Diet Coke under pressure, executive says

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NEW YORK — Diet Coke, the country’s No. 2 soda, may be losing some of its pop.

Diet Coke's bottler, Coca-Cola Enterprises, boosted its full-year profit forecast Tuesday and said it anticipates completing the sale of its North American operations to Coca-Cola Co. in the fourth quarter.  J PAT CARTER/ASSOCIATED PRESS
J PAT CARTER/ASSOCIATED PRESS
Diet Coke's bottler, Coca-Cola Enterprises, boosted its full-year profit forecast Tuesday and said it anticipates completing the sale of its North American operations to Coca-Cola Co. in the fourth quarter.

During a conference call with analysts Tuesday, a Coca-Cola executive noted that Diet Coke was “under a bit of pressure” because of people’s concerns over its ingredients, alluding to the growing wariness of artificial sweeteners in recent years.

Steve Cahillane, who heads Coca-Cola’s North American and Latin American business, noted that the issue wasn’t specific to Diet Coke, but that many diet foods and drinks in the U.S. are facing the same concerns.

“We believe very strongly in the future of Diet Coke,” Cahillane stressed, noting that the drink was still the No. 2 soda in the U.S, after knocking Pepsi from that perch in 2010. The company still sells twice as much regular Coke as Diet Coke.

Cahillane also noted that the company is investing in boosting Diet Coke’s performance, pointing to recent promotions with singer Taylor Swift as an example.

Soda has been under fire from health advocates for several years now, and Americans have been cutting back on sugary fizz for some time. But in a somewhat newer development, diet sodas are falling at a faster rate than regular sodas, according to Beverage Digest, an industry tracker.

Last year, for example, sales volume for Coke fell 1 percent, while Diet Coke fell 3 percent. Pepsi fell 3.4 percent, while Diet Pepsi fell 6.2 percent.

Those figures aren’t going unnoticed in Coca-Cola’s Atlanta headquarters. This summer, the company launched its first ad addressing the safety of aspartame. It has also distributed fact sheets on the topic to its bottlers and retailers who sell Coke products.

The Food and Drug Administration says aspartame may be safely used in foods as a sweetener, and the American Cancer Society has said that most studies using people have found that aspartame is not linked to an increased risk of cancer.

Still, the broader trend in the U.S. has been toward foods and drinks people feel are natural or organic. And Coca-Cola is clearly aware of the shift; the company is working on producing sodas made with natural, low-calorie sweeteners. It also launched a version of its namesake drink sweetened with stevia in Argentina this summer. Stevia comes from a plant of the same name.

Meanwhile, Coca-Cola Co. said that sales volume for regular, full-calorie Coke rose 2 percent in North America in its latest quarterly results reported on Tuesday. Coke Zero, which is made with artificial sweeteners and targeted more toward men, rose 5 percent.

The company didn’t break out Diet Coke’s performance, but overall soda volume for the region was flat.

COCA-COLA REPORTS HIGHER PROFITS

NEW YORK — Coca-Cola reported a higher quarterly profit as the world’s biggest beverage maker managed to sell more of its drinks despite choppy economic conditions.

The maker of Sprite, Powerade and Vitaminwater said global sales volume edged up 2 percent for its third quarter, helped by its performance in countries such as China, India and Russia.

Still, the company conceded that it was facing an economic slowdown in many parts of the world including Mexico, where the government is also considering a tax on sugary soft drinks.

In a conference call with analysts, CEO Muhtar Kent pushed back at the suggestion that the company’s days of growth were coming to an end. He noted that the company is emphasizing affordability and smaller packages to “keep the drinkers base growing” in developing markets. For the quarter, the company said it earned $2.45 billion, or 54 cents per share, up from $2.31 billion, or 50 cents per share, a year ago.

– Associated Press


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