Coke, Pepsi launches: Lemon-lime the battle front in this summer's cola wars

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The soft-drink giants are expected to lavish lots of attention on lemon-lime flavored beverages this summer-but not enormous ad budgets.

Two new lemon-lime soft drinks are hitting the market, including the first extension of Sprite, called Sprite Remix, and PepsiCo's national rollout of Sierra Mist. Cadbury-Schweppes, threatened by the decision of many bottlers to switch from its 7Up to Sierra Mist, is responding with a new ad campaign from WPP Group's Y&R Advertising, New York, introduced on the recent Grammy Awards telecast.

"The three-way face-off this year among Sprite, 7Up and Sierra Mist is going to be a very heated battle," said John Sicher, editor of Beverage Digest. Mr. Sicher predicted the bottler shift could cost the Dr Pepper/Seven Up brand 12% to 15% of its volume this year.Yet, while the brands will see plenty of ads, promotion and sampling, spending isn't expected to reach the rarefied levels of colas. Pepsi's launch of Pepsi Blue last year saw $22 million in spending, while Vanilla Coke received $23 million in measured spending through November of last year.

That's because colas are a far larger and more struggling segment. Lemon-lime, the second biggest soft-drink category after cola, lost about 1 share point from 1991 through 2001, compared to colas' 10% share decline during that time frame, according to Beverage Digest.

national debut

Sierra Mist was regional until January when it moved national with two spots in Super Bowl XXVII at about $2 million a pop. It currently has three "Shockingly Refreshing" ads running in the general market and two in Latino markets. Omnicom Group's BBDO Worldwide, New York, handles the general market, while Dieste Harmel & Partners, Dallas, does Latino work.

"The tremendous success of innovation in the cola segment has helped to grow the [soft drink] category, and it's only natural for you to translate that success to your second-largest soft drink segment," said Charlee Taylor-Hines, Sierra Mist brand manager. "I see this summer as the lemon-lime wars. ... We'll see each brand try to create a niche for itself in marketing."

Coca-Cola hopes the spring launch of Remix, a tropical flavor line extension, will boost the sagging fortunes of Sprite, whose share of the total soft-drink market fell 0.3% to 6.2% in 2002, according to Beverage Digest/Maxwell, which tracks carbonated beverage volume. That compares to the company's overall 0.6% market share increase, with volume up 2.1%. Sprite's agency is WPP Group's Ogilvy & Mather Worldwide, New York.

some caution

One Coke bottler said Remix's appeal to youth and minorities could give it the same heft as Vanilla Coke, a 10-month old brand credited with helping Coca-Cola Co. gain market share last year for the first time since 1998. He cautioned that with so many new products, marketers "can't afford to do all they did in the past. ... There's a lot of growth going against brands that aren't getting a lot of media support."

Even with millions at stake, big launch budgets, like Diet Coke's $50 million in 1982, are no longer a given. "As more and more products come out, you will see more media action, but I don't know to what extent you'll see a major leap in budgets," Ms. Taylor-Hines said. "You have to balance how you market and support your new products versus established brands."

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