Managing Market Changes

Coca-Cola announced plans Wednesday to launch a revamped “Coke Zero” in the United States as it expands offerings of low-sugar and non-carbonated beverages amid flagging demand for sweet sodas.

The soda, “Coke-Cola Zero Sugar,” which is already on the market in much of Europe and Latin America, will be available in the US starting in August. The launch comes at a time when more cities around the US have enacted, or are weighing, soda taxes.

Coca-Cola announced the plan as it reported a 60% drop in second-quarter profits to US$1.4 billion and a 16% decline in revenues to US$9.7 billion. Both were hit by the company’s move to offload bottling assets in North America as it leans away from its traditional soda offerings.

Sales volume grew for three of the four beverage categories: juice, dairy and plant-based beverages; water, enhanced water and sports drinks; and tea and coffee.

But volumes were flat in sparkling drinks. The results translated into 59 cents per share, a penny above analyst expectations.

Chief executive James Quincey said Coca-Cola’s efforts to meet consumer demand for non-sweet and healthier offerings were on track as it transforms itself into a “total beverage company.”

In addition to scoring increased sales of Coca-Cola Zero Sugar in Europe, Latin America, the Middle East and Africa, the company has launched new orange juice products in China and expanded its “Innocent” brand of smoothies and premium juices in Western Europe.

Stuart Kronauge, senior vice president of marketing, said the soda giant plans marketing across social media, television, radio and retail around the US launch.

“We’re changing the name to Coca-Cola Zero Sugar to be as clear and descriptive as possible about the product and the promise that it delivers great Coca-Cola taste without sugar,” Kronauge said in a blog post.

The drink uses aspartame and acesulfame potassium — otherwise knows as “ace-K” — as low-calorie sugar substitutes, according to the company website.

The makeover extends to the packaging of the product, employing the trademark bright red of Coca-Cola across most of the can with a black strip at the top that recalls the outgoing black Coke Zero can.

“The packaging revamp supports our company’s ‘One Brand’ strategy to bring all Coca-Cola Trademark brands together to show fans we have a Coca-Cola for everyone,” Kronauge said.