As brands across the beverage spectrum pick up on the trend of better-for-you formulas, one of the challenges will be whether a product is truly better for you. Marketing will get a brand only so far before consumers catch on to the truth.
Beverage makers would be wise to heed lessons being learned by the world of diet carbonated soft drinks. For years, diet CSDs traded on the promise of fewer calories and, thus, fewer pounds packed onto consumers. In 2013, that promise hit the fan as online campaigns suggested the most common sweetener in the category—aspartame—is the source of numerous health issues, and then reports arose stating that diet sodas not only pack on pounds but also can actually produce a larger waistline than sugar-sweetened beverages.
The results: Diet Coke’s sales volume fell 3% in 2013, and Diet Pepsi’s fell 6.2%.
To date, the Food and Drug Administration says aspartame may be safely used in foods as a sweetener, and the American Cancer Society has said that most studies using people have found that aspartame is not linked to an increased risk of cancer.
But perception is reality, analysts says. “Starting in February 2013, we saw a marked increase in searches [online] for the term aspartame,” according to Nik Modi of RBC Capital Markets. “And just as consumer interest in aspartame peaked, diet-CSD trends began to worsen, while regular CSD trends remained [the same].”
More recently, the outcry against diet CSDs is based on reports that they can cause weight gain by changing a consumer’s biology. A December article in Time magazine dubbed diet soda “the ultimate hypocrite of the beverage world.”
Soda makers have reacted with a plethora of low- and mid-calorie product introductions: PepsiCo’s Pepsi True, Coca-Cola Co.’s Coca-Cola Life and Dr Pepper Snapple Group’s (DPSG’s) TEN line extensions. While results for TEN have been disappointing, the company is also testing “naturally sweetened versions” of Dr Pepper, 7UP and Canada Dry, each with 60 calories per 12-ounce can and sweetened with a blend of real sugar and the latest generation of stevia blends.
The bottom line: DPSG isn’t giving up on lower-calorie sodas.
“A big piece for all of us is educating the consumer that there is nothing wrong with these diet products,” says DPSG CEO Larry Young. “There is nothing wrong with aspartame. It’s one of the most tested food ingredients there is. So we’ve all got a lot of work to do, but it’s also going to give us an upside when we find the [magic] bullet.”
Losing Fizz
“[The year] 2014 marks the 10th consecutive year of volume declines for carbonated soft drinks, and we anticipate declines will continue,” says Hemphill of Beverage Marketing Corp. The news isn’t quite as bad in c-stores, where CSD sales have been down for only two years and were generally flat in 2014, according to IRI data.
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