- The Washington Times - Wednesday, June 23, 2004

The cola wars are back, and this time they are battling over the low-carb dieter. Pepsi Edge and Coca-Cola C2, which contain half the carbohydrates, calories and sugar of their regular counterparts, began reaching supermarkets this month. And although the drinks have more calories than their diet versions, Coca-Cola and Pepsi hope people find that the reduced-calorie products have more flavor.

Both companies say the idea for the drinks came from consumers.

Pepsi’s research shows that within the past two years, the number of people who drink a combination of no-carb Diet Pepsi and regular Pepsiincreased by 75 percent.

“People are drinking differently now than they did 20 years ago. They’re paying more attention to calories they take in and calories they burn. It was the right time to do something like this,” said Pepsi spokesman Dave DeCecco.

Coke has been looking at a mid-calorie drink for “a number of years,” with C2 in the works for more than a year, spokesman Mart Martin said.

“C2 was created for those people who want the taste of Coca-Cola, but didn’t want to compromise with the taste of the diet drink,” Mr. Martin said.

The company wasn’t able to come up with the correct formula until the recent introduction of the sweeteners in C2 —aspartame, Ace-K and sucralose — in addition to the high-fructose corn syrup already in Coke. Pepsi Edge is sweetened with a combination of sucralose and high-fructose corn syrup.

The results of taste tests varied, but the most common response was that the new drinks taste like a combination of their regular and diet counterparts.

An 8-ounce serving of Pepsi Edge has 13 grams of both sugar and carbohydrates and 47 calories. An 8-ounce serving of C2 has 45 calories and 12 grams of sugar and carbohydrates. The same amount of regular Coke or Pepsi has 27 grams of sugar and carbohydrates and 100 calories.

But one 8-ounce serving of each drink takes a large dent out of the 20 grams of carbohydrates recommended in a low-carb diet.

“If you’re really trying to lose weight, the sugar-free drink is the best,” said Georges Benjamin, executive director of the American Public Health Association.

More important than the reduced sugar, carbs or calories is the number of servings people drink.

“My fear is that people will drink twice as much,” he said. “Obviously, we always encourage water and healthy juices.”

But both companies are aiming to keep buyers in the soft-drink aisle (and in their respective brand) and lure back those who left the industry for water. Neither is worried that the drinks will take away from regular or diet sales.

Regular soft-drink sales fell 1.5 percent last year, and diet sales grew 6.3 percent, said John Sicher, editor and publisher of the trade publication Beverage Digest.

“What [the mid-calorie beverages] aim to do is provide an alternative for consumers who are consuming less regular drinks but aren’t moving to diet drinks,” Mr. Sicher said.

Industry analyst Robert van Brugge predicts that the low-carb drinks will increase the size of the soft-drink market by 1 percent to 2 percent, a significant amount in the slow-growing beverage industry.

Coke officials wouldn’t reveal how much they plan to spend on advertising, but are running their biggest campaign since the 1982 release of Diet Coke, Mr. Martin said. Television ads debuted during last month’s “American Idol” finale, and marketing blitzes are planned for the Daytona 500 race and Times Square in New York.

Pepsi will spend an undisclosed amount on a “typical” advertising campaign on TV, the Internet, outdoor locations and in print ads, Mr. DeCecco said.

In their ads, Pepsi and Coke are identifying their drinks as “reduced carb,” which a number of other companies also are doing. Miller Brewing Co. and Anheuser-Busch Inc. have engaged in a battle over whose beer has fewer carbs, and both Subway and T.G.I. Friday’s have adopted Atkins diet dishes.

The “reduced-carb” label may be profitablewhile the Atkins diet is king, but it might not pay off if the low-carb craze ends, said Mr. van Brugge of Sanford C. Bernstein, whose parent company, Alliance Capital, owns just a little more than 1 percent of Pepsi shares.

“There’s some risk that they’re tying themselves to what may be a fad,” he said.

Neither company is worried about the fad — and interest in their drink — fizzling.

Mr. DeCecco said nearly three-quarters of the homes they sent Pepsi Edge samples to reported they would buy it in the grocery store.

“It’s a strong indication that it would succeed,” Mr. DeCecco said.

Mr. Martin said the appeal of C2 isn’t just lower carbs, but also fewer calories and sugar, just like Pepsi Edge.

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