Is Stevia Really Enough to Save Low-Calorie Cola?
As carbonate volumes continue to decline in both the US and the UK, Coca-Cola plans to launch its stevia-sweetened Coca-Cola Life brand in these markets in the coming year. Thanks to the all-natural high intensity sweetener, Coca-Cola Life contains two-thirds the calories of regular Coke, without resorting to the use of artificial sweeteners like aspartame, sucralose or acesulfame potassium (Ace-K). While the company hopes that the taste and formulation will bring back consumers who have moved away from the cola carbonates category, the competition from other beverage categories as well as early consumer reaction to the taste of stevia may make the return to growth too difficult to navigate.
Chasing Lost Volumes
Consumer concerns about the links between obesity and sugary sweet sodas have been cited as the major reason for the over 1.5 billion litre decline in cola carbonates over 2011-2013 across both the US and the UK. Diet colas, once thought to be alternatives for those seeking the cola taste but without the calories, have faced similar losses. The taste of low-calorie versions of these colas, as well as concerns about the artificial sweeteners used to sweeten them, contributed to a combined one billion litre decline over the same period.
Coca-Cola Life is not the first carbonate launched in the UK to be sweetened with stevia. In a somewhat controversial decision, Coca-Cola replaced all full-flavoured Sprite beverages with a new formulation featuring stevia. This allowed the company to lower the sugar amount by 30% and promise consumers that the flavour would not be affected, reasoning that stevia complemented the citrus flavours of Sprite. Similarly, the UK and the US are not the first markets to feature stevia in a cola product. Coca-Cola first launched Life in Argentina in June 2013 and later in Chile in November of the same year. Similarly, PepsiCo launched mid-calorie Pepsi Next in Australia in 2012. However, this year will mark the first time a cola product from one of the two major carbonate companies is launched on a national scale in the highly influential US and UK markets.
The strategic decision to first launch stevia colas in smaller markets allowed Coca-Cola to gauge consumer reaction to the flavour of this new formulation, without risking a major backlash in key markets. Furthermore, the delayed launch in these two markets allowed products like Coca-Cola’s new stevia Sprite in the UK and PepsiCo’s Trop50 (a juice sweetened with stevia to lower its calorie content) in the US to spread awareness of the new sweetener. Reaction to stevia has been mixed. The fact that the low-calorie sweetener is extracted from a plant, rather than artificially created, is a boon for consumers seeking natural products. However, many still complain that these new beverages differ greatly from the full-calorie versions they are seeking to replicate. Furthermore, using low-calorie high intensity sweeteners, whether natural or artificial, does still not assuage some health concerns.
Innovation, not Replication
Expecting Coca-Cola Life, or any other low-calorie cola, to reverse the decline of cola carbonates in the US and the UK, however, ignores the broader shift in soft drinks. Yes, concerns about sugar and calories have caused consumers to re-evaluate the amount of soda in their diet, but presenting them with new formulations that are “close, but not quite” in terms of taste will not reverse this trend. The proliferation of beverage options available to consumers, particularly in these two markets, cannot be ignored. Even if stevia, or any other sweetener, were able to completely replicate the taste of Coke or Pepsi with fewer calories, these beverages are not meeting the growing number of demands that consumers have from their beverages. Functionality, particularly energy, has been a major driver of value growth across most of the world. Natural hydration, such as coconut water, has also carved itself a small but growing niche. Carbonated, flavoured and functional waters present new use occasions and are offered in a multitude of flavours. Carbonates have their place in amongst all of these beverages – the still very high volumes in the US and the UK being prime examples of this fact – but to think that consumers will drink as much of these beverages as they did in the 1980s or 1990s ignores the changes in consumer demand for beverages.
Rather than position Coca-Cola Life as a natural, low-calorie alternative to full-flavoured Coca-Cola, the company may be better served embracing Coca-Cola Classic as an indulgent treat that an overwhelming number of consumers still enjoy, while continuing its work to find brands and products that meet these new beverage demands. Coca-Cola’s work on beverages outside the carbonates category – RTD teas Honest Tea, Gold Peak and Fuze, juice drink Minute Maid Pulpy and energy drink Burn – are a better representation of the changes in consumer attitude towards soft drinks, particularly in the US and the UK. While the decline in carbonates in the US and the UK is a cause for concern, these lost sales can be recovered through other categories. So, instead of asking whether stevia can save low-calorie colas, a better question might be, are low-calorie colas worth saving?