Diet Sodas: A Declining Beverage Segment?

Three cans of diet Pepsi containing the words “Now Aspartame Free.”
Cans of Diet Pepsi now advertising as aspartame free. Source: Google Images.

Americans are increasingly shying away from soft drinks and sodas as awareness about health has become increasingly important. According to Bloomberg and a recent poll, 62 percent of Americans avoid diet soda. Because consumers have decreased diet soda consumption both Pepsi and Coke have seen a significant decline in their diet soft drink offerings in the past year. Diet Pepsi experienced a 5.2% decline and Diet Coke saw its sales drop by 6.6%.

Diet Pepsi, to combat its declining sales, is introducing a new formula for its diet beverage that does no longer contain aspartame. As of this Monday, August 10, 2015, all Diet Pepsi products containing aspartame will be removed from shelves, which is the biggest change within the Pepsi beverage company in the past three decades. Pepsi began reformulating its Diet recipe two years ago in response to customer backlash against the controversial sweetener, aspartame. Concerns about aspartame are continually growing as consumers are increasingly seeking natural and organic ingredients in their food and drinks.

To advertise Pepsi’s new diet beverage, the can will now feature advertising declaring the beverage as “Now Aspartame Free.” This message will also be repeated throughout Pepsi’s in-store advertising. Additionally Pepsi during its advertising of its new diet offering will describe Diet Pepsi as “Crisp, refreshing –now aspartame free.” Pepsi is turning away from marketing that the formula change was due to health reasons but rather that the change was made in response to consumer demand. Pepsi is focusing efforts on product taste. PepsiCo does not have plans to use the new Diet Pepsi ads for Television and because diet consumers are a very specific consumer segment, digital is the best way to target these consumers.

Coke currently has no plans to remove the aspartame from its diet beverage. Pepsi hopes, that with the change of the artificial sweetener contained in its Diet products, it will be able to draw some loyal customers from Coke, who want a soda without the aspartame sweetener. However, Coke is committed to boosting its brand and increasing sales. In order to do this, Diet Coke, in 2014, released a “Get a Taste Campaign.” This campaign invited consumers to “Get a Taste” of the world they love and featured playful examples of how to make mundane moments a little brighter and bubblier. See one of several of Coke’s “Get a Taste” advertisements below:

As both soda companies, Coca-Cola and PepsiCo, have experienced falling diet soda sales, these companies are refocusing their efforts in other avenues. Coke has gone back to basics; it has focused on aspects of the brand’s marketing, graphics, advertising and even packaging. On the other hand, Pepsi has boosted its in-store merchandising capabilities, effectiveness of go-to-market systems in international markets, and increased investments in social and digital marketing.

From a marketing management perspective, here are some questions to consider:

  • Who and how should Coca-Cola and PepsiCo target diet beverage advertising?
  • Research other ways in which diet beverages can advertise in order to improve declining sales.
  • Do you think diet beverage companies will continue to decline in the future?