PLANO, Texas -- Where the hallmarks of the carbonated-soft-drink category were once sponsorships and sale promotions, beverage makers have found it necessary to add two other strategies to their arsenals: sweeteners and packaging variety.
On the road to getting CSDs back on the path to unit-sales growth, these approaches have shown promise.
Small Packages
Most significantly, Coca-Cola, which began toying with package size four years ago, has recently seen success with its 7.5-oz. cans.
“Mini-cans increased by 15% in the fourth quarter [of 2014], and that's us following the consumer to smaller package sizes of the brands they love,” said Sandy Douglas, senior vice president of Coca-Cola Co., Atlanta, in a presentation in November.
Since their introduction, smaller sizes, including mini cans, have accounted for more than 60% of the volume growth in traditional Coke, execs said.
Ditto for PepsiCo.
“All those smaller packages and our business for the last eight quarters has improved dramatically,” said Al Carey, CEO of Americas Beverages, PepsiCo, Purchase, N.Y., during an earnings call in February.
Dr Pepper Snapple Group, Plano, Texas, admittedly has been slower to adopt new package sizes, but that will change soon.
“You'll see some of the smaller packages with our innovation coming out,” said CEO Larry Young. “We … want to make sure that we have the package lineup that the consumer wants out there. And we feel pretty happy with what we're seeing right now with our lineup.”
Where Dr Pepper Snapple has partnered with Coca-Cola and Pepsi bottlers, it too plays in the 7.5-oz. can arena. It’s also using 12-oz. slim cans to test mid-calorie versions of its key flavored-CSD brands, primarily in large-format retailers.
“We’ve been testing naturally sweetened versions of Dr Pepper, 7UP and Canada Dry since last year,” a spokesperson told CSP Daily News. “The product contains a blend of sweeteners including real sugar and stevia, and we’re expanding that test this year.”
A Bitter Problem
As delayed backlash against aspartame—It’s been used in diet sodas for decades—has harmed sales of diet sodas over the past five years, alternative sweeteners and a return to good-old sugar have become the latest product play for soda-makers.
Pepsi’s main entry in this arena was the October introduction of Pepsi True, a 60-calorie (per 12 ounces) version of its namesake cola sweetened with a blend of sugar and stevia.
Coca-Cola Co.’s most recent play was the January introduction of Coca-Cola Life, a reduced-calorie cola also sweetened with a blend of cane sugar and stevia leaf extract.
Meanwhile, Dr Pepper Snapple continues to invest in the TEN versions of its most popular CSDs introduced in 2012. While the TEN products—each with 10 calories per serving and sweetened with blend of high fructose corn syrup and aspartame—have seen tepid sales results, DPSG executives say the sales are incremental.
The TEN platform “continues to bring lapsed occasions back into CSDs,” Young said in February.
“A lot [of CSD drinkers] went to fruit juices, to sports drinks. Now with TEN, they're coming back to CSDs, and so we still remain very, very committed to the TEN platform,” he said.
Watch for the April issue of CSP magazine for a deeper look at beverage manufacturers’ efforts to get CSD sales back on track.
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