The flailing soft drink industry hopes it has found a middle ground to bring back customers: mid-calorie soft drinks.
PepsiCo on Wednesday announced on its website plans to roll out Pepsi True in mid-October on the e-commerce site Amazon.com. The beverage is made with sugar and stevia (a sweetener made from stevia leaf extract) and contains about 30% fewer calories than regular Pepsi. Just as important – particularly to influential Millennials – it contains no high-fructose corn syrup and no artificial sweeteners.
The 7.5-ounce cans will initially be sold in packs of 24 on Amazon but eventually will be sold in grocery stores.
"This is the latest part of a massive, transformational journey that we've been on," says Simon Lowden, chief marketing officer at PepsiCo North America, in a phone interview. Roughly 50% of the company's beverage portfolio is now zero or low-calorie, he says. That compares to less than 25% fifteen years ago.
The move comes even as Coca-Cola has recently begun testing its mid-calorie cola, Coca-Cola Life, in some stores in the Southern United States before a planned national rollout next month. Carbonated soft drink sales have been declining for almost a decade, and more recently diet soft drink sales have begun to decline at an even faster rate than regular, sugared soft drinks. Suddenly, a new battlefront is taking shape in the mid-calorie arena.
"The cola wars are alive and well," says John Sicher, publisher of Beverage Digest. "Now, both Coke and Pepsi have similar products with Coke Life and Pepsi True. Who will win? The consumer."
Coca-Cola, last month, in another e-commerce link with Amazon, brought back the highly caffeinated citrus soda, Surge, also initially sold only online via Amazon. In both cases, the brands will eventually be sold at grocery stores, executives say.
The Amazon rollout, Sicher says, "lets PepsiCo use a high-profile channel to gauge initial response. It also allows the product to get some scale and awareness before it goes into the bottler system."
But the new soda war's most interesting battle front isn't in e-commerce, but the mid-calorie sector that has recently exploded with activity.
It's all about lower calories without the chemicals. A 7.5-ounce can of Pepsi True, for example, contains 60 calories. That compares with 100 calories for the identical-size can of regular Pepsi. Similarly, the 8-ounce glass bottle of Coca-Cola Life, now sold in Fresh Market locations in a handful of Southern states, is 60 calories.
"We ultimately want to be leaders in this emerging segment," said Andy McMillin, vice president of Coca-Cola brands, in a statement.
Lowden says the target for Pepsi True is adults in their late 20s or early 30s.
Young women -- particularly young mothers -- are increasingly rejecting diet soft drinks because they don't like the chemicals in them. As a result, mid-calorie brands such as Coke Life and Pepsi True "have a real audience with Millennial women" concerned about both calories and chemicals, says Leann Leahy, president of The Via Agency.