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Coke getting a calorie, sweetness revamp in Canada

Bottles of Coca-Cola Co. soda are displayed for sale at a convenience store in Redondo Beach, California, U.S., on Monday, July 15, 2013. The new Coca-Cola product, which starts to hit store shelves on Tuesday, will have a lower syrup concentration and about 8 per cent fewer calories – 240 calories for a 591-millilitre bottle of Coke, compared with 260.

Patrick T. Fallon/Bloomberg

Coca-Cola Ltd. is revamping its flagship product in Canada, making it a little less sweet and bringing it in line with Coke in its other markets around the world.

The change is also in response to consumers' thirst for fewer calories, the company says.

The new product, which starts to hit store shelves on Tuesday, will have a lower syrup concentration and about 8 per cent fewer calories – 240 calories for a 591-millilitre bottle of Coke, compared with 260.

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The move comes at a time when Coca-Cola and other soft-drink companies are racing to shore up sales after years of dwindling business. The industry is grappling with consumers who are switching to what they consider to be healthier alternatives, such as bottled water and tea.

"Consumers are looking for less calories and [more] transparency and consistency around the globe," said Michael Samoszewski, vice-president of Coca-Cola's sparkling business unit in Canada. "That's the primary reason why we're doing this."

Mr. Samoszewski said the company could find no reason it had developed a sweeter Coke in Canada than in the rest of the world.

Soft-drink and fast-food companies are feeling the pain of more health-conscious consumers who increasingly avoid their products amid rising publicity about their potential harm, including obesity. Now Coca-Cola's Canadian division is betting that scaling back the sweetness and calorie-count of Coke will help woo customers back to its core soft-drink products.

The company risks losing some customers who may notice a little less syrup concentration, industry watchers said. Coca-Cola will have to focus on avoiding what was a monumental blunder of the U.S.-based parent company in 1985 when it reformulated its top soft drink into New Coke and was forced to bring back its original product, renaming it Classic.

As for the latest sweetness rejigging in this country, "the risks are that the taste is significantly different and Canadian consumers, even though they want less sugar, will reject it," said Tom Stephens of food specialist Brand Strategy Consultants.

But he said Coca-Cola's initiative to lower Coke's calorie count makes sense, given consumers' heightened awareness of the health risks of sugar and high-fructose corn syrup, which is often used instead of sugar.

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"This seems like a very modest change that benefits consumers with fewer calories," added John Sicher, editor of trade publication Beverage Digest in Bedford Hills, N.Y.

Shifting trends and weaker business are pushing soft-drink companies to look for changes. In the 10 years until 2013, U.S. soft-drink sales volumes tumbled 13 per cent to 8.9 billion cases, according to Mr. Sicher's data. He estimated that sales dropped further in 2014.

Last fall, parent Coca-Cola Co., in reporting disappointing financial results, lowered its long-term annual outlook. It unveiled expanded cost-cutting initiatives, vowing to save $3-billion (U.S.) by 2019, up from its previous $1-billion estimate earlier in 2014.

"We continue to face a challenging macro-environment," Muhtar Kent, chief executive of Coca-Cola in Atlanta, told analysts in October.

Mr. Samoszewski said the company in Canada is reducing Coke's sweetness to put it in line with the product in the rest of the world – and not as a cost-slimming measure. He said the product's basic "secret formula" remains the same. The company's research found that Canadian consumers prefer the taste of Coke that's available in other parts of the world, he said. But the difference is subtle, he added.

Luke Sklar, founder of marketing consultancy Sklar Wilton & Associates, said generally, Canadian consumers prefer less-sweet fare than their American counterparts, with the exception of Quebec.

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Mr. Sklar predicted that few people will notice Coke's change in sweetness, although a small grassroots movement could emerge to complain about it. "It's more about the emotional connection to the brand than the actual taste."

Company officials said they didn't plan a marketing campaign to tout the taste change. In the past couple of years, Coca-Cola has been promoting a healthier lifestyle and its lower-calorie options.

The company is also introducing smaller packaging, including a slim 310-ml Coke can with 120 calories, compared with the standard 355-ml can with 140 calories (roughly 160 calories previously.) The new packaging, to be rolled out in March and April, will give shoppers, particularly those in smaller households, more options, Mr. Samoszewski said. The company will replace the 591-ml bottles with a 500-ml bottle (that has 200 calories).

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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