Coca-Cola quietly tests new soda as sales slide

Coke Life, in a distinctive green can, isn't exactly a diet drink. It will debut in the UK soon.

By MSN Money Partner Jun 17, 2014 12:29PM
Credit: © Claudio Santisteban/Demotix/Corbis
Caption: Green Coke launched in Argentina with natural sweetener SteviaBy Claire Suddath, Businessweek

In the central lobby of the Coca-Cola (KO) museum in Atlanta, a glass display case features all the types of carbonated drinks currently sold by the company. 

There's the classic red can and its no-calorie iterations: Diet Coke and Coke Zero. Then there's Sprite, Fresca, and the citrus rainbow that is Fanta. 

Over on the left is a small green can that most American visitors won't recognize: Coca-Cola Life, a stevia-sweetened version of regular Coca-Cola. 

Coca-Cola has been quietly test-marketing its new beverage, the first addition to the trademark "Coke" branded sodas in almost eight years. It released the drink in Argentina and Chile last year, and this fall it's launching in the U.K.

Coke Life isn't exactly a diet drink. According to The Guardian, it contains more than four tablespoons of real sugar and has about 89 calories per can -- less than the 140 calories found in a can of regular Coke, but hardly something that will be championed by the quinoa crowd.

Instead, Coke Life is Coca-Cola's answer to the two health concerns that have been hitting the company’s soda sales with a one-two punch: the anti-sugar movement, which rails against its full-calorie, full-sugar line of beverages, and the perception that artificial sweeteners such as aspartame (found in both Diet Coke and Coke Zero) are unhealthy and can even contribute to weight gain.

These concerns have contributed to a steady nine-year decline in U.S. soda sales. Last year they slid even further -- dropping 3 percent, or more than double the 1.2 percent they'd fallen the year before. (Soda is already down a further 2 percent this year.) Diet soda sales withstood the decline for a while; now they appear to be tumbling, too. Last year, Diet Coke sales in the U.S. dropped nearly 7 percent, according to Beverage Digest.

As soda sales have fallen, Coke has also found itself fending off health-policy experts and state governments pushing for increased regulation of sugary drinks and snacks. New York City's limit on soda container sizes is currently making its way through state courts, and a California law that would add a warning label to cans saying, "Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay"" has made it through the state senate, despite heavy lobbying by the local arm of the American Beverage Association (of which Coca-Cola and PepsiCo (PEP) are members). 

In the U.K., where Coke Life will make its next debut, Coca-Cola has agreed to reduce the average calories in its sodas by 5 percent by the end of this year.

Coca-Cola has more than 100 years of experience fighting health crazes and government regulation campaigns. In 1906 the U.S. government sued the company in attempt to get it to abandon caffeine. (It lost.) In 1950, a Cornell professor named Clive McCay testified before a Congressional committee on food additives that Coke could eat through teeth. (Not true.) But so many drink choices are now available that Americans' current move away from soda doesn't appear to be temporary.

Coca-Cola's chairman and Chief Executive Officer Muhtar Kent has publicly committed the company to getting them back. 

"We believe in the North American market. We believe in the demographics, we believe this is a growth market," he told investors during the fourth-quarter earnings call in February. 

The company is doubling down on its carbonated soda line and is in the midst of a $1 billion advertising push. Its current World Cup campaign, which heavily focuses on the classic Coca-Cola brand, is the most expensive, all-encompassing marketing campaign in the company's history. It won't disclose how much that is, but The Wall Street Journal put the figure at around $600 million.

At the moment, Coke Life doesn't have a U.S. debut date. Given the company's heavy investment in stevia-based drinks -- in 2007, Coca-Cola and Cargill teamed up to create Truvia, a consumer brand of stevia sweetener -- it seems likely that the drink will soon see much wider release. 

Stevia is now found in drinks ranging from Vitaminwater to some Odwalla varieties; according to Truvia, the stevia category has grown 20 percent since 2008. 

Meanwhile, PepsiCo is going a different route. It's working with San Diego-based biotech company Senomyx (SNMX) to create an additive that would trick people's taste buds into detecting more sugar than exists.

More from Businessweek
Jun 17, 2014 1:22PM
I don't drink Coca Cola often, but when I do,it's always the original. Stay thirsty my friends.
Jun 17, 2014 1:18PM
Sales are dropping because of the cost, not because of any ill conceived health risk!  The very people that buy this stuff have seen their income slashed by real inflation!  They cutting out the non-essentials so they can pay other outrageous bills, namely: health care insurance, automobile insurance, and home owners insurance! 
Jun 17, 2014 2:26PM
Ok, here it is...JUST USE REAL SUGAR!!! Stop using all the artificial, chemically created junk and go back to the real thing.
Jun 17, 2014 12:51PM
Coke Life seems to be the happy medium--so long as the USA version ends up containing REAL sugar and not high fructose corn syrup.
Jun 17, 2014 2:26PM
Seriously. Back to basics. Can we get real sugar, minimally processed, and in smaller quantities in our foods? If the food industry cuts the sugar in every product by 1/2, in a matter of weeks and months, Americans' tastebuds and sweetness perception will adjust and they wouldn't care or know the difference. But no! The food industry knows that high sugar, far beyond what is normal and needed by the human body, will become toxic to the body and create an artificial craving for more sugar -- so you're hooked like a real coke head and they sell more products. 

It's sinister. It's a fact. It's legal. 
Jun 17, 2014 3:56PM
The article is wrong. We are not against the soda with sugar, we don't like hfc (high fructose corn syrup).

Coke made with sugar is awesome.

Jun 17, 2014 3:35PM
I don't believe that the original Coke is a problem. The problem is drinking several everyday. When I was growing up Coke was a treat not something you drank everyday.
Jun 17, 2014 3:21PM
When Coca-Cola measures a drop in sales, it would be interesting to see if any of the store-brand competitor's sales increase proportionately.  This would mean to me that people are not giving up on soda, just buying a cheaper version of it, possibly because of loss of income or other economic factors.
Jun 17, 2014 1:24PM
They talk about regular Coke being full sugar, but Coke hasn't had sugar in it for decades....unless you get it in Mexico. Regular Coke is worse. It has high fructose corn syrup, which is even worse for you, and leads more readily to diabetes and obesity. There's not even full disclosure here! Plus, they conveniently leave out that aspartame also causes cancer. There are REAL reasons why intelligent people don't drink soda! It's not just a trend.
Jun 17, 2014 1:29PM
I want my Fanta Red Cream soda back !!!
Jun 17, 2014 2:47PM
Remember what happened last time when Coca-Cola tinkered with "Coke".  We all had a flat-pepsi tasting beverage in a Coca-Cola can with a grey stripe.  They called it "New Coke".
Jun 17, 2014 3:19PM
The original recipe contained COCAINE

Jun 17, 2014 1:58PM
My Father bought  500 shares of stock in Coke in 1955.  Passed it down to my son 


Jun 17, 2014 1:12PM
Coke, if you want a product that works.. Put Carver Ginger ale BACK on the market. Stupidest thing ever buy a company and pull the best ginger ale made..
Jun 17, 2014 1:32PM
What is wrong with real sugar? Besides Stevie taste's like sweet n low
Jun 17, 2014 2:34PM
Health food psycho nuts throwing their crap down other peoples throats. I drink coke Zero, my wife diet coke. My wife and I will buy 1 each of the 24 oz bottles a month just for a treat. Were not coke addicts like some are but a little once in a while isn't going to kill you. Rum and coke anyone.
Jun 17, 2014 1:42PM
Beer, wine and liquor soda's for me or my wife.
Jun 17, 2014 2:21PM
Ahhh....should I have a Diet Toxic, Toxic Zero or Cherry Toxic, today?
Jun 17, 2014 3:26PM
You know what's moved me away from sodas?  ALL sodas?

Price!  Good God, it's gone from 2.50 / 12 pack cans of name brand soda to 4.20+ per 12 pack cans.

Jun 17, 2014 4:32PM
Why is it that everyone in our country blames someone else for their own problems. Coke was never ment to replace water. coke has been around for a long long time people were not always fat in this country. our national waist line has been expanding really bad since the mid 90's. its not the beverage industry that is the problem, its the fat lazy people who blame everything they eat. im fat im overweight and guess what people its my fault. all my fault. coke doesn't force me to drink their product. i choose to. McDonalds doesn't force me to let a large combo I choose to.  I'm fat because i make the bad choices. some of my friends are in great shape and they don't stay away from junk food the just don't over indulge the way i do. selling junk food and soda are not the problem. the problem is the way we have gotten so lazy we cant even control how much we eat.  so take if from a guy who is 45 pounds overweight people are fat because they choose to be. they choose to drink gallons of coke a week and eat every waking moment of the day.
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