Coca-Cola (NYSE: KO) recently announced that Sprite ReMix Berryclear is the newest addition to its new tropical-flavored Sprite line. The new flavors are an easy way for the beverage giant to generate interest and perhaps bump up sales in older sodas.
Coke's traditional lemon-lime Sprite faces stiff competition from PepsiCo's (NYSE: PEP) Sierra Mist. In the case of Sprite ReMix Berryclear, Coke is clearly aiming at the youth market by introducing the drink during spring break at South Padre Island, Texas. One suspects partying college students will find the soda an attractive companion to some of Diageo's (NYSE: DEO) or Allied Domeq's (NYSE: AED) beverages.
While the younger crowd certainly is important, Coke appears to be paying the most attention to the calorie-conscious drinker. The firm has been especially active with additions to its Diet Coke brand. Now, consumers can buy Diet Coke with lemon, lime, cherry, and vanilla. With the barrage of news reports on obesity, Americans are looking into healthier foods and anything that promises to cut their waistlines. Coke is evidently hoping to cast a wide net in the diet area and maximize its return.
The strategy makes sense, but Coke has to be careful to not dilute its brands. Obesity is notgoing away any time soon, so a totally new healthy offering may be appropriate. Pepsi probably feels this way, too. It recently announced the introduction of Pepsi Edge, a mid-calorie, mid-carbohydrate soda, aimed at those who believe in moderation.
Coke, meanwhile, seems to be betting on consumers' palate for fruity tastes. Though, the firm's juice business is faring poorly. Although juice and water products constituted just 8% of Coke's U.S. gallon sales in 2003, this area could be ripe for improvement. True, juices, despite being a healthy alternative to regular soda, have gotten a bad rap in low-carbohydrate diets, and this may be part of the reason for declining demand. But in Coke's case, it could also be that several of its juice offerings are not as healthy as they could be, since they often feature corn syrup sweeteners as primary ingredients. Coke's Odwalla and Minute Maid juices are notable exceptions.
The company looks poised to position its juice in the low-carb market with several new Minute Maid products this month. It may also make sense for Coke to review the formulas of its other juice brands. Already, though, Coke is a step behind Pepsi, which has introduced Tropicana's Light n' Healthy low-carb orange juice.
Prepare yourself for the juice wars.
Are you ready for the juice wars? In a face-off between Coke and Pepsi, who do you think would have the edge? Share your opinion with other Fools on the Coca-Cola and PepsiCo discussion boards.
Fool contributor Brian Gorman is a freelance writer in Chicago, Ill. He does not own shares of any companies mentioned in this article.
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