The Great Cola War exploded on two new marketing fronts yesterday.
Coca-Cola Co. surprised the industry by putting Diet Coke with the new sweetener aspartame on the market in Birmingham, Ala., and the company said it would introduce the new diet drink in Washington and several other cities within a month.
Hours later, Royal Crown Cola announced plans to market Diet Rite Cola not only with aspartame but also with less salt than its competitors.
With the announcements, the two companies opened up leads on the rest of the industry in the hotly competitive, multi-billion dollar soft-drink market. The makers of Pepsi-Cola, Seven-Up and Dr. Pepper are still negotiating with aspartame's maker, G.D. Searle & Co., to secure supplies of the new low-calorie sweetener, which is a combination of two amino acids.
Aspartame is seen by industry analysts as the potential vehicle for propelling diet sodas to 50 percent of the soda market in a few years from the current 18 percent share. They expect all soft-drink makers soon will offer aspartame-sweetened sodas.
"What we've been looking for is for the diet market to pick up more and more of the total market, and I think that's what's now going to happen," said Ron Morrow, an analyst at Shearson/American Express. "Aspartame means that the product is going to be better-tasting, and it's going to attract people to diet sodas."
Diet Coke, introduced last year, has quickly carved out 4 percent of the U.S. soft-drink market, making it the nation's fourth-best-selling soda, behind regular Coke (24 percent), Pepsi (18 percent) and Seven-Up (6 percent), according to analysts' reckonings. Although Seven-Up has been selling very strongly, analysts said yesterday that Diet Coke might be able to overtake it and move into third place in the next couple of years, while regular Coke and Pepsi would lose some market share.
All of the soda-makers are expected to use aspartame in combination with saccharin in their drinks, to offset aspartame's higher price and shorter shelf-life with its considerable taste advantage over saccharin. Pure-saccharin versions of the drinks will be discontinued, in part because of worries that saccharin is a carcinogen.
Analysts believe Coke is using a saccharin-to-aspartame ratio of about 75 to 25 in its new Diet Coke. The new soda will be available in Washington, Chicago, New York and several smaller markets in the next few weeks and is expected to be available nationwide by the end of the year.
Coca-Cola, which is backing the introduction of aspartame-sweetened Diet Coke with advertising and slight changes in packaging to emphasize the new ingredient, is expected eventually also to use aspartame to sweeten its other diet drinks, including Tab, sugar-free Sprite and caffeine-free Diet Coke.
Royal Crown's new Diet Rite Cola will be touted as both partially aspartame-sweetened and sodium-free. Royal Crown President Fred Adamany said in an interview yesterday that the company had originally intended the drink only to be sodium-free, but added aspartame when the Food and Drug Administration approved it for use in soft drinks last month. The new drink went on sale in Chicago yesterday, will be available in Phoenix, Tuscon and El Paso next week and in the national market by the end of the year.
Adamany said Royal Crown believes the sodium-free feature will appeal to Americans worried about consuming too much salt. Adamany said Royal Crown did not have plans to make its other products sodium-free, but would likely move to put aspartame in its other diet drinks.
The rush to aspartame may be limited by one factor--Searle's ability to produce the substance.
Searle is rushing to add aspartame-manufacturing capacity as the sweetener finds its way into more and more products. Earlier this week, Searle signed an agreement with Genex Inc. of Rockville to obtain amino acids used to make aspartame. Searle insists, however, that it has enough aspartame to go around.