Days before our May issue went to press, Pepsi announced, rather unexpectedly, that it was reformulating Diet Pepsi, substituting one sweetener, aspartame, with another, sucralose. Reams of copy and commentary followed the announcement, mostly about the controversy—real and perceived—around artificial sweeteners.
Some of it debated the risk Pepsi was taking in making such a move, harking back to when Coke decided it was reformulating its flagship brand and the resulting marketing disaster (eerily, Pepsi’s announcement last month was within days of the 30th anniversary of the New Coke debacle).
Is the Pepsi move a case of unneeded risk-taking? Pepsi explained it was making the move because consumer research indicated it should. “Diet cola drinkers in the U.S. told us they wanted aspartame-free Diet Pepsi and we’re delivering,” a Pepsi statement declared.
Within days of that announcement, PepsiCo chief executive Indra Nooyi was in a conference call with analysts discussing first quarter financial results. Responding to a question, Nooyi made an interesting statement: “We have never seen the consumer as confused as they are today. And I use the word ‘confused’ in a neutral way, not a negative way. If you had asked me a few years ago, people were moving to diet sodas. Now, they view real sugar as good-for-you. They are willing to go to organic non-GMO products even it has high salt, high sugar or high fat.”
All of this provided a great contextual point for our Beverage Almanac, our annual “beverage-world-by-the-numbers” feature in this issue. Volumes of traditional carbonated soft drinks, especially colas, have been falling for years, and the decline has been accelerating over the past few. Dramatic volume declines of diet soft drinks, for Coke as well as Pepsi, are a relatively new phenomenon.
But even 10 years ago, in this same data-based feature, we reported on indications that diet soft drinks were about to go soft. In the April 2006 issue we wrote: “For the past several years diet has been the one thing marketers have been able to consistently count on to keep the CSD market in positive territory, but the low-cal CSD segment proved to be much less of a tent-pole than in previous years.” We reported that diet soft drinks grew by just 2.2 percent in 2015, a sluggish performance following years of solid growth.
This is not to pick on Pepsi, or Coke, or even the fate of the soft drink market. After all, 10 years ago we reported that the beer market had slipped into decline, too. Most big beverage marketers, exemplified by Indra Nooyi’s recent comments, have that disorienting feeling over what to market and to whom.
In a broader context, the Beverage Almanac in this issue shows, sometimes in stark relief, just how a wide range of beverage categories and brands—some established and some still emerging—are moving. It’s the “by-the-numbers” context for the analysis we deliver regularly. And it happens to provide the numbers behind one of the most recent beverage news items of the day.