Mid-Calorie Sodas Seem Destined to Fail—So Why Are Coke and Pepsi Launching Them?

Business Insider
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Aug. 22 2014 10:02 AM

Mid-Calorie Sodas Seem Destined to Fail—So Why Are Coke and Pepsi Launching Them?

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New products are soon to launch in the U.S.

Photo by Justin Sullivan/Getty Images

This article originally appeared in Business Insider.

For consumers who think that regular soda has too many calories and diet soda tastes weird, big beverage companies have started manufacturing what's known as "mid-calorie sodas." These sodas are destined to fail.

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As the name suggests, these products contain fewer calories than a regular can of soda. For example, "Coca-Cola Life," which was piloted in select South American markets and will hit the United Kingdom in September, has around 89 calories per can versus 140 calories in regular Coke. Life is sweetened with a combination of sugar and stevia leaf extract, a natural sweetener derived from the stevia plant (which some people think tastes bad).

Pepsi has also entered the mid-calorie market with Pepsi NEXT. In markets outside the U.S., Pepsi NEXT contains a blend of sugar and stevia. However, in the U.S. market the soda contains sucralose, an artificial sweetener sold as Splenda. PepsiCo has not responded as to why the ingredients in American Pepsi NEXT are different than other markets. We will update this post if we hear back.

Destined to fail?

According to beverage industry analysts, these mid-calorie sodas ventures haven't been successful.

"We believe stevia-sweetened Coke Life may not see a launch in the US, as we do not believe it has performed well in tests and consumers have not responded to mid-calorie colas (as shown by failures of Pepsi NEXT and Dr. Pepper TEN)," analysts wrote in a July 2014 report by CLSA, an Asia-based independent brokerage and investment group.

Paddy Spence, CEO of Zevia, a zero calorie soda brand sweetened with stevia and monk fruit that is gaining traction in the US market, agrees. He shared some of his ideas on the psychology of diet soda and why mid-calorie sodas are failing with us in an interview.

"Increasingly we look to the products we're consuming for functional benefits," Spence told Business Insider. The "functional benefit" of diet soda is that it has zero calories. He says there is tradeoff between taste and this functional benefit.

"In soda what we find is that people are looking for either a full calorie soda that is going to optimize taste or they're looking for a zero-calorie product," Spence says. "So why would you ever have something with the taste of a diet soda with 10 or 60 or 80 calories? To those consumers, it's kind of the worst of both worlds. That's why we've seen products in the mid-calorie space really not capture the imagination of consumers."

Then why?

Coke could have ulterior motives in rolling out Coke Life in the U.K. According to the CLSA report, mid-calorie sodas are being launched in the European market not because they will do well, but because Coke has promised the U.K. government it would to lower its average calorie count.

"In the UK, Cola-Cola is a signatory to the government's controversial responsibility deal, which aims to improve public health, and has committed the company to reduce the average calories per litre in its range of sparkling drinks by 5 percent by the end of 2014," according to the Guardian.

It's not likely Coke will get the same regulatory pressure from the U.S. government because of the large influence of the beverage industry.

We don't know if Coke Life will ever even get a chance at the U.S. market: A Coca-Cola spokesperson wouldn't give us a straight answer. They provided the following statement for an earlier published story: "As we continue to innovate and expand our portfolio to meet consumers' evolving needs and preferences around the world, we will explore the roll-out of Coca-Cola Life in other markets."

Katie Jennings writes about health for Business Insider.

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