Coca-Cola describes Diet Coke as a “work progress” in its bid to stem plummeting sales but if it’s sugar replacement continues to be so polarising then it’s going to struggle to win over consumers.
Demand for the drink is in freefall amid shifting consumer tastes that knocked global volume sales down 6 per cent in its latest quarter. The poor performance was foreshadowed in the UK last year when volumes slumped 412,546,400 litres in the 52 weeks to 28 March, 2.4 per cent down on the same period in 2013, according to IRI.
Coke’s response to the decline has been to go back to basics, improving aspects of the brand’s marketing, graphics, advertising and packaging. All of which are yet to reframe the brand for consumers no longer interested in what’s been taken out of their products but what has been put in it. This attitude has hardened in the backlash at the brand after it refused to remove artificial sweetener aspartame from Diet Coke, which reports claim can be harmful after too much exposure.
It suggests that Diet Coke’s millennial problem is a product issue rather than a marketing one and that drastic changes may be needed to recapture growth of the early noughites. Diet Coke was the bright spot in Coke’s drinks roster between 2001 and 2007 when it exploited an earlier wave of health conscious consumers to stretch market share from 8.7 per cent to 10 per cent in the period, according to Beverage Digest.
And with Coca-Cola Life answering the need for healthier ingredients, the big question is over the role of Diet Coke in the portfolio versus Coke Zero and Coke Life.
Diet Coke and the millennial challenge
Diet Coke’s value sales in the UK dropped 0.5 per cent year-on-year in the 52 weeks to 28 March to £444.6m, while Coke Zero’s sales rocketed 6.5 per cent to £95.5m, albeit from a smaller base, according to IRI. It is a similar story for Coke Life, which saw value sales in the four weeks to 28 March climb 1.1 per cent on the previous four weeks, compared to Diet Coke’s 3.8 per cent drop over a broader distribution remit.
A spokeswoman from Euromonitor said the trend is emblematic of Coke Zero “cannibalising” Diet Coke’s sales, suggesting consumers who choose healthy beverages are unlikely to choose carbonates regardless of whether it’s a “healthy cola”. The media still see carbonate as sugarised drinks whether it contains zero calorie or stevia, she added. “The forthcoming One Cola campaign may likely serve as a temporary 'soft reminder' for carbonates consumers but may not have a long last effect to influence impulse purchase for healthy drinks."
The shifting allegiances from drinkers to newer Coke variants spotlight the pressure on the decision to unite its top four variants to arrest Diet Coke’s decline. It is a pan-European strategy that could extend to other markets should it prove a success though Diet Coke’s transition is being staggered and will still operate its own advertising campaign.
The business is wary of the brand’s position in a lineup that would make its similarities to Coke Zero more pronounced in the eyes of consumers. Both have the same descriptors on pack: Diet Coke: no calories, no sugar. Coca-Cola Zero: zero calories, zero sugar.
‘Diet’ is old marketing language
Industry experts observe that the plan to emphasis One Coke Family with four different personalities is a sound one but may not be enough to retain carbonates consumers. There are very few ‘Diet’ brands and products nowadays. Instead it’s about vitality products and those marketed as 'better for you' that mean customers don’t have to miss out to be healthier.
Natalie Candy, senior planner at brand design agency Coley Porter Bell, said: “Diet Coke is behind the trend. Not only is 'Diet' old language but it's replacing a 'bad ingredient' with one that isn't deemed to be good either, so what are consumers meant to be gaining?
“The [One brand] strategy is likely to cause confusion for consumers between the roles of Diet Coke and Coke Zero. Which begs the question from consumers, are Coca-Cola simply packaging the same product and selling it to women vs. men? Not particularly relevant in the modern world. Why should men and women drink different drinks? And why should women be sold 'Diet' drinks when men get masculine, foodie 'Zero' language?”
Coke’s ‘One brand’ strategy isn’t right or wrong for Diet Coke
Product challenges aside, Diet Coke’s marketing under the umbrella strategy will be dependent on how well it is executed in different markets, holding onto one strategy but using the best possible understanding of local behaviours to re-connect with people and execute. Diet Coke can still do this, but one brand shouldn’t hold back connecting with localised behaviours.
Neil Davidson, managing partner at HeyHuman, said: “Diet Coke needs to go one way or the other – revel in being Diet Coke as it is (just take away the bad stuff) or radically change. Don’t get lost in the middle, fiddling around the edges. Diet Coke needs to go for the things that will connect in people’s lives, and solve their problems first before the brand’s.
“The concern is less the type of consumer, more the type of relationship Diet Coke has with its consumer. It still feels passive and distant. It should be re-building its relationships with people through meaningful choices and behaviours. Actively listen to and speak to people and amplify this. There are still people who still want a relationship with Diet Coke, it just a different type of relationship.”
Coke may look to address some of these points in a rumoured campaign it is prepping after it appointed to Dawson Pickering to handle a European ad brief. The brand is currently being pushed through the “Regret Nothing” campaign that launched in January.
Diet Coke’s troubles derive from changes in consumption habits and as such the business has said its marketing will emphasis brand attributes like taste, reinforcement and uplift. The variant had a 7.50 per cent share of the off-trade market in Western Europe in 2014, second only to Coca-Cola according to Euromonitor. It was the same for Diet Coke a year earlier, which highlights how the consumer base for carbonates is shrinking as they either reduce and/or move away from carbonates