PEPSI THINKS MIDCALORIE WITH CANADIAN MAX TEST

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Pepsi-Cola Co. is hoping to make the most of a midcalorie version of its Pepsi Max soft drink.

Sweetened with a blend of sugar and aspartame, Pepsi Max has the earmarks of the innovation soft-drink marketers have been hoping for to reverse a decadelong slide in U.S. cola sales.

"What's been missing in the cola market for some time is excitement," said Manny Goldman, beverage industry analyst with PaineWebber, San Francisco.

Pepsi-Cola Canada Beverages this month will roll out Pepsi Max nationally in Canada, promoting the new drink as having all the taste but only one-third the calories of Pepsi. Advertising for Pepsi Max will break Jan. 27. TV and radio commercials and print ads from J. Walter Thompson Co., Toronto, use the theme "The best of both worlds."

Pepsi-Cola International in 1993 began test-marketing a diet soft drink with 1 calorie under the Pepsi Max name in markets including England, Scotland and Italy. It is sweetened with aspartame and another artificial sweetener, acesulfame-K, that is not approved for use in soft drinks in the U.S. or Canada. The formula marketed in Canada has about 60 calories.

Though Pepsi has no immediate plans to market midcalorie Pepsi Max in the U.S., "you can't ignore it," Mr. Goldman said. "What I think Pepsi's doing here is seeing whether consumers are willing to take on calories for better taste."

The trend toward ready-to-drink iced teas and other New Age beverages, like mineral water and fruit juice blends, suggests consumers will trade calories for taste or perceived health benefits.

Pepsi Max's 60 calories compare with 140 to 180 in a traditional sugared soft drink and 90 to 110 for New Age beverages. Part of those beverages' initial appeal stemmed from consumers' erroneous perception that the drinks are low in calories because they are clear and have natural ingredients. Reality has recently caught up with Clearly Canadian, and the marketer this year will introduce a 2-calorie line called Clearly 2.

In part due to those misperceptions, the diet segment of the $47.4 billion soft-drink market has been especially vulnerable in recent years. At the same time, the cola segment's market share during 1992 fell to 59%, the lowest point in 15 years.

Beverage executives don't expect that trend to reverse until there's a true innovation in products. Both Pepsi-Cola and archrival Coca-Cola Co. have been looking at midcalorie entries as a way to jump-start stagnant U.S. cola sales.

Coca-Cola is known to be developing a similar product, internally called Coke Light.

Though both marketers have been hesitant to roll out midcalorie colas for fear of cannibalizing sales of existing brands, an innovation such as Pepsi Max could be a powerful weapon against private-label brands that are coming on strong in the U.S. and Canada.

Pepsi might be encouraged to try a midcalorie cola because of its experience with clear Crystal Pepsi. Though the cola product has failed to live up to the fanfare it was launched with a year ago, it has drawn new business without hurting Pepsi or Diet Pepsi sales.

"The plan [for Crystal] from the beginning was to generate news and excitement in colas again," a Pepsi spokeswoman said.

The same could be said for midcalorie Pepsi Max.M

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