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PEPSICO KILLS PEPSI EDGE

Acknowledges Product's Failure

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CHICAGO (AdAge.com) -- A year after its launch of a "mid-calorie cola" concept, PepsiCo has acknowledged that its Pepsi Edge brand is a failure and is killing the product.
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Even before it hit the shelves, the mid-calorie cola idea became controversial, drawing criticism from industry analysts and observers who said consumers wouldn't understand how it differed from the company's other diet products.

Mushy middle
In April of last year, AdAge.com columnist and marketing authority Al Ries wrote: "Edge, like rival C2, is a classic case of falling into the mushy-middle trap. Cola drinkers who want taste will continue to drink regular cola. Cola drinkers who want low calories will continue to drink diet colas. Where's the market for Pepsi Edge or C2?"

PepsiCo now admits there wasn't a clear market.

'If we've learned anything'
“Consumers are more interested in zero-calorie diet colas, so we're going to focus on Diet Pepsi and Pepsi One,” said a Pepsi spokesman, confirming a story first reported by Beverage Digest that the product will be discontinued by year-end. “People give us credit for trying new things, and we'll certainly continue to innovate. If we've learned anything, it's that consumers are more interested in zero-calorie diet colas than mid-calorie diet colas.”

Pepsi introduced its drink on the notion that 60% of consumers were so-called “dual users,” who switched between full-calorie and diet colas to help control their calorie intake but don’t like the taste of diet drinks. Earlier this year, Pepsi relaunched its Pepsi One brand with Splenda and packaging made to appeal to males, a move some viewed as the final blow for Pepsi Edge.

Coke's C2
“It’s been dead for a while and so is [Coca-Cola Co.’s] C2,” said an executive close to Pepsi, noting that product is all but gone from shelves. Rival Coca-Cola isn’t ready to pull the plug on its C2 brand, despite a rocky start and still-flagging sales. Coke sold 25 million cases of the mid-calorie cola in the U.S. in 2004, well below other introductions, according to Beverage Digest. Yet it was nearly three times the 8.6 million cases of Pepsi Edge sold in the same period.

Defying the naysayers, Coca-Cola has been stalwart in its support for the product despite negative buzz and its own parade of diet line extensions including Diet Coke Sweetened With Splenda and Coke Zero. In fact, the Atlanta-based beverage marketer recently rolled out C2 two-liter bottles and 12-packs, and is said to be working on a new branding initiative to target younger consumers, according to executives close to Coke.

Coke Zero
Whether Coke can sustain interest for C2 amid the buzz building for the highly anticipated Coke Zero launch will be an interesting case study. The marketer has set “everybody chill” as the theme for Zero’s June 20 launch, with a campaign from MDC Partners' Crispin Porter & Bogusky of Miami and AKQA of New York.

Already, the Coke Zero is the title sponsor for the June 5 Rock 'n Roll Marathon in San Diego, complete with a ChillZone sampling event. A spokeswoman for the soft-drink giant declined to comment.

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