Dr Pepper's Newest Mid-Calorie Offerings Won't Help Stem Softer Soda Sales In U.S.
LOS ANGELES, February 19, 2014
(Off The Menu)
– Mid- and low-calorie sodas in the U.S. just aren’t working. Though Dr Pepper Ten and Pepsi Next had moderate success when they were launched nationwide in 2011 and 2012, respectively, neither has ultimately helped its respective company turn the tide against softer soda sales in the country.
Based on this, it’s difficult to understand why Dr Pepper decided to release its own mid-calories offerings. The company recently announced that it would be selling 60-caloried canned versions of its popular brands. Recent history has already shown that such products ultimately won’t turn things around. Why would Dr Pepper 60 (my phrase for the product, not the company’s) be any different?
Let’s be clear: It’s not that the previous products were failures, per se. Both Dr Pepper Ten and Pepsi Next remain on the market, which is more than you can say for Coca-Cola’s “C2” launched in 2001 and Pepsi’s “Pepsi Edge” in 2004. Both of those products were taken off the market because of poor sales. But Dr Pepper Ten’s current sales are flat, while Pepsi Next’s sales are weaker after totaling $100 million following its initial launch. So consumers aren’t exactly flocking to purchase these products and they won’t flock to buy Dr Pepper 60, either.
Perhaps Dr Pepper should look at Coca-Cola, which is trying a different approach via its partnership with Green Mountain Coffee Roasters. Under the 10-year agreement, which includes Coca-Cola buying a 10% stake in GMCR for $1.25 billion, the companies will develop Coca-Cola brand soda and other beverages for GMCR’s at-home brewing system.
It’s too early to know whether Coca-Cola’s approach will work. But recent history already tells us that Dr Pepper’s approach will fail.
Nevin Barich is the Food and Beverage Analyst for Industry Intelligence. Email him here or follow him on Twitter here.
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