Soft-drink makers lighten up on sugar

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With health and wellness awareness in full swing, less means more for soft-drink marketers.

That's the trend driving new beverage brands introduced at the Food Marketing Institute's annual confab in Chicago last week. From giants Coca-Cola Co. and PepsiCo to health-food players such as Penta water, beverage marketers unveiled a slew of lighter drinks with fewer calories and sugar and even less carbonation.

"We're seeing everything from low-carb to higher fortification to cosme-ceutical beverages to heal skin, with this wave building since the early 80's," said Michael Bellas, CEO of Beverage Marketing Corp. "It's the biggest wave directing the industry at this point." He said among noncarbonated beverages, 80% of volume growth last year came from those with a healthy component to them.

losing fizz

For the 52 weeks ended Jan. 25, 2004, regular carbonated soft-drink dollar volume fell 2.4% while dollar volume for diet or low-calorie versions grew 7.3%, according to Information Resources. Meanwhile, water brands are up 21.5% and sports drinks are up 17.9%, according to Beverage Digest.

Coca-Cola handed out samples of its Minute Maid Light fruit-juice blends with flavors including Guava Citrus, Raspberry Passion and Mango Tropical, and showed reduced-calorie orange juices and lemonades.

It also promoted a sports-related effort for Dasani still water with a "Go for 6" fridge pack featuring cycling champ Lance Armstrong during June and July. That effort aims to drive preference over price, said David Karpan, VP-national sales for Coca-Cola Enterprises, the largest Coke bottler. Dasani is in the middle price tier, so branding is a key strategy.

While no promotional materials were shown, Coke sampled its C2 "mid-calorie" soft drink. The Atlanta-based marketer has speeded up its launch to June 11 to elbow out rival PepsiCo from gaining shelf space for its Pepsi Edge mid-calorie brand.

PepsiEdge was one of several health-focused brands PepsiCo showed. The company also sampled Gatorade X Factor, a "fruity twist" blended version of its sports-drink line, as well as grape and watermelon flavors of Gatorade's Propel fitness water.

startups

Several startup brands aggressively hawked their wares, including Malibu Beach Beverage Corp.'s low-carb fruit juice and tea blends, with 10 calories per serving. Bio-Hydration Research Lab sampled its Penta ultra-premium purified drinking water that claims to be free of arsenic, chlorine, chromium 6, fluoride and MTBE.

"There are a lot of small manufacturers who will never get on the shelf because Coke and Pepsi dominate, but you can be sure the bigger manufacturers are going to take a look at it and try to replicate them," said Valerie Skala, VP-analytic product management for Information Resources.

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