Pepsi Loses its Edge

Published in CSP Daily News

Half-the-calories drink sinks

PURCHASE, N.Y. -- PepsiCo will dump its slow-selling Pepsi Edge by the end of the year, reported The Atlanta Journal-Constitution, marking a short shelf life for a drink that, like competitor Coca-Cola C2, offers about half the calories of regular colas.

PepsiCo's plans, reported last Friday by Beverage Digest and confirmed by the company, raise questions about the future of Coca-Cola's C2. While Atlanta-based Coca-Cola is holding to claims it will keep selling the brand, C2 has not had a strong start, the report said.

U.S. sales [image-nocss] totaled 25 million cases during C2's six months on the market in 2004, according to Beverage Digest. Pepsi Edge sold 8.6 million cases during the same period, it said.

PepsiCo spokesperson Dave DeCecco said the midcalorie segment "just hasn't met expectations."

"People give us credit for trying new things," he said. "Consumers are more interested in zero-calorie diet colas, so we're going to focus our energy on Diet Pepsi and Pepsi One."

Last year, PepsiCo was modest in its forecasts about Edge, which has 50 calories per 8-oz. serving. Coca-Cola, however, cranked up the hype machine when it introduced C2.

"C2 will continue to be available," spokesperson Scott Williamson told the newspaper. "We recently expanded packaging to include 2-liters and 12-packs."

From the beginning, some were skeptical about the prospects for C2 and Edge, the report said. By fall, it was clear the drinks were not catching on.

C2's 2004 sales of 25 million cases were far lower than the comparable introduction of Vanilla Coke, which sold 90 million cases during its first partial year in the market in 2002.

While reduced-calorie colas could peter out, big soft drink companies are still looking for ways to reach calorie-conscious consumers, especially men who do not like traditional diet drinks, said the report.

PepsiCo has just reformulated its one-calorie Pepsi One with a new sweetener, and Coca-Cola is preparing to introduce Coca-Cola Zero, which is meant to taste more like Coke Classic than Diet Coke.

Like other new soft drinks, Zero is likely to face an uphill battle. Vanilla Coke, for example, recorded sales of 35.6 million cases in the United States in 2004, far off the high point of its first year, said the report.

"Creating a sustainably growing new carbonated soft drink brand is only slightly more difficult than scaling Mount Everest," John Sicher of Beverage Digest told the paper.