Wellness a way to better soft drink sales: diet sodas still growing, while full-calorie colas see decline

DSN Retailing Today, Jan 24, 2005 by Mike Duff

Cadbury-Schweppes' new vitamin C-fortified 7-Up Plus is heralding a new era for carbonated soft drinks. The company is treating 7-Up Plus as the foundation of a new category--and is considering additional Plus entries--but it also is part of a trend to refashion high-profile carbonated soft drinks to reflect consumer-wellness considerations.

The big beverage producers are aware that wellness issues have pushed dollar sales of diet CSDs. Diet colas and lemon-limes have been advancing at around 4% annually while their regular counterparts declined in food, drug and mass outlets, excluding Wal-Mart, according to ACNielsen. Cadbury-Schweppes has seen diet CSDs lead sales, so it's hardly surprising that the company might further explore the demand generated by the nutritionally concerned. Hence, vitamin- and calcium-fortified 7-Up Plus.

Consumer research conducted by Cadbury-Schweppes showed the way to the new product, according to Frances Knipp, brand manager, 7-Up Plus. "Consumers are looking for easy ways to eat and drink better," she said. Providing a health benefit through a familiar product was consistent with what consumers were telling the company. The rollout has targeted adult women--with media, point-of-sale, Internet and sampling efforts--who then, as primary consumables shoppers, will introduce the product to other demographics.

While wellness is driving some consumers to add elements to their diets, others want more of nothing. In response, Coke may develop a new diet drink (possibly using the name Coke Zero) according to public reports. The company already has changed the name of nocal Sprite to Diet Sprite Zero. Pepsi has rechristened the no-cal version of its new lemon-lime soft drink Sierra Mist Free.

With many people avoiding specific "bad" things, Pepsi wanted to establish its Sierra Mist no-cal as a soft drink without--or free of--sugar, calories, carbs and caffeine.

"We saw it as a great opportunity to re-educate and re-engage diet consumers," said Pepsi spokeswoman Nicole Bradley.

The CSD shake-up may bring particular benefits to some retailers. In its new generation of prototype stores, Kmart, for example, has developed more demographically- and trend-focused merchandising that is tightly edited and key item-oriented, which means any highly-touted new product fits nicely. "It allows us to do more store and area special assortments that we didn't take advantage of before," said Peter Whitsett, Kmart co-chief merchant.