New Product Development at Coke and Pepsi
In biotech labs across the world, Coca-Cola, PepsiCo, and their suppliers are racing to find a soda that tastes as good as the iconic colas, is sweetened naturally, and has zero calories. Globally, colas account for more than half of all sodas sold. The challenge for the $187 billion soft drink industry is giving consumers in developed markets the sugary taste they want without giving them the mouthful of calories they don’t. Concerns about obesity and health have led to nine years of falling U.S. soda consumption.
The soda giants can’t rely on existing diet versions of their namesake colas, as consumers are shying away from the artificial sweeteners they contain, including aspartame. Critics have blamed the ingredients—rightly or not—for everything from weight gain to cancer creating a marketing challenge for these organizations. Diet Coke is losing U.S. sales at 7 percent a year, almost double the rate of decline of American cola sales overall. So Coke and Pepsi are turning to science to save their cola businesses, which take in about two-thirds of the industry’s U.S. sales.
Researchers are focusing on finding new products such as sweeteners for a simple reason: That’s where almost all of a soda’s calories come from. The classic American cola is 90 percent carbonated water; the next most plentiful ingredient is calorie-laden sugar or high fructose corn syrup. A 12-ounce serving has 140 calories or more, as much as three Oreo cookies. But soda makers must be careful when changing sweeteners, because they also help provide the liquid’s taste and the sensation on the tongue and in the back of the throat that consumers expect.
Being able to position their products effectively as consumer behavior changes, will be one of the most important challenges cola marketers will face in the years ahead.
Source: Duane Stanford. “Scientists Are Racing to Build a Better Diet Soda,” Bloomberg Businessweek, March 19, 2015. http://www.bloomberg.com/news/articles/2015-03-19/coke-pepsi-seek-diet-soda-s-perfect-sweetener
Discussion Questions:
1. How do you think cola marketers should position their new diet drinks and sweetener products to appeal to consumers?
2. As consumer behavior evolves over the next decade, do you think it will be a more difficult challenge marketing traditional colas (Coke, Pepsi,etc.) or diet colas (Coke Zero, Diet Dr. Pepper, etc.)?
