Cola war continues with Pepsi True launch
It seems the Cola Wars continue to expand across the calorie spectrum. Where Coke and Pepsi used to spar over full calorie soda (Coke vs Pepsi) and zero-calorie soda (Diet Coke vs Diet Pepsi, Coke Zero vs Pepsi Max), the two beverage giants now go to war over the middle. The contestants are Coca-Cola Life and Pepsi True, two sodas sweetened with sugar and stevia, with less calories, and green packaging. That may be where the similarities end in this round though, because this iteration is very different from prior rounds. Their product launch tactics differ greatly, and this particular fight appears to be highly contained with the United States.
What some people may forget is that Pepsi already has a stevia-sweetened mid-calorie soda on the market – just not in the U.S. Remember Pepsi Next? The American Pepsi Next contains artificial sweeteners whereas other countries with Pepsi Next have a stevia-sweetened version. Unless Pepsi decides to discontinue the existing stevia-based Pepsi Next everywhere, this Cola War will only exist in the U.S. And it is likely that the Pepsi True launch is primarily relevant to Americans given Pepsi Next’s presence elsewhere. So in effect, this should be termed more of a Cola “battle” rather than a Cola “War”. Pepsi Next against Coca-Cola Life in markets outside the U.S., while the U.S. battle will be between Pepsi True and Coca-Cola Life.
Both companies are also more cautious in their launch approach. Coca-Cola Life has experimented in multiple countries outside the U.S. first to measures its market viability, and only recently started rolling out in U.S. regions this past August. The American rollout isn’t national and they have yet to provide marketing support welcoming Coca-Cola Life to America. Pepsi True is taking a similarly conservative approach by not even stocking this product in traditional channels. Pepsi’s mid-calorie soda variant is set to launch exclusively through Amazon, where shelf space is limitless, operating costs are lower, and product delivery does not come from their distributor network. After all, Pepsi distributors work with limited storage space and a delivery system optimized for sales and profitability; carrying Pepsi Next could mean sacrificing sales of other better-selling products. To satisfy American distributors, Pepsi indicated that they will reimburse distributors for Pepsi True sales in their regions.
It makes sense for both beverage manufacturers to take baby steps first. Launching anything in the mid-calorie segment has been challenging for over a decade. The 2004 introductions of C2 and Pepsi Edge marketing sucralose as a sugar alternative proved unsuccessful. The 2012 Dr Pepper Snapple Group TEN-calorie soft drink line-up hasn’t received marketing support to keep up its launch momentum. Earlier this year, Coca-Cola’s vitaminwater reverted back to its original formula after consumer complaints about its stevia formula. The beverage industry’s history is littered with more failures than successes when companies attempt to bring mid-calorie refreshments to the consumer. And as much as Pepsi Next could be deemed a global success, the results undoubtedly vary between markets.
Going forward, the road will only become more difficult. Consumer perspective toward mid-calorie soda in general has not been overwhelmingly positive. Taste is always the first consideration and most stevia-sweetened beverages contain a bitter aftertaste. Consumers have also persisted in choosing drinks that offer health benefits and less calories over mid-calorie soda. Regardless of consumption trends, soft drinks are still a significant part of the beverage landscape. Even though the Cola War has evolved, both Coca-Cola and Pepsi will find new frontiers to wage their battles.