Soft drink innovations
address health concerns
Brands introduce new products and marketing
Brand leaders introduced new
products, packaging innovations
and marketing strategies to build
sales, despite the consumer health
concerns that challenged the soft
drinks category worldwide.
Avoidance of artificial sweeteners or
chemical ingredients slowed consumption
of diet colas and energy drinks, although
most consumers regulated their intake
instead of rejecting soft drinks completely.
In the US, Pepsi reclaimed the number
two spot in volume consumed, having
ceded it to Diet Coke in 2010. Pepsi now
ranks in between Coke and Diet Coke
in consumption, according to the trade
publication Beverage Digest.
Greater awareness of health and obesity
issues also touched growing markets like
China, India and even Mexico, where cola
has been a popular beverage for a long time.
Sensing a possible opportunity, smaller
brands introduced craft cola drinks
that emphasized naturalness, although
the calorie count could be significant.
Meanwhile both Coke and Pepsi updated
their respective strategies.
Coca-Cola unified four Coke variants under
the masterbrand and revised its "Open
Happiness" slogan to "Choose Happiness."
The strategy attempts to sustain the brand
by embracing consumer concerns and
Pepsi, which refreshes the brand with each
successive generation, launched an updated
version of the "Pepsi Challenge," featuring
contemporary entertainment and sports
stars on social media.
While working with regulators and adjusting
product ingredients, the major brands also
took steps to protect brand reputation with
acts of positive corporate citizenship, such
as revising manufacturing and supply line
practices to become carbon neutral.
Coke introduced Coke Life in the US and
UK, having launched it first in Latin America.
The brand attempts to satisfy consumers
seeking a mid-calorie cola without artificial
Soon after the introduction of Coke Life,
Coca-Cola announced plans to unify its
four Coke variants – Coke, Diet Coke,
Coke Zero and Coke Life – under the Coke
masterbrand, starting in the UK.
Coke Life derives its sweetness from
a blend of cane sugar and extract
of the stevia leaf. Pepsi launched
its version of a stevia-sweetened
cola on Amazon, in an effort to
target consumers who might prefer
a naturally sweetened mid-calorie
drink. Called Pepsi True, the drink also
comes in a green can.
In another effort to address health
concerns, Coke introduced a milk
product. A joint-venture brand called
Fairlife, the milk is positioned as a
healthy and premium drink, produced
on dairy farms that use sustainable
practices. It fits with Coke's entry
into other beverages, such as teas,
coffees, juices and waters. Like some
of these other entries, Fairlife will not
be branded as Coke.
In China, colas experienced increased
competition from milk drinks that are
sometimes carbonated. Chinese consumers
are concerned not just with reducing
sugar, but also with increasing nutritional
value. Juices are growing in popularity with
Chinese consumers for that reason.
Health concerns also drove an increased
interest in tea drinks. The heritage Lipton
brand, owned by Unilever, appeared in the
BrandZ™ Soft Drinks ranking for the first
PepsiCo cross-marketed its portfolio of
snack and beverage brands. In one example,
it packaged Mountain Dew and Doritos
together as a "Dew and Doritos" promotion
intended for noshing video gamers.
Connecting with the food brands in the
PepsiCo portfolio enhances the Pepsi brand
to consumers and also improves the overall
corporate image, positioning PepsiCo more
like a consumer products conglomerate
than a pure beverage company.
Pepsi marketed numerous flavors of its
Tropicana orange juice brand to reach more
consumers and to expand occasions beyond
breakfast. Pepsi created a breakfast occasion
when it introduced Mountain Dew Kick Start, a lightly carbonated energy drink with juice.
In China, Pepsi created a digital campaign
connecting the Chinese New Year, a time
for family reunions, with a campaign called
"Bring Happiness Home".
Coke and Pepsi also attempted to build
more occasions and gain share in food
service and vending. As vending machines
become digitized, they enable the brands
to make the experience more interesting
and engaging or playful. The machines
also become another point for interacting
with consumers and collecting customer
information, potentially personalizing
Responding to trends
To exploit the interest in personalization
and experience, both Coke and Pepsi
experimented with countertop machines
for making cola drinks at home, Coke in
partnership with Keurig, and Pepsi with
SodaStream. Both brands face a similar
challenge – achieving taste consistency.
Pepsi introduced its own craft cola called
Caleb's Kola, to counter the influence of
craft colas, which offer local provenance
and genuineness, although the calorie
counts – the prices – can be higher than
Pepsi or Coke.
Caleb's Kola comes in a glass bottle and
is named for the inventor of Pepsi Cola.
Ingredients include natural sugar and Kola
nut extract. The stealth entry contains no
Both Coke and Pepsi offered drinks in
smaller bottles, in an effort to provide
a refreshing indulgence but limit the
calorific impact. While the strategy doesn't
boost consumption, higher margins
help profitability at a time of declining
consumption. Per capita consumption of
carbonated soft drinks declined to 674-eight
ounce servings per year, the lowest level
since 1986, according to Beverage Digest.
Sprite and Fanta, Coca-Cola brands that
offer a carbonated juice-flavored alternative
to cola, both increased in US volume
according to Beverage Digest. So did
two brands pitched to younger drinkers,
Mountain Dew and the energy beverage Red
Bull, which owns a Formula One team and
continues to create content associating the
brand with extreme sports.