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Coca-Cola broadens appeal with new beverage.

ATLANTA -- This month Coca-Cola Co. is launching Coca-Cola Zero, a zero-calorie cola that targets young-adult sugar cola drinkers who want to forgo the calories but who do not like the taste of diet colas.

Coca-Cola Zero "tastes more like a sugar cola even though it has no calories," remarks Mike Cinque, vice president of sales for United States drug stores and value discount. The soft drink is sweetened with a blend of aspertame and acesulfame potassium (ace-k).

"Coca-Cola Zero is exactly what young adults told us they wanted--real Coca-Cola taste, zero calories and a new brand they can call their own," notes Dan Dillon, vice president of the diet portfolio at Coca-Cola North America. "Young people today do not want to compromise on flavor or calories, and we think Coca-Cola Zero's taste and personality will appeal to them."

Cinque adds that sugar colas have been losing sales for several years and that Coca-Cola Zero is intended to keep those who are abandoning sugar cola "in the Coke family."

Executives indicate that the launch will have no impact on the company's support for Diet Coke, the country's No. 1 diet soft drink, because "the target audiences are different."

The new soft drink will be available in all of the standard types of packaging.

The launch will reportedly be supported by an extensive marketing campaign, including television, radio, print and out-of-home advertising, online activation, and sampling programs.

To offer eager consumers an advance taste of the new soft drink, Coca-Cola listed a sample six-pack on eBay in early April and donated all of the proceeds to charity. This marked the first time the company had listed any product on eBay before introducing it nationally.

Having found that consumers have definite preferences in sweeteners, Coca-Cola also recently unveiled a variety of Diet Coke sweetened with Splenda rather than aspertame.

"Many consumers told us they liked the taste of Splenda and wanted a Splenda-sweetened option under the Diet Coke brand," Dillon notes.

Diet Coke Sweetened with Splenda features a blend of Splenda and ace-k for optimal taste.

Diet Coke, known in some countries as Coca-Cola Light, is No. I in the diet segment and the third-best-selling soft drink overall worldwide, according to the supplier.

In addition, Coca-Cola's Dasani brand of bottled water has introduced raspberry and lemon flavors. The line extension takes Dasani into the flavored water beverage segment, said to be the fastest-growing one in the $11 billion U.S. bottled water and water beverage category.

Flavored water beverages reportedly make up about 4% of the category's unit volume and about 10% of its dollar sales in American supermarkets. In the chain drug channel sales for the bottled water category overall have been up by low double-digits.

Dasani Lemon and Dasani Raspberry are naturally flavored and lightly sweetened with Splenda to provide a water alternative without calories or carbohydrates. The flavors are available in 20-ounce plastic bottles and in six-packs of 500-ml plastic bottles.

Coca-Cola also distributes the Evian and Dannon brands of bottled water.

"We at Coca-Cola view the chain drug channel as a very important segment of our business," Cinque notes. "The channel has some very large retailers with high store counts and nationwide reach. For us it represents a great way to market our brands, especially with chain drug retailers' increased focus on beverages, both for take-home and immediate consumption."

The fastest-growing beverage category of all in chain drug stores has been energy drinks--up 55% in a recent period--and Coca-Cola has quickly become a significant presence in the category through a distribution agreement with Rockstar Inc. for Rockstar energy drink and through the recent launch of its own entry, Full Throttle.

Introduced in January 2001 as the first 16-ounce energy drink, Rockstar has reportedly enjoyed triple-digit growth every year.

"We are serious about the energy drink category, and Rockstar and Full Throttle propel us into a strong No. 2 position," notes Terry Marks, president of the North American Business Unit at Coca-Cola Enterprises. "Rockstar's image and tremendous popularity, combined with the power of our selling and distribution system, will give us a clear advantage with our customers and consumers."

Coca-Cola's distribution of Rockstar, covering Canada and the entire U.S. except for northern California and the Northwest, was expected to begin May 31.

In the sports drinks category, where sales have been running 30% ahead in chain drug stores, Coke fields the POWERade brand, which has been given new packaging this year.

Coca-Cola is the world's largest beverage company. Along with Coca-Cola, recognized as the world's best-known brand, the company markets four of the world's top five soft drink brands--including Diet Coke, Fanta and Sprite--and a wide range of other beverages, including diet and light soft drinks, water, juices and juice drinks, teas, coffees, sports drinks and now energy drinks. Through what is said to be the world's largest distribution system, consumers in more than 200 countries enjoy the company's beverages at a rate exceeding 1 billion servings each day.

Coca-Cola Co.

1 Coca-Cola Plaza Atlanta, Ga. 30313

Key contact:

Mike Cinque, Vice President of Sales for U. S. Drug Stores and Value Discount

Web site:

Phone: (401) 884-7902

Fax: (401) 884-7431

Primary business:



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Title Annotation:MARKETPLACE 2005/CORPORATE PROFILES; Coca-Cola Zero
Publication:Chain Drug Review
Date:Jun 6, 2005
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