Unlike PepsiCo, which is a diversified food, snack, and beverage conglomerate, Coke is a pure-play drink outfit, and as such, must creatively market a variety of soft drinks to meet changing customer demands.

The continued success of Coca-Cola Zero, which is in more than 55 markets worldwide, contributes to what Coke is calling a "Red-Black-Silver" strategy for the carbonated soft drink business… "Red" representing Coca-Cola Classic, "Black" as Coke Zero, and "Silver" being played by Diet Coke. Notably absent was any mention of Vault or Coke's plans to continue their battle against Pepsi's Mountain Dew franchise.

Powerade Zero will also be introduced, replacing Powerade Option, which itself was created to compete with PepsiCo's Propel fitness water, the market leader. Zero will be sweetened with a pure combination of sucralose and Ace-K vs. Option's hybrid approach of using high fructose corn syrup along with those 2 sweeteners.

Coke reiterated projections to grow sales volume by 3 percent to 4 percent and increase earnings per share in the high single digits in 2008.

In 2007, Coca-Cola revenue rose 19.8 percent to $28.9 billion and net income rose 17.7 percent to $5.98 billion compared to the previous year. Coca-Cola earnings in 2006 were brought down by a non-cash charge primarily related to write-downs at Coca-Cola Enterprises, its largest bottler. The Coca-Cola Co. owns about 35 percent of CCE stock.

Three years ago, the company's earnings growth was slowing and stock price hovering between $40 and $45 a share. It's now about $57 a share, a marked improvement but still below where it was 10 years ago at more than $80.

Source

Earlier this year, Coke launched a vitamin-enhanced version, Diet Coke Plus. Executives agree the soda isn't expected to be a top seller but they believe it will help revive interest in the Diet Coke trademark.

This quote was in the context of recent slumping sales of Diet Coke. It appears that Plus is on the scene to simply provide more "buzz" about Diet Coke, while sister brand Coca-Cola Zero seems to get all the hype these days.

Coca-Cola has counted on Diet Coke — the No. 3 soft drink in the country — to help make up for declining sales of its flagship Coca-Cola Classic as consumers turn away from traditional soft drinks toward everything from bottled water to energy drinks.

Sales of full-calorie Coca-Cola Classic and Pepsi Cola have retreated each year since 1998. But the diet versions had held strong — until recently. Diet Pepsi suffered an even larger slide than Diet Coke during the past two years, according to Beverage Digest.

Industry experts agree the decline is not an anomaly, especially at a time when people are increasingly concerned about the health affects of artificial sweeteners.

Full Story

What's been interesting to note is that not only has Diet Coke been losing some market share to outside drinks (such as Glaceau's Vitaminwater or Pepsi's Gatorade), but there's been some internal cannibalism as well, in the name of Coca-Cola Zero. Zero has been doing pretty well for Coke, however it's been pulling sales away from both the flagship drink as well as Diet Coke. One wonders how many new customers Zero is pulling into the Coke fold that aren't being pulled from customers of other Coke products.

As this is Diet Coke's 25th anniversary, it's being given some new marketing campaigns, a refreshing in package design, and some other products in the brand to keep awareness up (such as Diet Coke Plus).

Even if sales are slumping a bit for Diet Coke, I don't see them giving up their #3 spot any time soon.

Not learning anything from Cadbury Schweppes' disaster with 7Up Plus (7Up Plus: Mixed Berry, 7Up Plus: Island Fruit, 7Up Plus: Cherry), Coke thought it was a good idea to add vitamins to a soft drink and try to market that.

According to Coke, "each eight-ounce serving of Diet Coke Plus provides a good source of Niacin (vitamin B3), vitamins B6 and B12, zinc and magnesium." 8-oz. serving? How does one pull that off with a 12-oz. can that you can't reseal?

As far as sweeteners, in a first for Diet Coke, this time the fake sugar of choice is a mix of aspartame and acesulfame potassium (also known as Ace-K). To my knowledge, this is the first time that this blend has been used in Diet Coke-branded drink. Most Diet Coke mixes solely use aspartame, with the exception of Diet Coke Sweetened with Splenda, which is obviously sweetened with, duh, Splenda (actually, that drink uses both sucralose — a.k.a Splenda — along with Ace-K).

What is significant about the sweetener mix that Diet Coke is using? It's the same 2 sweeteners found in the very popular Coca-Cola Zero line of drinks. The biggest difference between the two lines is that Diet Coke uses the "New Coke" formula, while Coca-Cola Zero uses the "Classic Coke" formula. (Apparently Coke has completely given up on the sweetening mix found in Coca-Cola C2, which used not only high fructose corn syrup, but also a combination of aspartame, sucralose, and acesulfame potassium.)

So, once you look underneath the marketing hype that this is "Diet Coke with vitamins", you'll see that there seems to be something quite different about the core drink itself. I'm not sure what prompted Coke to move forward with this drink. Sales of the 7Up Plus line have been horrid. And beyond that, yet another "diet" brand extension isn't going to help Coke's marketing. It's still very convoluted. But this is where the money is in soft drinks these days, so they keep trying. The vitamin gimmick might just be a way for them to introduce the success of the Coca-Cola Zero blend into the Diet Coke family.

The packaging of this product is rather interesting. It continues the Diet Coke theme of colored "bands" on the label to designate the type of Diet Coke. In this case, it's a baby blue/teal hue, much lighter than the blue found on Diet Coke Sweetened with Splenda. The label design also features a metallic element as the background. Probably the oddest artwork decision was the font and style used for the word "Plus". Feels quite retro 1970s, but in my opinion, rather out of place.

From what I've been able to tell, the pricepoint for Diet Coke Plus will be the same as other Diet Coke drinks, probably with large discounts over the next few months to encourage sampling. This is good, as in the past, Coke has tried to charge more for some of their more "specialty" drinks. For example, when Coke C2 was rolled out, they were charging 12-pack prices for just 10 cans. Additionally, when Coke Blak arrived, you paid close to $2 for a single 8-oz. bottle. In both of these situations, the pricing mistakes helped kill the drinks.

As far as the drink itself, upon opening the bottle I purchased, it pretty much smelled like Coke. Not a surprise there. My first sip impression? Much sweeter than any Diet Coke I've ever had. I would assume this is due to the aforementioned use of Ace-K as a sweetener. There's the expected "diet aftertaste", but surprisingly, it wasn't as bad as I expected. (And as I fully disclose on all diet soft drink reviews, I hate diet soda!) The aftertaste was not very harsh. Overall, the drink was easier to handle than traditional Diet Coke.

I'm not a Diet Coke drinker, but in my opinion, the taste of Diet Coke Plus is superior to Diet Coke.

(Yes, I'm surprised! )

Coca-Cola North America Announces Plans to Launch Diet Coke Plus™
Posted: 3/23/2007 11:25:01 AM

"Great Taste Has Its Benefits"

ATLANTA– March 23,2007 — Coca-Cola North America today announced it will launch Diet Coke Plus™, a sparkling, calorie-free beverage with vitamins and minerals. In addition to providing great, refreshing taste, Diet Coke Plus is a good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium.

Diet Coke Plus will be available throughout the U.S. in April in retail stores where other Diet Coke products are sold.

"Consumers, including Diet Coke drinkers, are increasingly looking for more beverage options, and we wanted to offer them the convenience of a calorie-free beverage that is a good source of several essential vitamins and minerals, and one that delivers on the great taste that they have come to expect from us," said Katie Bayne, senior vice president, Coca-Cola Brands, Coca-Cola North America.

Each eight-ounce serving of Diet Coke Plus provides a good source of Niacin (vitamin B3), vitamins B6 and B12, zinc and magnesium (15% Daily Value [DV] for Niacin, B6 and B12, 10% DV for zinc and magnesium). Diet Coke Plus is the newest member of the Diet Coke family, which includes the flagship Diet Coke, Caffeine Free Diet Coke, Diet Coke with Lime, Diet Cherry Coke, and Diet Coke Sweetened with Splenda. Diet Coke lovers need not worry about their favorite sparkling beverage disappearing. "The millions of current Diet Coke devotees across America shouldn't be concerned – America's #1 diet sparkling beverage is staying just as it is," said Bayne.

The launch of Diet Coke Plus will be supported by an integrated marketing plan to drive awareness and trial. Introductory communications will carry the tagline "Great Taste Has Its Benefits" and will let consumers know that they now have another way to enjoy Diet Coke – one that tastes great and contains several essential vitamins and minerals.

To commemorate the launch of Diet Coke Plus, special limited edition 12-ounce "sleek cans" of Diet Coke Plus will be available at select retail locations in New York City and Los Angeles while supplies last. Diet Coke Plus will be available nationwide in a variety of packages, including 20-ounce PET, 12-ounce can-12 packs, and 12-ounce PET (trial package).

Source: Coca-Cola NA

The style is very retro-1970s, which is an interesting departure for Coke. Also, by looking at the ingredient list, it's sweetened with a combination of aspartame and ace-K, which to my knowledge, hasn't been done with the Diet Coke brand yet.

I'm confused with all the new diet/zero flavors coming out.

End of rant. Here's the story:

A Diet Coke instead of a multivitamin?
Coca-Cola Co. will launch fortified Diet Coke Plus in spring 2007, according to a report published Friday.
December 8 2006: 1:48 PM EST

NEW YORK (CNNMoney.com) — Coca-Cola plans to launch a new version of Diet Coke in 2007 that is fortified with vitamins and minerals, according to a report published Friday.

Diet Coke Plus, slated for a spring launch, will be the first nutrient-enhanced carbonated soda to be offered by a major brand, said Beverage Digest.

A Coca-Cola representative would not confirm the report, but he did not deny it.

"We're always looking to innovate around existing brands," he said. "And we're also looking at new opportunities."

"We'll have lots of news to share on the innovation front in 2007," he added.

Next year, rival Pepsi will introduce a line of enhanced carbonated drinks called "Tava," said the report.

Shares of Coca-Cola traded up 0.3 percent on the New York Stock Exchange Friday.

Coke to phase out Vanilla Coke in U.S

NEW YORK (Reuters) – Coca-Cola Co., the world's largest soft drink maker, said on Friday it would phase out its Vanilla Coke, Vanilla Diet Coke and Diet Coke With Lemon beverages in the United States by end of this year. The company said sales have declined.

Coca-Cola added that it plans to introduce Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke in the United States in January 2006.

The company said Vanilla Coke, which was introduced in the United States in 2002 and Diet Vanilla Coke in 2003, could return sometime in the future. Details about whether Diet Coke With Lemon, which made its U.S. entry in 2001, would be brought back were not available.

"I don't know if we have ever taken out a flavor and brought it back to the market, but the landscape continues to change and we want to be as flexible as possible to adapt to the changing landscape," said Scott Williamson, a spokesperson for Coca-Cola.

The phase out follows declining sales for the brands in the United States. Vanilla Coke sales slipped to 35 million unit cases in 2004 from 90 million unit cases in 2002, while Vanilla Diet Coke sales dropped to 13 million unit cases last year from 23 million unit cases in 2003, according to Beverage Marketing, a beverage research and consulting firm.

Sales of Diet Coke with Lemon have fallen to 9.9 million unit cases in 2004 from 24 million unit cases in 2001, data showed.

Analysts have said that one of the keys to the company's future is to innovate new products that will help Coca-Cola capture more consumers who have moved away from sugary soft drinks to diet versions, or to healthier low-or no-calorie beverages such as water and orange juices with reduced sugar.

Both Coca-Cola and PepsiCo Inc., the No. 2 soft drink company, are battling for the allegiance of increasingly picky U.S. consumers. The United States is the largest market for the soft-drink companies.

"It is a rapidly changing beverage landscape and it is important for Coke to move quickly to deliver on what the consumer wants," said Gary Hemphill, managing director of Beverage Marketing. "The competition for shelf space is intense."

Last year, Diet Coke was the #3 best selling soft drink, behind regular Coke and Pepsi. Farther down the Top 10 list you find that Caffeine Free Diet Coke also performed strong, coming in at #8. It's no argument that Diet Coke is a strong brand. Industry publication Beverage Digest reports that "the biggest trend last year was the accelerated growth of the diet sodas."

The editor feels that the diet category could actually surpass the regular soda category in about 12 to 15 years. That's pretty amazing. Based on those figures, it's no surprise that Coke seems to be rebranding many of their beverages to take advantage of the strong "Diet Coke" brand.

Part of this effort is moving products from a weaker brand to now sit below the strong Diet Coke brand. This is happening to both Diet Cherry Coke and Diet Vanilla Coke, which now become Diet Coke Cherry and Diet Coke Vanilla. In addition to this shift, Coke is color-classifying all of their diet drinks with a certain image scheme. We've seen hints of this with Coke with Lime and Diet Coke with Lemon already. But now it's becoming far more obvious. Each of Coke's 9 diet products seem to now reflect a certain color, highlighted in the banding on the label. Here's the breakdown of the products, with the colors and year of launch noted…

1982 – Diet Coke – White
1983 – Caffeine Free Diet Coke – White w/Gold
1986 – Diet Coke Cherry – Dark Red
2001 – Diet Coke with Lemon – Yellow
2002 – Diet Coke Vanilla – Beige
2004 – Diet Coke with Lime – Green
2004 – Coca-Cola C2 – Silver
2005 – Diet Coke Sweetened with Splenda – Blue
2005 – Coca-Cola Zero – Black

Now, while this branding of most of Coke's diet drinks under the "Diet Coke" banner may make marketing sense, I personally feel that the customer is going to be awfully confused. I mean, is a general person going to note the difference between Diet Coke and Diet Coke Sweetened with Splenda? What's the difference between Coca-Cola C2 and Coca-Cola Zero? Which products contain aspertame and which don't? Are there blends of artificial sweeteners being used?

Interestingly enough, part of what may be driving Diet Coke's new branding may be the success of Diet Rite, which has seen a resurgence in popularity. This is primarily due to the low-carb craze, which suddenly noticed Diet Rite's abundance of flavors, use of Splenda, lack of aspertame, and had no calories, sodium, or caffeine. I know my mom particularly enjoys this product from Cadbury Schweppes.

What's odd about Coke's decision-making here is that they will now have no less than 4 different diet cola formulations (if you factor in the regionally-available Tab). And frankly, it gets confusing!

Formulation #1: Tab
First, the oddball drink, Tab. This was the first diet drink made by Coke, released in 1963.

Initially sweetened by saccharin, the FDA later banned its use, which resulted in the drink being sweetened by aspertame. However, the ban was lifted in 1991 and Tab returned to its original saccharin formula. Some people prefer Tab because it does not have the same aftertaste that Diet Coke possesses.

Formulation #2: Diet Coke et al
Most folks don't know that Diet Coke isn't a diet version of Coca-Cola Classic. In actuality, it shares the same formula as New Coke/Coke II. Yup, it's true!

In the early 1980's, Coke was losing market share and discovered via research that customers preferred the sweeter taste of Pepsi. Thus, when they launched Diet Coke in 1982, the formula used aspertame (branded as NutraSweet) and was tweaked to be sweeter.

Later, the company took the Diet Coke formula, replaced the aspertame with high fructose corn syrup, and launched "New" Coke on April 23, 1985… creating one of the largest marketing and public relations debacles in history. Three months later, the original formula returned to the shelves as Coca-Cola Classic, while New Coke died off.

However, New Coke saw a rebirth in 1992 as "Coke II" until it was finally phased out in North America. Interestingly, that same New Coke-based formula is still used to this day and can be found in Diet Coke, Caffeine Free Diet Coke, Diet Coke Cherry, Diet Coke with Lemon, Diet Coke Vanilla, and Diet Coke with Lime.

Formulation #3: Coke C2
In 2004, Coke C2 rolled out with a formula that broke from the established Diet Coke tradition. This one used a blend of corn syrup and 3 sweeteners: aspertame, sucralose, and acesulfame potassium (also known as Ace-K).

It tasted nothing like Coke or Diet Coke. Frankly, it just tasted bad.

Formulation #4: Coke Zero
Introduced in 2005, Coke Zero is sweetened by both aspertame and Ace-K.

Interestingly, the formula is a diet version of the Coke Classic formula, whereas the formula for Diet Coke is actually a diet version of New Coke/Coke II, thus there is a big difference in taste.

Overall, I think this isn't a great marketing move by Coke. It causes lots of confusion to the customer. The diet beverage market is way too splintered, resulting in one version not dominating and most likely, failures of many of these new brands. Pepsi has already discontinued Pepsi Edge because of poor performance; Coke C2 can't be that far behind.

Will many Diet Coke drinkers decide to move over to Diet Coke Sweetened with Splenda? I think not. So who is the audience they are targeting there? As I mentioned in my review of that product, I think that this is just setting up a future formula change for Diet Coke. Non-Diet Coke drinkers who are looking for something that tastes like Coke probably aren't going to be satisfied with Coke Zero because of the aspertame content and resulting aftertaste. Perhaps a better idea would have been to just release a Splenda-sweetened version of the original Coca-Cola Classic formula. Keep it simple, for Pete's sake!

I think Pepsi got it right when it came to positioning their diet drinks. They left Diet Pepsi alone and instead introduced Pepsi Edge. Then they tweaked the pre-existing brand Pepsi One by removing the aspartame and Ace-K and replacing it with Splenda. That's it. It's simple. And I think the marketplace can figure all this out a lot easier.

Then again, I don't drink diet soft drinks, so who cares?

Basically, it's the Diet Coke formula, but they've replaced aspertame (probably best known as NutraSweet) with sucralose (marketed under the name Splenda). Most folks don't know that another sweetener is also used in this product, acesulfame potassium (or Ace-K for short). It's often marketed under the names Sunett and Sweet One. I guess "Diet Coke Sweetened with Splenda and Sunett or Sweet One" was too long of a title.

The packaging introduces a blue ribbon device to the Coke branding, with highlights of bright yellow, typically the color identified with Splenda (in contrast to the pink for Sweet'N Low and blue for Equal). I really like the look, though I still think all these new Coke spinoffs are going to confuse the customer.

The beverage smells very sweet. However, the taste is bad. Really bad. Granted, I don't like diet soft drinks, so take my opinion with a grain of salt (Coke Zero is probably the best of this year's low-calorie offerings). Diet Coke Sweetened with Splenda has a very bitter taste that comes across as extremely fake. But if you are used to this type of aftertaste, then you probably won't notice it as much.

Personally, I think you'll see this Diet Coke version become the "official" version of Diet Coke in the coming years, replacing the existing formula. Just a hunch.