In the soft-drink business, they haven't seen anything like it since the introduction of diet soda: a flood of new flavors to quench your thirst are pouring onto the market from the bottlers who bring you Coke, Pepsi, 7-Up and other brands.

Soda pop proliferation is adding Diet Coke, Pepsi Free and Like to the choices open to consumers who down an average of 420 cans of soft drinks a year.

The beverage barons are simultaneously giving soda swiggers more and less: more flavor choices and less caffeine, calories and sugar.

Diet drinks already account for 18 percent of the soft-drink market and that could grow to 30 percent if the new brands catch on, say industry analysts. Caffeine-free soda sales -- which weren't even considered a separate category until 7-Up began making an issue of caffeine earlier this year -- could ultimately account for as much as 15 percent of industry output, they say.

Not even the bubbling diet soda business is growing enough to absorb all of the newcomers. Analysts caution that it may not be long before overcrowding causes some of the new products to turn from fizz to fizzle.

"Competition is very rough out there, plain and simple," says Merrill Lynch & Co. beverage analyst Alan Kaplan, who several weeks ago lowered his rating of the stocks of the major soft-drink manufacturers in anticipation of the cola wars.

Consumption of soft-drinks has grown steadily, 2 or 3 percent a year, even with the recession, he says, but much of the growth has been bought at the expense of drastic discounting and heavy marketing campaigns.

Perhaps the biggest of the new pops is Diet Coke, the new brand being introduced in the Washington area this week by the giant Coca-Cola Co. Coke has been the best selling soft drinks since long before the pop-top was invented and Coca-Cola's Tab is the No. 1 diet drink.

Coca-Cola is counting on its name and a massive promotional campaign to make an instant success of Diet Coke.

"It has the equity and strength of the Coke name," Jim Harford, president of Mid-Atlantic Coca-Cola Bottling Co. Inc., said in an interview last night at the introduction of the beverage at the Sheraton-Washington Hotel.

Harford said Coke expects the new drink will carve out areas of the soda market untouched by Tab, which has a young, feminine image. "We expect that Diet Coke will be No. 1 within a year of its introduction and that Tab will be No. 2," he said. "The name of the game is market share, and we don't see why we can't have the No. 1 and No. 2 diet products."

Coke officials aren't the only ones evervescing about the new product. "I think by the end of 1983, Diet Coke will be the best-selling diet soft drink in the country," predicts Jeffrey Weingarten, an analyst at Goldman Sachs.

Kaplan speculates that Diet Coke could take away half of Tab's 25 percent share of the diet-soda market. Industry speculation is that Coke may eventually shift the Tab name onto a caffeine-free drink -- a product for which the company currently professes to have no plans.

Joe Block, vice president of consumer marketing programs at arch-competitor Pepsi Cola Co., claims consumers will be confused by the distinction between Tab and Diet Coke. "Diet Coke is nothing new," scoffs the Pepsi generation's mentor.

Analysts praise Coca-Cola for bringing out a new diet-drink market at a time when the rest of the industry is rushing into the more chancy caffeine-free field. "I think Coke's strategy of fishing where the fish are is going to be more successful," Weingarten says.

Coke is the only big bottler not yet dispensing a caffeine-free drink.