet Cola, Pepsi’s last attempt at a sort-of-diet drink in the mid-’80s. The campaign for the 30-calorie soda spotlighted a Bartles & Jaymes-style town that wanted to keep the folksy drink all for itself. Pepsi won’t reveal sales figures for Pepsi Max, but a top marketing executive at the company hints that Pepsi Max may head for the United States later this year. “We think we have found the holy grail,” says a spokeswoman.
Perhaps Coca-Cola does, too. Marketing czar Sergio Zyman, nicknamed “the Aya-Cola” for his tempestuous style, has set up a special unit for new products; its first effort is said to be a midcalorie cola, referred to for now by insiders as Coke Light. The underlying strategy was outlined by CEO Roberto Goizueta several months ago, when he told analysts that Coke will soon roll out more short-lived products to hit on passing consumer fancies, as McDonald’s commonly does these days. (Remember the McRib sandwich?)
But trendiness could come at a price. The search for the next big drink has backfired for the soft-drink makers before. If New Coke was the fiasco of the ’80s. Crystal Pepsi and Coke’s Tab Clear have become the embarrassment of the ’90s. Touted as a way to capitalize on the vogue in colorless products when they were introduced last year, the clear colas have captured less than 2 percent of the $48 billion U.S. soft-drink market. And even successful new products carry a risk: cannibalization. While the soft-drink companies want to steal customers back from upstarts like Snapple, there’s a good chance they’ll only hurt themselves. “If Coke comes out with Coke Light, who says it doesn’t steal share from Coke Classic and diet Coke?” says Oppenheimer analyst Gabe Lowy. In other words, the cola warriors’ holy grail could turn out to be half empty after all.
