Have Consumers and Manufacturers Found A Happy Medium for Beverages?

May 4, 2015
Coca-Cola Life, Dr Pepper Ten and lower-sugar flavored milks are among the beverage products looking for a middle ground among calorie-conscious consumers.

Despite some concerns over unnecessary colorants, shoppers expect colas to be brown, requiring the use of caramel colorings.

Photo: Sethness Caramel Color

Coca-Cola Life has been attracting a lot of attention since its national introduction last November. That's also the time when Alexander “Sandy” Douglas, president of Coca-Cola North America, told analysts at the Morgan Stanley Global Consumer Conference that the new product will benefit from consumer trends favoring natural and fresh products.

Coca-Cola Life, which is undergoing a gradual but full U.S. introduction, is sweetened with a combination of stevia and cane sugar and offers a flavor and mouthfeel similar to that of flagship Coke, the company claims, but with just a little over half of Coke's calorie load.

“You’ll see it in stores now in glass bottles, premium priced, as close to the natural section as we can market it, and that’s our move with the Coke trademark," Douglas told the Morgan Stanley audience. "Our belief is that that trend will continue and that we have to be in a competitively advantaged place, a solution for consumers who want to make positive changes but also want to treat themselves to the best-tasting drinks.”

Douglas acknowledged diet products are hurting but the Atlanta-based beverage giant is in a good place to deal with these trends.

Coca-Cola is not the only large beverage marketer seeking a middle ground between zero-calorie diet sodas and a full-calorie product. And soft drinks are not alone in the quest for less sugar and lower calories. Some flavored milk brands are heading in the same direction.

Scoring a Ten

A couple years before the introduction of Coke Life — which occurred in October of 2011 — Dr Pepper Snapple rolled out Dr Pepper Ten, a 10-calorie version of its iconic Dr Pepper flagship. That was followed over the next two years by 7Up Ten, Canada Dry Ten ginger ale, Sunkist Ten orange soda, A&W Ten root beer and RC Ten cola. Earlier this year, Squirt Ten joined the lineup.

Dr Pepper took a very low, but not zero, diet approach with its string of Ten sodas.

“We developed Ten for a growing number of health-conscious consumers who enjoy CSDs [carbonated soft drinks] and were looking to cut back on calories but didn’t care for traditional diet soft drinks,” said Doug Holmes, director of R&D for Dr Pepper Snapple, Plano, Texas. “In short, they wanted the taste experience of a regular soft drink without the calories.

"Rather than shift to diet CSDs, these consumers were leaving the CSD category, pursuing other low- and no-calorie offerings," he continues. "With Ten, our aim was to bring those consumers back into the category with a proposition of both great taste and low calories.”

Coke Life and the Ten products are not head-to-head competitors. Coca-Cola Life is a heavy bet on the trend toward natural sweeteners, even if it means 60 calories per 8-oz. serving, while the Ten products use aspartame, acesulfame potassium (ace-K) and high-fructose corn syrup (HFCS) to achieve a 90 percent reduction in calories.

“The sweeteners used are the ones we’ve long worked with,” Holmes says. “It was a matter of finding the right blend and balance to work with the flavor systems of each of the brands on the platform while ensuring that, as always, taste remained king.”

There may be room in the market for both, and perhaps for other spins on mid-calorie or near-zero products.

Coca-Cola shared with USA Today some market research data, from pre-November trials with Coke Life, and the acceptance numbers were pretty high. The trial distribution took place in 22 Fresh Markets stores.

About 70 percent of purchasers contacted rated the taste four or five stars (out of five stars). For 45 percent of the respondents, Coca-Cola Life already has replaced 75 percent or more of their normal soda purchases.

Green has become the color of stevia, but it remains to be seen if it's also the color of money for Coca-Cola and PepsiCo.

Consumers also like the look, according to the article. The green labeling on bottles and cans is appealing to consumers, and one-third of people who saw a Coca-Cola Life display say they purchased the product — a very high trial rate. In the end, 80 percent of Coca-Cola Life recent purchasers, when surveyed online, said they would buy it again.

The research firm Coca-Cola worked with contacted store managers at 22 of the Fresh Market locations that initially sold Coca-Cola Life. Some 50 percent of those managers said they had completely sold out at least once, and a Florida location said it was selling 50 cases per week.

The Ten products have been successful too, Holmes says.

“We’ve been pleased with the consumer response,” says Holmes. “Ten continues to bring lapsed occasions back to the CSD category, and trial and repeat rates continue to exceed our expectations. In addition, we have seen a very positive response from the Hispanic segment of the population.”

And while, avoiding HFCS and aspartame is on the minds of many consumers, the Corn Refiners Assn. funded recent research that shows actual consumer behavior regarding HFCS in soft rinks may be more forgiving than might be expected.

The 2015 Sweetener360 is a custom research study commissioned by CRA and completed in part by Mintel Group and Nielsen Consulting. It found that even though consumers claim to avoid specific sweeteners when making CSD purchases, their grocery receipts tell a different story. All segments of consumers, from careful label studiers to bargain shoppers, are significant contributors to sales of carbonated soft drinks formulated with sugar, HFCS and low-/no-calorie sweeteners.

Colas and root beers — whether in full-calorie or diet versions —traditionally have been made with caramel colors. There have been rare exceptions, but consumers expect those sodas to be brown, says Brian Sethness, senior account executive at Sethness Caramel Color, Skokie, Ill.

Caramel colors have a much lower price point than many other food colorants, and the variety of lines offered by Sethness are flavor-neutral and compatible with any sweetener approach or calorie level.

While there have been some scientific studies linking high amounts of 4-methylimidazole (4 MEI, a product of caramelization) with cancer, there are now caramel colors processed in such a way to lower the 4 MEI. Those products are now being used in beverages that will be sold in California, as the Golden State has recently put limits on the amounts of 4 MEI in foods and beverages.

There are also organic caramel colors, and class 1 caramel colors that are made without reactants. Class 4 colors are typically used by the cola manufacturers to achieve the richest dark color most effectively. “But consumers of natural products may be more accepting of a lighter-colored product for the sake of consuming a more natural beverage,” Sethness says.

These class 1 and organic product lines are among the fastest growing, Sethness notes, and more and more beverage makers are turning to caramel-based reds and yellows. These are more muted than dyes, but again, that has become less of a disadvantage for a growing segment of consumers.

The effort at lightening – without eliminating – sugar and calories in beverage is not limited to carbonated soft drinks. Just last month, Nestle announced plans to reduce the sugar content in its powdered and RTD Nesquik product line. Nestle has taken several recent measures to curb sugar and salt in its product offerings.

The new Nesquik milk powders launched last month contain 10.6g of sugar per two tablespoons, registering a 15 percent drop in the chocolate version and a 27 percent reduction in the strawberry flavor. The products also no longer contain artificial colors or flavors, the company said.

Nesquik ready-to-drink beverages will include 10.6g of added sugar per 8-oz. serving, with 22g of total sugar, counting the lactose.

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