Coca-Cola Rolls Out Coca Cola Life Drink Nationwide - Analyst Blog

The Coca-Cola Company (KO) recently announced a nationwide launch of Coca-Cola Life, a naturally sweetened cola.

Coca-Cola Life, the company’s first reduced-calorie sparkling beverage sweetened with cane sugar and stevia leaf extract, contains 35% fewer calories than the leading colas. The 60-calorie, 8-ounce cola drink was initially launched in Chile and Argentina earlier this year.

Sales of the carbonated beverages of Coca-Cola as well as other soda makers, PepsiCo, Inc. (PEP) and Dr Pepper Snapple Group Inc. (DPS), are suffering due to the shift in consumer preference toward low-calorie drinks. Consumers are particularly vigilant about the use of artificial sweeteners, high sugar content and related obesity concerns.

Accordingly, Coca-Cola is trying to reinvigorate the category by offering more choices in package sizes, sweeteners and beverages — including more low- and no-calorie selections. In addition, the company is providing increased marketing support through strong integrated marketing campaigns like “Share a Coke” and “Coke with Meals” driving immediate consumption transactions; and providing transparency in labeling.

Pepsi is also testing cola variants using evolutionary natural sweeteners in several markets. Moreover, it expects to launch lower calorie, naturally sweetened non-cola products in the U.S. this year.

Dr Pepper launched the low-calorie version of its Dr Pepper brand of soft drinks — Dr Pepper TEN — in 2011 and thereafter expanded the platform with the rollout of TEN versions of 7UP, Sunkist Orange Soda, A&W Root Beer, Canada Dry Ginger Ale and RC Cola brands in the U.S. in early 2013. These drinks have tasted decent success, bringing new as well as lapsed consumers back to the category.

Stocks to Consider

Coca-Cola carries a Zacks Rank #4 (Sell) after it announced soft third-quarter 2014 results in late October. A better-ranked beverage stock is Monster Beverage Corporation (MNST), carrying a Zacks Rank #2 (Buy).

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