Coca-Cola splashed back at Crystal Pepsi this week with a clear, sugar-free and calorie-free version of its 29-year-old diet cola Tab.
Coca-Cola USA president M. Douglas Ivester unwrapped Tab Clear at a New York news conference."This instant recognition of the Tab name and heritage gives us a significant advantage in introducing Tab Clear to today's consumers," Ivester said. "We expect consumers to consider it, like original Tab, an entirely new kind of soft drink."
Pepsi announced last week it plans national distribution of its clear cola in regular and diet versions, promising a major advertising campaign during the Super Bowl.
"I would guess they (Coca-Cola executives) are trying to piggy-back on the success of Crystal Pepsi, to some extent," said William Leach, an analyst at Don-aldson Lufkin & Jenrette Corp.
However, Ivester said Coca-Cola had no plans to bring out a non-diet clear cola.
Emanuel Goldman, a Paine-Webber Inc. analyst, said Crystal Pepsi's success can be seen just outside his window in San Francisco, where two vending machines offer the beverage for 50 cents.
"Pepsi is moving very aggressively with Crystal Pepsi, more aggressively than people might have suspected," Goldman said. "There are all sorts of promotional things going on."
Soft-drink makers have been trying for a bigger share of the beverage market by bringing out non-traditional beverages that keep pace with changing tastes. Besides Pepsi's announcement that it will go national with its clear cola, Coca-Cola recently said it would sell a flavored sparkling water beverage called Nordic Mist.
Pepsi test-marketed its clear cola for six months before deciding to expand distribution.
Ivester said the new drink would include caffeine, but no sugar or calories, and would be sweetened with aspartame, the sweetener better known by its brand name Nu-tra-sweet. It will be introduced in 10 U.S. cities in mid-January and nationally by midyear.
Ivester wouldn't disclose how much the drink cost to develop, what market share was expected or how much the company would spend to promote it.
Ivester said the company decided against using the Coke name for the drink because clear Coke would be an oxymoron that "does not compute."
Goldman said the company obviously wanted to avoid the fiasco it created in the mid-1980s, when it introduced a new Coke formula that bombed and then had to create the name Classic Coke as it switched back to the old recipe.