Michael J. Fox. Michael Jackson. Madonna (for one brief flickering moment). While second-largest soft-drink concern PepsiCo (NYSE: PEP) isn't recruiting its 80s spokespersons back to the fray, the company is bringing back the old-fashioned taste test, in an effort to prove the flavor of Diet Pepsi superior to that of the better-selling Diet Coke - the second-most popular brand under the Coca-Cola (NYSE: KO) umbrella.
Starting today, PepsiCo will be handing out samples of Diet Pepsi, in newly designed cans, and boasting the claim that their calorie-free product has "more cola taste." A recent taste test, reminiscent of the familiar "Pepsi Challenge" from days of yore, yielded positive results, with 56% of respondents believing Diet Pepsi tasted more like "real" (full-calorie) cola, while 41% preferred Diet Coke.
Sales of diet soda are on the decline, as sports drinks and bottled water gain popularity, but the Diet Pepsi brand is losing momentum at a faster clip than Diet Coke. According to an article in today's Wall Street Journal, unit case volume of Diet Coke slipped 0.1% in 2006; Diet Pepsi volume dropped 1.0% last year.
The once-proclaimed "choice of a new generation" has an uphill battle ahead of it . In our "Battle of the Brands" feature last month, Pepsi was felled by Coke, 41% to 59%.
Maybe the Diet brand will have better luck.
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
Reader Comments (Page 1 of 1)
5-03-2007 @ 2:16PM
Michael Schneider said...
Coca-Cola, formerly a sleeping giant, has arisen and has been improving performance. Pepsi, which has been outdoing Coca-Cola in many ways for many years, faces a revitalized competitor.
I have liked Coke for some time and bought in at 42 when most everyone- Jim Cramer, Motley Fool and others were recommending Pepsi as the better of the two. However, I recently bought and recommended Pepsi as well-- partly because Coke had made a recent move and Pepsi was lagging a little. Pepsi also has become a hit with a nice gain since I bought in March. Both companies recently reported better than expected earnings. This week, despite the situation in diet soda, Pepsi gave shareholders reason to celebrate with a larger than expected 25% dividend hike and an increased buyback. Both stocks have been discussed in the free Barrel View mailing at http://www.Barrelomoney.com. A free list of stocks I have discussed there is available at at site and anyone who wants to can sign the Private Guestbook there to receive the free mailing. A plus for both stocks could be the hot summer many weather people are forecasting.
5-10-2007 @ 12:42AM
russ kersey said...
I will no longer buy Pepsi products due to the support of Jesse Jackson that Pepsi gives and will have others make their decision on same.Mr.Jackson is a shame and disgrace with his con art tatics.