28 Jun 2016 US: PepsiCo brings back Diet Pepsi with aspartame

Less than a year after launching its new Diet Pepsi with sucralose—and abandoning the controversial sweetener aspartame—PepsiCo has made an about-face. On Monday, after plummeting sales and howls of protest from the diet soda’s devotees, the company announced it will bring back Diet Pepsi with aspartame in September.

Called Diet Pepsi Classic Sweetener Blend, the beverage will have a new light blue packaging. Diet Pepsi in its reformulated sucralose-sweetened form will remain available in the brand’s traditional silver can and in soda fountains.

In its effort to bolster sales of Diet Pepsi, PepsiCo had run into two problems. The first: many drinkers were shifting away from artificially sweetened diet drinks, sending sales nose-diving.

The second: those who remained ardent fans liked the taste of aspartame, and didn’t like sucralose.

The company said Monday it was making the move because “consumers want choice in diet colas.”

But its reformulation effort—launched last August—had made the market share losses worse, not better. US retail sales of Diet Pepsi fell 10.6% in volume terms in the first quarter of 2016; its soda market share fell 0.4 percentage points to 4.1% in the period, according to industry tracker Beverage Digest.

Sales of Coca-Cola Diet Coke declined 5.7% over the same period. Diet Coke has a 7.4% soda-market share.

Renaming Pepsi Max

Diet Pepsi’s renaming of Pepsi Max to Pepsi Zero Sugar in the US was another key point in PepsiCo’s announcement.

Pepsi Max is a zero calorie cola beverage from designed to taste more like regular Pepsi than Diet Pepsi by using the sweeteners aspartame and ace-k. It contains more caffeine than regular Pepsi and has added ginseng.

The company has struggled with consumers confusing Pepsi Max with other higher-calorie offerings in Pepsi’s portfolio, so the company took a cue from Coca-Cola and Dr Pepper Snapple in using the term “zero” for its zero-calorie diet soda brand. 

Coke Zero has outperformed other diet soda brands, but even its soda volumes fell 3.3% in the first quarter.

PepsiCo may have made the “zero” name switch much earlier but was concerned about a trademark battle with Coca-Cola.

Now the “zero” mark is fair game as of earlier this month, when a three-judge panel on the US Patent and Trademark Office trial and appeal board granted rights to the term “zero” to Coca-Cola but also challenger Dr Pepper Snapple and any other manufacturer that wishes to use it.

A memorable blunder?

And Diet Pepsi without aspartame will go down as the latest in a list of memorable marketing blunders, along with Sun Chips, Tropicana and New Coke.

In January, 2010, PepsiCo subsidiary Frito-Lay announced it would package its Sun Chips in new bags it claimed were biodegradable. Customers found they made a louder popping noise than the old bags and complained via social media until the company pulled the bags later that year.

In 2009, PepsiCo decided to change the logo design for Tropicana orange juice. Many customers complained and six weeks later, the company announced it would revert to its original carton.

In 1985, Coke reformulated its original Coke recipe for the first time in 99 years and called the new product “New Coke.” Customers revolted and the beverage giant reintroduced its classic formula weeks later.

Although Coke ultimately got a sales boost from the “halo effect” of having listened to its consumers, the experience was painful for Coke executives for many years after.

Aspartame wars

PepsiCo said in April 2015 that it would remove aspartame from Diet Pepsi, citing consumer surveys that the zero-calorie sweetener was the No 1 reason Americans were dropping diet cola.

Aspartame has been the soda industry’s go-to diet sweetener since the 1980s—and the longstanding focus of consumer health fears even though the US FDA has repeatedly vouched for its safety. Those fears bubbled up again with the rise of internet bloggers who blamed aspartame for everything from cancer to autism.

PepsiCo said it didn’t make the move lightly, and that it spent about two years working on the change, surveying thousands of consumers and testing several variations of sucralose-sweetened Diet Pepsi.

The company said more than three quarters of consumers who tried the new version ahead of its launch liked it—including longtime Diet Pepsi loyalists.

But the negative backlash was immediate after the new version began hitting store shelves last August. Longtime Diet Pepsi drinkers took to social media, using unflattering terms like “unpalatable’’ and “yuck’’ to broadcast their distaste.

The ratio of negative comments to positive comments on the internet was about six to one in the early weeks.

PepsiCo initially stuck to its guns, arguing for months that it was natural for some longtime Diet Pepsi drinkers to initially balk and that it would take a while for new Diet Pepsi drinkers to surface.

It even held off on selling the aspartame version online—something that Chief Executive Indra Nooyi had said last July the company would likely do to satisfy die-hards.

Source: The Wall Street Journal

Additional reading:

Change of (sweet)heart: PepsiCo brings back aspartame in Diet Pepsi