Mid-Calorie Soft Drinks: Who Exactly Is Their Market Audience?

LOS ANGELES , August 1, 2012 () – Mid-calorie soft drinks have a challenge in front of them. Personally, I have a hard time understanding their target audience. There are two types of soda drinkers out there: regular and diet. And honestly, I can’t see either type wanting an in-between.

Let’s start with regular-soda drinkers. They drink regular soda because they hate the taste of diet, pure and simple. As a result, they’re willing to accept the calories. And here’s a little perspective about the concerns of artificial sweeteners: Regular-soda drinkers made their choice long before health officials started going on and on about the potential health effects of aspartame. Ask any person who drinks Coke why they don’t drink Diet Coke, and they’ll always tell you that it started with one thing: Taste.

So given this, there’s only one reason why a regular-soda drinker would make the permanent switch to a mid-calorie product: If it tasted the same. Does it? Most people will tell you no. And if that’s the case, you’re not going to get a regular-soda drinker to switch with only the promise of half the calories.

Diet-soda drinkers are easier to explain. They drink diet because they want the taste of soda without the calories. So even if they like the taste of a mid-calorie beverage, they’re not going to like it enough to accept the extra calories. As I write this, I have a glass of Diet Dr. Pepper by my laptop. I tried Dr. Pepper Ten not too long ago and thought one thing: This sure ain’t worth 10 calories.

PepsiCo Inc.’s Pepsi Next product—a 60-calorie/serving soft drink beverage—illustrates the tough road that mid-calorie sodas travel. According to Symphony IRI’s sales data for the four weeks ending on June 10, Pepsi Next’s volume share fell to 0.6%, down from 1% month-over-month in May. Also according to a Wells Fargo survey, while Pepsi Next has strong distribution within the convenience store channel—94% of retailers say they carry the product—most say that the beverage is generating low repeat sales. Additionally, no retailer surveyed by Wells Fargo said that Pepsi Next was generating strong repeat sales.

Soft drink companies are victims of their own success. They’ve done such a great job of building out the regular and diet markets that there’s been no outcry for a third market—the mid-calorie market—to be created. And until that outcry comes, such beverages are going to languish in mid-calorie no-man’s land.

Nevin Barich is the Food & Beverage analyst for Industry Intelligence Inc., a market intelligence and information management firm based in Los Angeles. Nevin also routinely has a bottle of diet soda by his side when doing his work. He can be reached at n.barich@industryintel.com

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