News Analysis |
Coca-Cola is making massive changes to Diet Coke. The soft beverage cult icon Coca-Cola had news for its fans yesterday when it announced a revamp in Diet Coke’s design and that it is rolling out a new marketing campaign for the beverage.
The company also announced the launching of new Diet Coke flavors, including Feisty Cherry and Twisted Mango, all the while keeping the classic Diet Coke unaltered.
With the new brand revamp, the company hopes to manage the best of both worlds, avoiding the fury of loyalists while making some necessary changes to finally grow Diet Coke’s sales.
Diet Coke has struggled in recent years, with sales dropping 1.9% in 2016. Diet Coke’s sales slump had been denoted as the weakest link in the company’s cola lineup. The brand’s sales by volume declined in the mid-single digits last quarter. Moreover, executives said that Coke Zero Sugar’s success (launched in the US in 2017) is cannibalizing Diet Coke and Coca-Cola Classic sales in certain markets.
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However, Coca-Cola remained paralyzed from significantly altering Diet Coke, in the way it tweaked Coke Zero, due to its dedicated but gradually declining fan base.
The CEO of the company had denied making any changes to Diet Coke. “I don’t think we’re likely to change Diet Coke,” CEO James Quincey said in a press briefing in 2017. “It has a large following; Diet Coke will be Diet Coke for a good while longer”.
Coca-Cola has resisted a similar reformulation for Diet Coke due to concerns over alienating loyal fans of the beverage.
A year later, the beverage giant has announced that it is rolling out modernized Diet Coke packaging and a new ad campaign, as well as new flavors. The classic Diet Coke will remain unchanged, but it will be joined by four new flavors: Ginger Lime, Feisty Cherry, Zesty Blood Orange, and Twisted Mango.
Coca-Cola said in a press release that it spent two years developing the new flavors and bottles, testing more than 30 new Diet Coke flavors. Despite being a zero-calorie drink, Diet Coke has struggled to win over many health-conscious consumers.
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People conscious of their health are increasingly cutting sugar out of their diets, meaning that they’re drinking less of sugary sodas. Increasingly, Diet Coke doesn’t fit health-conscious customers’ needs. While Coke Zero Sugar saw a sales bump by very clearly advertising that it doesn’t contain sugar, many customers remain suspicious of Diet Coke’s use of artificial ingredients.
However, after the new recipe rolled out in the US, unit case volume doubled compared to the prior quarter. In the UK, where the Coke Zero Sugar rollout began in 2016, growth continues in the double-digits.
“Diet CSD [carbonated soft drinks] sales were supposed to be the solution to the industry’s calorie dilemma,” Monica Kvamme, a consultant at Zenith Global Ltd, said at Beverage Digest’s Market Smarts conference in December, a publication reported. “But, that was short-lived, as diet sales peaked in 2005 and have been falling ever since.” Since 2005, diet soda sales have dropped a whopping 34%.
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With the brand revamp, Coca-Cola is attempting to replicate the success of its Coke Zero relaunch in 2017. In August, Coca-Cola stopped selling Coke Zero in the US, replacing it with a beverage with a different recipe, design, and name: Coke Zero Sugar. The company previously made a similar change in other countries, including the UK.
However, Coca-Cola remained paralyzed from significantly altering Diet Coke, in the way it tweaked Coke Zero, due to its dedicated but gradually declining fan base.
There was an immediate backlash to the announcement. However, after the new recipe rolled out in the US, unit case volume doubled compared to the prior quarter. In the UK, where the Coke Zero Sugar rollout began in 2016, growth continues in the double-digits.
Coca-Cola has resisted a similar reformulation for Diet Coke due to concerns over alienating loyal fans of the beverage.
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With the new brand revamp, the company hopes to manage the best of both worlds, avoiding the fury of loyalists while making some necessary changes to finally grow Diet Coke’s sales.