Coca-Cola Axes Coke Zero for ‘Coca-Cola Zero Sugar’

Coca-Cola Co. is killing Coke Zero in favor of Coca-Cola Zero Sugar. It’s hard to tell what’s different, however, beyond a significant design and branding overhaul.

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The new Coca-Cola Zero Sugar. Credit: Coca-Cola

The ingredient list remains largely the same, including the use of aspartame as a sweetener. “We optimized the blend of flavors that gave Coke Zero its real Coca-Cola taste,” a Coca-Cola spokeswoman said when asked to explain the difference in the formula. She pointed to changes in the natural flavor composition. New packaging plugs a “new improved taste.”

But the alterations seem as much about marketing as the liquid. By putting “Zero Sugar” in the name, rather than just “Zero,” the brand more clearly communicates that it does not contain sugar. The negative publicity around sugar’s link to obesity has emerged as a major threat to soda makers in recent years, which has only intensified as more local governments enact taxes on sugary drinks. PepsiCo made a similar change last year when it rebranded its Pepsi Max product as Pepsi Zero Sugar. It promoted the shift by making Pepsi Zero Sugar, not regular Pepsi, the sponsor of the Super Bowl halftime show.

Coke Zero Sugar has “the same ingredient line-up as Coke Zero in the same order,” said Duane Stanford, editor of beverage industry trade pub Beverage Digest. But natural flavors “could help ingredients interact with each other in a more flavorful way.” Still, he added that “I would not see this as a wholesale change to the formula or taste profile.” Rather, “the big news today is that they are being extremely pointed about the fact that there is no sugar in this product,” he said. “They want to leave no doubt about that. Because consumers want to better control their intake of sugar.”

Coca-Cola is pouring significant marketing into the new product, which will hit stores in August. A campaign running from September through December will include TV, digital, radio, outdoor, social media and retail advertising, as well as a sampling tour. The effort “represents the biggest investment we have made in the brand since its launch in 2005,” Stuart Kronauge, Coca-Cola’s U.S. business president and senior-VP marketing for North America, said in a blog post.

The evolution “comes at a time when Coke Zero is a strong, growing brand,” she said, citing 3.5% dollar sales growth in 2016. “We recognized an opportunity to give the brand another boost and to encourage more Coca-Cola fans to try a great-tasting zero-sugar product.”

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The old Coca-Cola Zero. Credit: Coca-Cola

The U.S. rollout comes after Coke has already introduced Zero Sugar in more than 25 markets around the world. While Coke Zero used a lot of black in its design, Coca Cola Zero Sugar leans heavily on red. The design more closely adheres to the look of regular Coke, in line with the “one brand” strategy that Coca-Cola rolled out in January 2016. The goal is to portray variants like Diet Coke and now Zero Sugar not as separate brands but as customized choices for drinkers who at times want no-sugar versions. The unified red look “will actually help people stay in the Coca-Cola franchise, resulting in “less switching between brands,” CEO James Quincey said on an earnings call Wednesday.

The company’s second quarter results beat analyst expectations with earnings per share of 59 compared with the consensus estimate of 57 cents. Among the positives cited by Wells Fargo beverage analyst Bonnie Herzog was strong global performance by Coke Zero Sugar that drove mid-single digit volume growth in low and no-calorie soft drinks. Negatives included flat global unit case volume growth and persisting weakness in Brazil, she said.

 By_E.J. Schultz.


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