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Coca-Cola Battling Diet Coke Sales Slump

Coca-Cola has boosted its marketing to try to get sales of Diet Coke --which hit a plateau in 2005 and dipped slightly in 2006--back on track. It put Diet Coke front and center at the Oscars, and the drink was given a bigger presence on "American Idol," of which Coke is a major sponsor. Magazine ads touted Diet Coke as everything from a coffee substitute to a post-yoga refreshment. A series of new television ads with the tagline "Yours, Diet Coke" shows folks in frantic or passionate hunts for the drink.

Industry experts agree the decline is not an anomaly, especially at a time when people are increasingly concerned about the health effects of artificial sweeteners. Just this week, doctors in Boston reported they had discovered an association between diet soft drinks and certain factors for heart disease.

Not all of Diet Coke's sales decline has come at the hands of competitors, analysts say. Bill Pecoriello, a Morgan Stanley analyst, says his research shows Coke's newest diet soda, Coca-Cola Zero, has been "highly cannibalistic" of Coca-Cola Classic and Diet Coke.

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