Pepsi planning changes?

Something is up with the Diet Pepsi brand, and even Pepsi concedes it is not sales.At a news conference expected this week Pepsi-Cola Canada will announce that some aspect of its diet cola is being changed in a bid to drink...

Something is up with the Diet Pepsi brand, and even Pepsi concedes it is not sales.

At a news conference expected this week Pepsi-Cola Canada will announce that some aspect of its diet cola is being changed in a bid to drink up some of the diet market enjoyed by rival Coca-Cola.

‘Right now we are behind Diet Coke….Our goal is to reverse that,’ says Jeff Lobb, vp marketing at Pepsi.

Pepsi is tight-lipped about its announcement, but does concede it involves only the Canadian brand of the Diet Pepsi product, which has a slightly different formula than the comparable u.s. brand.

According to Lobb, Pepsi is the leader in the soft drink category, with about one third of the market compared to one quarter for Coke.

Lobb also says Pepsi leads the entire Canadian cola segment, but lags in the diet cola segment where Coke is significantly stronger.

The last few years have seen private label brands exploding in popularity, snatching roughly one third of the Canadian cola market. In response Pepsi has been actively developing new products and new packaging.

Lobb says Pepsi believes it must be perceived to be moving ahead if it is to fend off the private-label challenge.

‘You must stand as an innovator. Private label doesn’t.’

In late 1992 Pepsi launched two clear soft drinks, Crystal Pepsi, which is still available in some markets and one-calorie Diet Crystal, which has been pulled.

Last year, in an attempt to attract some of the elusive diet market, Pepsi launched the Pepsi Max product, which has about one third the calories of regular Pepsi.

Pepsi also introduced a one-litre, wide-mouth plastic bottle called the Big Slam, and an easier to carry 24-can cube case.

But Pepsi has remained frustrated in the diet cola segment.

‘It’s had the shit kicked out of it by Diet Coke, which seems to win all the taste tests, and has been marketed better,’ says analyst Michael Palmer with Equity Research Associates in Toronto.

It has been widely reported in the American business press that Coke and Pepsi have been experimenting with new and combinant sweeteners, exemplified by the development of Pepsi Max.

The goal is to achieve the best combination of taste, price, and shelf stability.

At press time Coke was not willing to discuss what a new Pepsi initiative might mean for its Diet Coke product.

‘I’d prefer to comment on something I know than to just speculate,’ said Tina Warren, Coke’s manager of public affairs.

In other news, Pepsi in the u.s. has announced it will be launching a new water product, called Aquafina, early in the new year. There is no word yet on whether it will launch in Canada.