Cadbury Schweppes (NYSE:CSG) is following the lead of the soft-drink powerhouses by developing a beverage aimed at health-conscious Americans, but the company may have trouble defining the drink's niche.
The new version of 7 Up, which is tentatively to be called 7 Up Plus, will be a low-calorie soda fortified with calcium and vitamin C. By introducing vitamins and minerals into the equation, Cadbury seems to be trying to one-up Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP), which will soon roll out low-carbohydrate sodas aimed at the health-conscious consumer.
While Cadbury's angle is unique, it also seems a little confusing. Once upon a time, carbonated soda was considered a refreshing treat, not a dietary staple. To obtain necessary nutrients, people would drink other beverages. I vaguely remember something called milk that had calcium and something else called orange juice that was purportedly packed with vitamin C.
Strangely, as Fool contributor Chris Mallon has noted, Cadbury itself has conducted research that suggested consumers may not even be interested in a soda that straddles the diet and regular categories. It appears Cadbury isn't terribly interested in its own data, perhaps in part because Coke and Pepsi have generated plenty of publicity with their low-carb efforts. With all the hoopla, Cadbury no doubt fears it may be losing out on a large opportunity. Indeed, the company already seems keen on dietary considerations -- I was surprised to find a fairly prominent "7 Up 101" link on its 7 Up website that provides quick access to nutritional information on 7 Up.
Only time will tell if Cadbury has made a wise move with its new soda, but a key factor in its success probably will be how the company positions the drink. With all their fizz, sodas probably never will make it as sports drinks, nor do they seem destined to be part of a complete breakfast. Given these limitations, Cadbury seems to have its work cut out for it.
What's your opinion of Cadbury's new drink? Will it be a hit or is Cadbury missing the point? Talk about it on our Cadbury Schweppes discussion board.
Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.
