Millennials almost killed Diet Coke -- now they're fuelling its turnaround

Hollis JohnsonDiet Coke’s comeback is producing results
  • Diet Coke finally reversed its downward spiral, Coca-Cola reported on Tuesday.
  • In January, Diet Coke launched new flavours, packaging, and advertising in an attempt to win over millennial customers.
  • Coca-ColaCEO James Quincey said that the company is considering adding “new, interesting” varieties to the Diet Coke line up, after flavours like Feisty Cherry and Twisted Mango helped win over millennial shoppers.

After years of struggle, Diet Coke is finally on the cusp of a turnaround.

On Tuesday, Coca-Cola reported that Diet Coke “returned to volume growth in North America” for the first time in years. The success follows a brand revamp announced in January, when Coca-Cola rolled out new flavours, packaging, and advertising for Diet Coke.

The revamp proved “bold enough and interesting enough” to reverse Diet Coke’s negative sales trend, Coca-Cola CEO James Quincey said in a call with investors. According to Quincey, the “small positive” growth by volume came from three major groups: lapsed Diet Coke drinkers, people drinking flavored and sparkling water, and millennials.

Diet CokeHollis JohnsonNew flavours helped drive Diet Coke sales growth

Attracting millennials has been front-and-center in Coca-Cola’s plan for Diet Coke’s comeback.

The sleek cans and new flavours, such as Feisty Cherry and Twisted Mango, aimed for a trendier drinker than Coca-Cola Classic. According to Quincey, one-third of the sales improvement by volume could be attributed to the new flavours, while two-thirds were connected to classic Diet Coke.

“I think the flavours certainly caught people’s attention. I can imagine we will now follow up with some new, interesting flavours,” Quincey said on a call with reporters on Tuesday.

Marketing has also been aimed at millennials, with a Super Bowl ad that was originally designed for social media and Instagram meme account Girl With No Job posting Diet Coke sponsored content for her 2.8 million followers. Quincey says that, while the company is continuing to analyse the results, the more “contemporary” advertising also played a role.

Historically, Diet Coke has failed to fully win over millennials, as younger Americans have turned away from soda.

For the last few years, Diet Coke has been the weakest link in the company’s cola lineup. Industry publication Beverage Digest reported Diet Coke US sales by the dollar dropped 1.9% in 2016.

Americans are increasingly cutting sugar out of their diets, meaning that they’re drinking less of sugary sodas. But shoppers remain suspicious of Diet Coke’s use of artificial ingredients. From 2005 to 2017, diet soda sales dropped a whopping 34%.

However, the suspicion over diet colas may be waning, as Quincey says Americans are grouping zero-calorie sodas alongside flavored sparkling water – one of the fastest-growing beverage categories.

“There’s a blurring of the categories going on,” Quincey said.

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