Diet Coke sizzles despite Super Bowl ad fizzle

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Diet Coke new design 3x2
Diet Coke new design 3x2 Credit: The Coca-Cola Company

Despite a lackluster Super Bowl ad, Diet Coke's new campaign and brand overhaul was good enough to power the struggling soda to its first quarterly sales gain in North America in nearly eight years.

Coca-Cola Co. reported the positive growth on its earnings call today, but declined to share by how much the brand grew. But even a small gain would mark a significant development for a brand that has slumped as calorie-conscious drinkers gravitate to other options like sparkling water and zero-calorie energy drinks. The last time Diet Coke grew quarterly sales was in the fourth quarter of 2010, according to a spokesman.

"It's still very early in the process but we are encouraged by the initial consumer response," CEO James Quincey said on the earnings call.

Diet Coke's performance shows that sometimes people put a little bit too much stock in how well Super Bowl ads are reviewed, at least when it comes to sales results.

Diet Coke's ad, by Anomaly Los Angeles, took a curiously understated approach in a venue known for highly produced ads. The 30-second ad simply showed actress Hayley Magnus extolling the virtues of the new twisted mango flavor with a little dance.

The spot delivered lackluster results in public opinion polls and failed to impress professional ad reviewers. The ad ranked dead last in USA Today's Ad Meter. Ace Metrix, which uses panels of viewers to rank ads, also gave it a low marks. "It is a little static and boring. They are trying to promote a new product which is exciting for them and their presentation is very boring," said one female panel member, according to Ace Metrix.

But the larger campaign and overhaul is clearly working, at least judging by the first quarter results. The effort, which debuted on Jan. 10, includes a logo redesign, four new flavored varieties, such as "twisted mango" and "ginger lime," and new slim can packaging. The marketing campaign, which includes the tagline "because I can," seeks to inject the soda with a youthful, blunt-talking vibe. It is a departure from the glossy, feminine approach Diet Coke had used for years.

On the earnings call Quincey cited the new marketing, packaging and can size. "I think the combination of those three things was bold enough and interesting enough to not just engage some of the people who perhaps had lapsed from Diet Coke, but also millennials, and even some of the people who had perhaps been drinking flavored sparkling water," he said. Still, he sounded a little cautious, noting that "I'm not a big fan of drawing a trend line through one quarter."

Globally, the company reported that the trademark Coca-Cola brand, including all varieties, grew volume by 4 percent in the quarter, propelled in part by double-digit growth in Coca-Cola Zero Sugar, which was renamed from Coke Zero in 2017 as part of a broad marketing overhaul. Total unit case volume for all brands grew 3 percent. Earnings per share of 47 cents beat analyst expectations of 46 cents.

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