Middle Of The Road

Will mid-calorie sodas be the next big thing or will consumers pass them by?

For decades, consumers who want to quench their thirst with a soda have faced one initial question: regular or diet? Over the past two years, though, beverage manufacturers have been testing products that fit somewhere in between zero-calorie and full-calorie drinks, some of which are hitting store shelves nation-wide. If consumers respond well, the new starting point could be: regular, diet or mid-calorie? But is that likely to happen?

Officials at Dr Pepper Snapple Group (DPSG), which first tested its 10-calories-per-serving Dr Pepper Ten in 2011, seem to think so. The company has continued testing a line of Ten products this year. 7 Up Ten, Sunkist Ten, A&W Ten and Canada Dry Ten arrived on shelves in Columbus, Ohio; Des Moines, Iowa; and central Pennsylvania, while RC Ten began testing in Chicago; Evansville, Ind.; and Des Moines.

Meanwhile, The Coca-Cola Co. spent this summer testing Sprite Select and Fanta Select, which have approximately 70 calories per can instead of the full versions' 140 to 160 calories.

Why the sudden focus on mid-calorie carbonated soft drinks when customers can choose to skip calories entirely by purchasing diet drinks? Industry insiders point out that some consumers complain that diet soda has a thin flavor and leaves an after-taste. Consumers still want to cut calories, but flavor is also an important consideration.

Additionally, women are traditionally diet drinkers, but in Dr Pepper's case, the company saw a potentially large market in men and has targeted its advertising for Dr Pepper Ten to them.

Suppliers have faith in mid-calorie drinks, but the question is whether consumers are interested enough to create a viable market for them. "That's the huge question," said Gary Hemphill, senior vice president, information services, for Beverage Marketing Corp. "I believe there is a market, but I don't know how big the market is — that's what we'll find as the products roll out."

Hemphill noted that this isn't the first time mid-calorie sodas have been tested. PepsiCo's Pepsi Next is an updated version of Pepsi Edge, which sold from 2004 to 2005. Other low- and mid-calorie Pepsi variations include Pepsi One and Pepsi XL. And Coke experimented with a mid-calorie variety, Coca-Cola C2, in 2004.

None of these took off, but the difference between then and now is taste. Advances in sweeteners mean mid-calorie sodas are less likely to taste as if they're missing something, and that's key, according to Hemphill. "It's a product that doesn't compromise on taste, while offering consumers the benefit of reduced calories," he said.

Convenience stores will be a key testing ground for mid-calorie sodas. "C-stores are a key channel because people will often buy a single product or can at a time to test it out before purchasing it in larger quantities for take-home," Hemphill explained.

Improved taste aside, not everyone is convinced that the latest attempt at launching mid-calorie sodas will get them off the ground.

"I don't know if there needs to be a middle ground from a calorie standpoint," said Dana Sump, beverage category manager for Casey's General Stores Inc.

Ankeny, Iowa-based Casey's, which operates approximately 1,700 convenience stores, participated in Pepsi Next's testing phase; 25 Casey's stores in the Cedar Rapids, Iowa, area stocked 20-ounce bottles of the soda. "They did OK," said Sump, noting that the test included heavy promotion from PepsiCo. "I don't see a lot of people gravitating to it."

The good news is that Pepsi Next didn't dent sales of regular Pepsi or Mountain Dew, a popular selection in the region.

Iowa was also a test state for Dr Pepper Ten, according to Sump. "That one has done a lot better," he said. "It's gonna be OK."

Dr Pepper Ten sold just over seven million cases in 2011, its first year in the market, according to data from Beverage Marketing Corp.

Regardless of whether suppliers' experiments with mid-calorie sodas pay off in terms of long-term positive sales, it could be worth it for the soda industry as a whole. "The industry's typically been fairly aggressive on the innovation front — I think you'll continue to see innovation," said Hemphill. "It brings some news and excitement to the category."

In the end, while mid-calorie sodas are seeing some positive signs, only customer preference will dictate whether they become a permanent part of the cold vault. "Ultimately, the consumer will decide the success or lack thereof of the products and category," concluded Hemphill.

For comments, please contact Angela Hanson, Assistant Editor, at [email protected].