Coca-Cola (NYSE: KO) is now gradually introducing its new version of Coke Zero Sugar. The rollout of the new recipe began with overseas markets and has now reached the United States.
The company has expressed its gratitude that Coca-Cola Zero Sugar “continues its strong performance across Europe and Latin America,” and its confidence that the response will also be a positive one in the United States.
It is getting some negative feedback on social media. For example, a Fast Company tech editor, Harry McCracken, tweeted, “The new Coke Zero formula appears to be relabelled Tab.”
McCracken’s tweet drew several responses. One of them reads simply, “Wait. They changed the formula?!?” Indeed. Some palates will not notice.
Grocery Shelves as Real Estate
As the name indicates, Coke Zero, a/k/a Coke Zero Sugar, contains no sugar. When it was first introduced in 2005 some wondered whether Coke was going to be cannibalizing its older “Diet Coke” brand, which had been around since the 1980s.
To some extent, this is what has happened. The two drinks have a similar customer base, after all. Each appeals to Coke loyalists who are concerned about watching their weight. Twelve ounces of Coke Classic yield 140 calories. Both the Diet and the Zero yield: zero.
In 2016, the year Coke started calling the newer drink by the longer and more explicit name, “Coke Zero Sugar,” Zero’s sales increased by 3.5%. At the same time Diet Coke’s sales decreased by 2%. It is reasonable to believe that the growth for one brand and the retreat for the other were cause and effect.
Nonetheless, Coke need not mind the fact that one of its brands is growing at the expense of another. From a company-wide point of view, the more different Cokes the company can persuade brick-and-mortar stores to shelve, the more shelf space it commands. And retail competition is still largely about shelf space.
Coke and Pepsi are in implicit alliance control a lot of the critical real estate of store shelves, helping them marginalize other cola brands.
The desire to grab real estate through branding may explain why two distinct diet-friendly Cokes exist. But it doesn’t explain why the new recipe for Zero does. The change is to some extent simply one made for change’s sake. Large companies fear being seen as dinosaurs. So they are regularly revamping recipes, packaging, and ad campaigns.
This is the impulse that, in the automotive world, yielded the 1988 ad campaign, “this is not your father’s Oldsmobile.”
Sometimes, recipe change or the analog is a valuable way of staying fresh. Young people especially want to think of themselves as having made a break from Mom and Dad. They can see this break both as cosmic (Mom and Dad aren’t “woke”), and as comic (it’s fun to kid Dad about his difficulties with new methods of money transfer). And it can show up in consumer decisions. Brand managers are paid to keep up.
Finding the Sweet Spot
At other times, though, the desire to freshen a brand backfires badly. The 1988 Oldsmobile campaign, and the cars that it was invented to support, drew responses like, “agreed — Dad got a better deal.” The campaign is sometimes seen as a landmark in the decline of the once awesome brand power of the Olds.
Coke has had its own experiences with blowback from its efforts to refresh itself. It, and other large consumer-facing companies, will continue to have to look for the fertile terrain between “stale and boring” on the one hand and “the reckless abandonment of standards” on the other.
It is difficult to tell whether they have found the sweet spot this time. As noted, there are irate voices on social media. But (one has to observe) there always are. Sometimes irate voices fade away or find other unrelated irritants pretty quickly and no harm is done to their targets. It is still reasonable for Coke Zero to hope that this will be one of those times.