For US consumers accustomed to quaffing Coca-Cola Zero diet soda, the company has something new: Coca-Cola Zero Sugar.
The Atlanta-based soft drink giant, which also owns labels including Smartwater and Honest Tea, said on Wednesday the new Coke Zero Sugar will taste a lot like the regular Coke and marks “one of the biggest investments” it’s made since the 2005 Coke Zero unveiling.
Coke Zero fans took to social media on Wednesday to voice their worries that Coca-Cola is taking away a drink they like. But Coca-Cola is betting on the shift to help stoke growth in its mainstay business. Soda makers not only face revved up competition from startup brands, but their products are also part of the stagnant “center aisle” of grocery stores, where sales are not keeping up with outer aisle categories like fresh or prepared foods.
The current Coke Zero doesn’t have sugar. Renaming it “Zero Sugar” reflects the increasing pressure brands face to speak to consumers’ desire for what they perceive as healthier options.
Coke Zero Sugar “has demonstrated strong consumer appeal in Europe, Mexico and other markets, resulting in double digit global volume growth for the brand year-to-date,” said Coca-Cola CEO James Quincey, who replaced long-time CEO Muhtar Kent in May, on its Q2 earnings conference call Wednesday. “We're bringing it to the U.S. because we think it will do better and help the U.S. business grow. It’s about helping the zero-calorie part of the portfolio grow, which is linked to playing a role in tackling obesity.”
The packaging for the new Coke Zero Sugar is coming in “more of a red can,” and “with more of a red label” to help people “stay in the Coca-Cola franchise,” Quincey said.
Coca-Cola’s top rival PepsiCo also has rebranded a diet soda line as Pepsi Zero Sugar.
The rebranding is just one of many product-redesign investments big consumer packaged food companies make. Consumer Goods Forum, a global industry network that counts among members both Coca-Cola and PepsiCo, found that about 180,000 products globally were redesigned in 2016 to meet consumer demands for healthier diets and lifestyles. It said it’s not uncommon for up to a quarter of a company’s product portfolio to be “reformulated” within 18 months. With increased consumer demand for product ingredient transparency, CPG companies are also responding by calling them out on the packaging.
As they redesign existing products, brands also have counted on acquired labels. For instance, Hershey said Wednesday Q2 sales growth was partly driven by its 2016 purchase of barkThins snacking chocolate, which also calls out its non-GMO and Fair Trade sourced ingredients on the front of the packaging.