The Coca-Cola Company (NYSE: KO) recently announced a relaunch of Diet Coke, leaving the original formula unchanged, while adding four new variants aimed at the millennial generation: Ginger Lime, Twisted Mango, Zesty Blood Orange, and Feisty Cherry.
The company reports that it spoke to more than 10,000 people across the U.S. for input and tested 30 flavor combinations over a two-year period, eventually settling on the five flavors that received the most favorable consumer responses, pictured below:
Image Source: The Coca-Cola Company.
As you can see, the company has provided the brand with a refreshed contemporary design and sleek new 12-ounce can architecture. And it comes not a moment too soon. Consumption of carbonated soft drinks, and diet sodas in particular, been declining for years.
Last year, Beverage Digest reported that carbonated soft drink volumes fell in the U.S. in 2016, for the 12th consecutive year. Consumption of Diet Coke dropped 4.2%, although rival PepsiCo Inc.'s (NASDAQ: PEP) Diet Pepsi suffered an even steeper decline of 9.2%. Although industry statistics for 2017 won't be available until this spring, through nine months of 2017, Coca-Cola's own numbers show a 4% decline in Diet Coke's unit case volume in North America.
I've recently described both the strategic and financial tweaks Coca-Cola has implemented to revitalize its business against a backdrop of slumping soda sales. Regardless of new initiatives, brands like Diet Coke remain crucial to the company's success: Diet Coke still claims the title as the best-selling diet soft drink in the U.S. Thus, the company has much interest in revitalizing the brand, and at first blush, a revamp aimed at millennials makes perfect sense.
Though there seems to be a wrinkle in the logic.
The company hasn't reformulated Diet Coke, instead referring to this flavor extension a "brand restage." Diet Coke continues to be sweetened with aspartame and acesulfame potassium, as do the four new flavors. Aspartame has proven to be controversial over the years, and its presence is a primary reason sales of Diet Coke and rival Diet Pepsi have deteriorated in recent years.
Why wouldn't Coca-Cola take this opportunity in contemporizing its brand to reformulate Diet Coke with another sweetener, say plant-based, no-calorie stevia? Undoubtedly the organization is determined to avoid repeating PepsiCo's surprising experience with diet soda reformulation.
In 2015, PepsiCo replaced aspartame in Diet Pepsi with sucralose, after a similar two-year innovation cycle, which also included a massive polling of customers. Less than a year after the switch, amid loud consumer protests and a sudden plunge in sales of Diet Pepsi, the company made its original aspartame-sweetened version available again.