beverages

Diet Coke 'under pressure' as consumers grow wary of artificial sweeteners

Oct. 15, 2013 at 2:00 PM ET

Warehouse manager Chad Sadler inventories cases of Diet Coke, waiting to be delivered to stores, in a warehouse at the Swire Coca-Cola facility in Draper, Utah, in this 2011 file photo. Sales volume of Diet Coke fell faster last year than regular Coke.
GEORGE FREY / Reuters
Warehouse manager Chad Sadler inventories cases of Diet Coke, waiting to be delivered to stores, in a warehouse at the Swire Coca-Cola facility in Draper, Utah, in this 2011 file photo. Sales volume of Diet Coke fell faster last year than regular Coke.

Diet Coke, the country's No. 2 soda, may be losing some of its pop. 

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 nevertheless 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 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 to ease concerns people might have. 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 said that sales volume for regular, full-calorie Coke rose 2 percent in North America in its latest quarterly results reported 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. 

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