The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Saturday, 29 July 2017

From Coca-Cola Zero to Coca-Cola Zero Sugar: big deal or no deal?


Okay, Kat readers, what was the biggest news item of last week? Many of you, especially if you follow events in the U.S., will probably point to the drama over Obamacare. Yes, indeed, that was an exciting event. But the really big news item came from Atlanta, Georgia, the home of the Coca-Cola Company, which, on July 26th, issued a press release, which began as follows--
“Since its 2005 introduction, Coca-Cola Zero™ has refreshed hundreds of millions of fans across America with its real Coca-Cola taste and zero calories. From its U.S. introduction into the Coca-Cola® trademark brand portfolio to its global expansion, the brand is sold in nearly 160 countries around the world.

Now, through in-house innovation and extensive market testing, Coca-Cola Zero is getting a new name, new look and even more delicious taste. The no-calorie fan favorite will deliver an even better-tasting recipe and now be called Coca-Cola Zero Sugar.”
Yes, you understand correctly. Coca-Cola is about to launch in the U.S. a successor to Coca-Cola Zero under the name Coca-Cola Zero Sugar. As the release describes, the company has succeeded, after a year of consumer tasting trials, in developing a zero-sugar drink that tastes more like than original Coke product than does Coca-Cola Zero. The announcement further states that Coca-Cola Zero Sugar has already been on sale in 25 countries around the world, including Great Britain and Mexico and has shown strong growth. Coca-Cola apparently feels confident enough to replace Coca-Cola Zero with Coca-Cola Zero Sugar in the US, despite that Coca-Cola Zero was among the 10 leading "sparking brands” in 2016.

Accompanying the new product will be new a packaging design, highlighting the “iconic red Cola-Cola disc”, which will be set against the black background that has come to be identified with Coca-Cola Zero. Also, the words “Zero Sugar” will be prominently featured, just to make sure that consumers know that the drink does not contain any, but any, sugar. The overall goal of the new design is “that [it] looks more like Coca-Cola” [Merpel asks what exactly this is supposed to mean.]

More generally, this move by Coca-Cola raises some questions for this Kat. Remember, the ultimate goal here is presumably to sell more of the Coca-Cola Zero Sugar drink than the zero-calorie product sold under the Coca-Cola Zero mark. Start with this Kat’s own lair. When I described for Mrs. Kat what Coca-Cola was planning to do, her response was: “What’s the difference whether it is called Coca-Cola Zero or Coca- Cola Zero Sugar?” Here, the competition is between Coca-Cola’s no calorie product and those of others. Her preference for years has been the Coca-Cola product, which means that unless she dislikes the taste of the new product, she will remain a customer, whatever they call it. For her, the move will not result in additional sales for the company, but the company seems confident enough that she will not abandon the Coca-Cola product in this product line.

The additional sales would seem to come, if at all, from customers who identify with the Coca-Cola brand first and foremost on the basis of taste. Another member of this Kat’s lair simply will not give up the full-calorie version of the Coca-Cola product, refusing to drink Coca-Cola Zero “because of the taste”. One result of this position is that he limits his intake of regular Coca-Cola because of the calories involved, which means that he drinks less of the Coca- Cola product than he might if calories were not an issue.

Enters Coca-Cola Zero Sugar. If Coca-Cola can convince this Kat’s family member that the new drink tastes exactly, or nearly so, like regular Coca-Cola, he might be tempted to switch (or at least give it a try). If he likes Coca-Cola Zero Sugar, he may well increase the volume of his purchases of Coca-Cola soft drinks. In this case, the move by Coca-Cola will result in increased sales.

This might also explain the change from “Zero” to “Zero Sugar”. Since the launch of Coca-Cola Zero, there has been a legal question whether the word “Zero” has any distinctive power in the trademark sense. Courts and tribunals have differed on this point, some holding “yes”, others “no”. “Zero Sugar” seems clearly in the camp of being unequivocally descriptive, which is not good from the trademark perspective. On the other hand, it reinforces, on a factual level, for people like this Kat’s family member, that the product is indeed sugar-free. Drink as much as you want; after all, it tastes like “the real thing” and there are no calories to count.

A postscript: This Kat later went to the market. There was a full shelf of Coca-Cola Zero bottles for purchase. He took two of them home. If, next week, that shelf is full of Coca-Cola Zero Sugar bottles instead of Coca-Cola Zero, he, or Mrs. Kat, will likely do the same thing.

8 comments:

Anonymous said...

One wonders if this will be a repeat of the disastrous change to the recipe some years ago that did wonders for Pepsi-Cola's sales. Hopefully they have used a different focus group.

Uncle Wiggily said...

Maybe good marketing. But then, maybe not. Lest we forget: New Coke.

Maybe not so good TM strategy.

Big corporations can sometimes make big mistakes.

"Zero Sugar" seems bigly descriptive and non-distinctive.

Uncle Wiggly

Mark Summerfield said...

Oddly, here in Australia the replacement product is named Coca-Cola No Sugar. It has, in fact, already launched, however there is to be a period of overlap before the old product is phased out, so No Sugar is sitting on the shelves side-by-side with Zero.

The fact that No Sugar adopts a more uniform get-up with regular Coca-Cola actually makes it a bit hard to pick out at first glance. From a branding perspective it does seem a strange strategy, but I guess time will tell if they have done their homework.

The marketing message here is that No Sugar is the result of years of research to develop a sugar-free formulation that is as close as possible in taste to the original full sugar product, i.e. it is actually different from Coke Zero. The soft launch strategy means that we can easily all do our own side-by-side comparisons. For what it's worth, I can taste a difference, and at first sip I think the new product does taste more like original Coke. However, I'm not sure if that's such a good thing, because original Coke tastes very sweet to my palate these days. And Coke No Sugar still has that slightly astringent aftertaste that is characteristic of aspartame. I have actually found it to be quite pleasant with a generous squeeze of lime added.

roth phallyka said...

I guess time will tell if they have done their homework.



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The iPuffin said...

For a number of years Coca Cola has fought to get the word ZERO in multiple jurisdictions. As part of that exercise it has suggested that the word ZERO is distinctive and must, as a result, have concluded that this constitutes a separate sub-brand of the same, alongside the "core".

By changing to COCA COLA ZERO SUGAR this makes it subservient to the "core" brand and reinforces that. It also places them in a different argument with regard to other ZERO brands in other countries. If you are launching ZERO into new territories and they are empty then alleging distinctiveness is not an issue; start seeing other ZERO registrations in new territories and suddenly you have a potential legal issues. The answer: move across to ZERO SUGAR and say it is all descriptive use so you dont have to worry about existing ZERO brands.

Let's see whether they drop their ZERO registrations and/or start defending the ZERO SUGAR brand against other ZERO marks.

Would also be interesting to learn whether ZERO in some languages is synonymous with "not very good" when not combined with SUGAR..

Bennie said...

I love all forms of coke!

Anonymous said...

I seem to have missed the critical issue: which one tastes best with whisky?

LegalTony said...

Picking up on Mark Summerfield's comment on the similarity of ZERO SUGAR branding, I wonder if it's that much of a stretch to fathom that Coca-Cola are looking to replacing their "original" recipe.

On review of articles such as "Coca-Cola's business shows a bleak future for soda", "Soda Consumption Falls to 30-Year Low In The U.S." and "Coca-Cola defiant as Coke Life sales plummet", it would not be unreasonable to forecast consolidation and even replacement as consumers become increasingly aware of sugar content and more skeptical of artificial sweeteners.

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