Coke crashes as sugar back lash grows

Life has been very tough for fizzy pop purveyors this year. Take Coke. Amid intense media pressure, the red stuff is down 4.7% to £574.1m while the reformulated, relaunched and renamed Coke Zero Sugar is up 7.9% to £98.2m. “We’ve decided to focus our efforts on continuing to grow Coca-Cola Zero Sugar alongside Coca-Cola Classic and Diet Coke,” says Coca-Cola European Partners operational marketing director Caroline Cater.

This has left Life, the ‘mid calorie’ Coke launched in 2014, high and dry. It’s now worth just £11m, down 56%. As a result, CCEP is now axing all but three SKUs - 1.75-litre and 500ml bottles and 8-packs of 33cl cans - leading some to suggest Life’s days are numbered.

“The value share of Coke Life in the cola category is now less than 0.5% and its rate of sale is less than a third of what it was at launch,” says Nielsen analyst Laszlo Zsom. “While Coke Life’s distribution shows a decreasing trend, it’s still relatively high at 60% so it may be ahead of a longer, gradual phaseout.”

All in all, Coke has lost £48.3m, making it food & drink’s third biggest falling brand of the year, behind Carlsberg and Warburtons. Even Diet Coke is down, having lost £12.8m.

Rival Pepsi, meanwhile, is flying, with overall sales up £29.8m and all but the Diet variant in growth. Most of this has come from zero sugar variant Max, which is up yet again, this time by £26.7m. “Since 2005 all above-the-line advertising in relation to Pepsi has led with sugar-free Pepsi Max,” says Phil Sanders, Britvic GB commercial director at home. “In addition, all product innovation is focused on our no-sugar lines.”

Away from cola there’s better news for CCEP. Fanta is bucking market trends with growth of £4.2m. “Fanta’s success is largely down to its loyal consumer base, a raft of fruit-flavoured and zero-calorie innovations, and its fun persona,” says Cater.

Top Launch 2016

Sports & energy drinks have managed to stay in growth, thanks chiefly to flavours and a shift to no-sugar for key brands Lucozade, Red Bull and Monster. Red Bull has grown £14.4m in value with the help of the spring launch of Red Bull Orange Edition, following the success of Red Bull Tropical Edition in 2015, while Monster added £15.6m with the January launch of zero-sugar Monster Energy White in three flavours. Still, combined sales of CCEP’s Monster, Relentless and Powerade are up just £3.4m and the six top 50 CCEP brands have lost £54.7m.

And 2017 looks likely to be another huge year for the category. With ex-chancellor George Osborne announcing a sugar levy on soft drinks in March, Lucozade Suntory is planning a reformulation of its entire portfolio of soft drinks. It surely won’t end there.