Tag: store

“No Gen Z wants to be on a diet these days,” he said, adding that the company is “going to continue to innovate and support that business.”

But distaste for the word diet doesn’t signal an aversion to no-calorie beverages. The diet soda segment, which includes diet and zero-calorie branded drinks, has ballooned since it first hit the mainstream in the 1960s. In 2020, the US retail diet carbonated soft drink market hit $11.2 billion, according to Mintel, a market research company.

The segment is still far smaller than the market for regular carbonated soft drinks, which was $28.2 billion in 2020, but it’s growing much more quickly. Diet soda sales are up about 19.5{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from 2018, compared to just 8.4{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} for regular soda in the same period, making it an attractive segment for soda makers seeking growth.

Evolving attitudes toward dieting as a concept mean soda makers have to de-emphasize diet branding as they steam ahead with zero-sugar offerings — even when, as in the case of those brands owned by Keurig Dr Pepper, they’re selling the same exact drink.

The tactic could help soda makers bring more consumers, especially younger ones, into the fold. The industry needs those customers if it wants to grow the soda market.

The birth of diet colas

Diet drinks first became popular in the 1960s.

“It was first stocked among medicines rather than soft drinks, but focus soon shifted to the growing number of weight loss dieters nationwide,” she wrote. Diet Rite was a hit, prompting Coca-Cola to introduce Tab in 1963, and Pepsi to start selling Diet Pepsi a year later.

The segment gained steam in the following years. Looking to expand beyond Tab, Coca-Cola launched Diet Coke in 1982.

At the time, Coca-Cola was facing many of the same challenges it is fighting today: It needed to reinvigorate the Coca-Cola brand, and thought adding a Coke-branded diet option could help.

The company grappled with what to name the product. It considered using the moniker “sugar free” instead of diet, but “many saw it as a slur on Coca-Cola’s main ingredient,” according to the post. Ultimately, the company went with “diet” because it “was the most straightforward articulation of the promise of the brand.”

But a few decades later, Coca-Cola returned to the idea of a sugar-free-branded product. This time, it wanted to attract the demographics that seemed to be avoiding the company’s diet beverages: younger consumers and men.

Zero hits the scene

Other companies also wanted a more neutral way to advertise no-sugar products.

Eliminating the word “diet” creates a “gender-free way to talk about the same topic,” said Jim Watson, senior beverage analyst at Rabobank, who told CNN Business that “diet definitely got taken over as something for women.”

But the arrival of zero-sugar drinks wasn’t just about gender: It marked a turning point for the overall popularity of diet drinks. Alex Beckett, global food and drink analyst at Mintel, said the word diet “started falling out of fashion … with the rise of zero.”

Billing a drink as free of calories and sugar is also about addressing changing ideas about health, and highlighting the absence of sugar from the drink as a positive attribute in itself.

“While the diet designation may be associated with strict regimes or deprivation, the ‘zero’ designation has fewer negative connotations, corresponding with simply a cleaner profile,” according to a Mintel report from April.

The new recipe arrived on shelves in the US this summer, and since then “we have seen that 23{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} of current Coke Zero Sugar consumers are new,” said Alex Ebanks, a spokesperson for the company, adding that Coca-Cola will continue to invest in the product next year and beyond.

Competition heats up

While big brands sharpen their focus on their zero-sugar offerings, they face competition from other categories and upstarts with novel ideas.

One major competitor, according to Mintel’s Beckett, is sparkling water.

“Many people are shifting over … from carbonated soft drinks to sparkling waters,” he said, because those drinks often have no sweeteners, no calories, and “have a more of a health healthy image.”

Beyond sparkling waters, competitors are entering the space with fresh spins on sodas. For example: Sodas that promote gut health.

Olipop, a startup that says it makes “a new kind of soda,” sells throwback flavors like classic root beer, vintage cola and others. The sodas, which range from about 35-50 calories each, are made with a mix of ingredients like Jerusalem artichoke and Cassava root that the company says support digestive health. Poppi, which also sells traditional soda flavors in addition to fruit flavors, makes a similar claim, emblazoning a “for a healthy gut” label on the front of its brightly colored cans.

“​​Consumers are voting with our wallets, and sugar is something that people definitely want less of in our lives,” said Danny Stepper, CEO of LA Libations, a beverage company incubator. “That opens the door for a lot of opportunities and categories,” he said. “Consumers want new things, so that’s opening the door to new ideas.”