Recently,
PepsiCo International
(
PEP
) has announced that its mid calorie drink, Pepsi Next, will hit
shelves by the end of March.
In tune with the popularity of low-calorie products, PepsiCo had
unveiled its plans to launch a mid-calorie drink 'Pepsi Next'
during November 2011.
Pepsi Next has been designed to contain 60% less sugar, 60% less
calories, and will be tested in two new markets from next July.
Additionally, the retail giant had applied for trademarks of two
more new-mid calorie drinks along with Pepsi Next, namely Mountain
Dew Next and Sierra Mist Next.
Management has revealed that the mid-calorie drinks have been
formulated to bind the consumers into the cola franchise. This move
came after people abstained themselves from drinking cola as they
are worried about high sugar and calorie content in the drinks.
Reportedly, colas now account for about 55% of carbonated soft
drink consumption, down from 65% in 1995.
Pepsi had tried its hands on mid-calorie drinks earlier, but the
company's initiatives were not much of a success. These initiatives
include Pepsi XL, containing 50% less sugar, launched in the 1990s,
and Pepsi Edge, a 70%-calorie soda, launched in 2004.
However, management feels that nowadays the trends have changed
and the drinks with lower calories enjoy higher demand than before.
Moreover, management also cited that consumers had to previously
choose between zero calories or full calorie, and there was nothing
in between. Besides, Pepsi Next will be sweetened by four
artificial sweeteners as it tries not to compromise on taste.
The beverage giant has also modified its other drink variants to
accommodate the healthy choices of its customers. Gatorade now
offers "G2" containing 20 calories, which is little less than half
the calories of the original version. Tropicana also introduced
"Trop50," which contains half of 110 calories present in a regular
8-ounce glass of orange juice.
Pepsi's rival
Coca Cola Company
(
KO
) had also tried to entice customers by its low calorie drinks,
which were of no success. The low-calorie drinks, Coke C2 and Coke
Zero, failed to create much hype in the market.
However,
Dr Pepper Snapple Group Inc.
(
DPS
) also went low calorie by introducing its Dr Pepper Ten. The new
drink has sugar and does not compromise on taste unlike its diet
soft drink. The sale from the new coke helped to boost its
fourth-quarter sales.
Currently, we prefer to be Neutral on Pepsi's stock.
Furthermore, Pepsi holds a Zacks #4 Rank, which translates
into a short-term Sell rating.
DR PEPPER SNAPL (
DPS
): Free Stock Analysis Report
COCA COLA CO (
KO
): Free Stock Analysis Report
PEPSICO INC (
PEP
): Free Stock Analysis Report
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