Cola Wars: 2007 Edition

With the announcement of Diet Pepsi Max and Coke’s upcoming launch of Diet Coke Plus, it seems evident that the 2007 edition of the Cola Wars has finally “innovated” beyond flavor extension and is now moving into functionality.

Maybe these products will prove to be worthy additions – or even game changers – but to me, unless the goal is simply to stop share loss to competing categories, rather than attract new drinkers, these products represent nothing more than hard evidence of all that ail Coke & Pepsi.

First of all, these products are still CSDs. So are most energy drinks, but Red Bull and its competitors have managed to create a disguise for their products via attitude and positioning. CSDs are on the decline and, at best, this is a temporary bandage that will likely soften – not eliminate – further decline in ’07.

Second, you have to drink diet cola to want to drink these products. I can’t fathom anyone starting to drink diet cola (or going back to it) because it now has vitamins or extra caffeine and ginseng. Of all CSDs, Cola seems the least health oriented – and why would consumers drinking it care? There is an argument to be made that the CSD backlash hasn’t reached a large portion of the big companies’ core consumers, and that products like these will provide a hedge for when they do, but again, it seems like a small step when a bigger one would be to develop something really interesting.

For most of the country, though, these products are too little, too late. The industry has already been there (hello 7-Up Plus) and done that (Jolt Cola). Diet Pepsi Max (which Pepsi claims received “high scores in consumer testing”) is based on research that will make anyone in the industry say “duh”: “Nearly 80% of adult consumers say that maintaining energy is a top priority and nearly 60% find that there’s not enough time in the day to do the things they need to do.”

The moral of this diatribe is that Coke & Pepsi appear to be repeating their same old tricks (cannibalize CSDs), but in a different medium (functionals)…. As always, they appear to be spending too much time a) focusing on each other and b) analyzing, planning, etc. for a market that is fickle and moves quickly. Much more quickly than either of these companies are capable of responding. And regardless of what they say about innovation, there’s way too much emphasis on protecting their cola turf.