The guzzler's cup runneth over in a profusion and confusion of new brands
Soft-drink lovers, who poured $25 billion into bubbly beverages last year, are used to being ardently wooed. Madison Avenue has long pursued hem with slogans like "Coke is it!" or "Pepsi now!" set to foot-stomping tunes. Now soft-drink makers are wooing the guzzlers with a flood of new brands. Nine colas have been introduced by major producers in the past 15 months, which is more than in all the years since John Styth Pemberton whipped up the first batch of Coca-Cola in 1886. Says Richard Armstrong, president of Dr Pepper, which has brought out two new brands since last fall: "It would be unusual for even the computer industry to compress so much activity into so short a time."
Many of the newcomers are decaffeinated versions of a company's standard brands. Coca-Cola (1982 sales: $6.2 billion), the largest soft-drink producer, joined the trend last week by rolling out caffeine-free varieties of Coke, diet Coke and TAB in Denver (see above) and Salt Lake City. The Atlanta-based firm, which had only two colas (Coke and TAB) before last July, will now have a total of brand entries in the cola field.
Archrival PepsiCo (1982 sales: $7.5 billion), a food, beverage and sporting-goods conglomerate, offers five different types of cola (Pepsi, Diet Pepsi, Pepsi Free, Pepsi Light and Sugar Free Pepsi Free).
Companies have taken to uncapping new brands because the popularity of old ones has been going flat. The American public drank only about 3% more soft drinks last year than in 1981. During the 1960s and 1970s, annual increases in consumption ran as high as 15%.
Nevertheless, there have been some stunning recent soda successes. Coca-Cola's new diet Coke, which was introduced last July, is already a brisk seller. For years, the company had feared that putting its famed name on any other product would diminish the sales and standing of the flagship brand. But to the company's surprise, nearly two-thirds of diet Coke sales are coming from new soda drinkers or from other companies' brands.
The explosion of unfamiliar labels, though, can cause problems. Some experts fear that the new arrivals will create confusion and swamp an already crowded market.
Americans can now choose from an astonishing 235 brands, compared with 152 only seven years ago. "I worry about the consumer being overwhelmed by the selection," says Joseph Doyle, an analyst with the Wall Street firm of Smith Barney, Harris Upham & Co. Notes John Bergin, president of the McCann-Erickson/USA advertising agency, with tongue firmly planted in cheek: "We certainly are quenching the thirst needs of Americans."
The new drinks are already fighting for space in groceries and supermarkets, where some 52% of all sodas are sold. That battle favors giants like Coke and Pepsi, which have vast sums to spend on the discounts, giveaways and promotions that can help persuade retailers to make room on shelves. Says Brian Dyson, president of Coca-Cola USA: "Some brands are going to suffer reduced space. Others will be dropped completely."