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Archive for Wednesday, March 10, 2004

New PepsiCo product targets dual-users

March 10, 2004

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— Aiming at those who can't decide between diet and regular, PepsiCo Inc. Tuesday announced that it was planning to launch a cola with 50 percent less sugar than regular colas.

The new drink, to be called Pepsi Edge, uses a blend of Splenda, a sugar substitute marketed by McNeil Nutritionals, and high-fructose corn syrup. It will be launched in late summer.

Rivals Coca-Cola Co. and Cadbury Schweppes PLC's Dr Pepper have been testing their own mid-calorie sodas aimed at consumers who drink both diet and regular soft drinks.

About 60 million consumers fall into this dual-user category, according to research conducted by Pepsi-Cola North America. In the past two years, the number of dual-users has grown 75 percent, according to the Purchase, N.Y., company.

The announcement of Pepsi Edge is a significant development for the beverage industry, said John Sicher, editor of industry trade publication Beverage Digest.

"It represents a functional innovation for carbonated soft drinks, which directly meets the carbohydrate, calorie and weight-watching issues that are so prevalent today," he said.

Soft-drink sales in the United States have remained relatively flat as consumers have switched from sugar-laden sodas to beverages such as water and juice, which they consider to be healthier.

Beverage industry executives are said to be looking to mid-calorie drinks as a way to win back health-conscious consumers.

"The idea is to keep regular cola drinkers in the category instead of switching to other beverage alternatives," said Morgan Stanley analyst William Pecoriello.

Both Pecoriello and Sicher expect Coke will introduce a mid-calorie soft drink called Coke Ultra by the end of the year.

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