After years of growing consumer interest in lower calorie and less sweet alternatives, Coca-Cola Canada has announced plans to renovate its product.

Coca-Cola, along with PepsiCo and Dr Pepper Snapple, launched an initiative to lower calories by 20% by 2025, and Coca-Cola Canada’s latest announcement shows the brand has begun this task. After years of being perceived by consumers as too sweet, Coca-Cola Canada unveiled plans to introduce smaller packaging sizes and to reduce the amount of concentrate used to make full-calorie Coca-Cola. The decision aligns with consumers’ growing desires to nudge themselves toward better habits, as discussed in Mintel’s Help Me Help Myself trend.

According to Mintel’s Carbonated Soft Drinks Canada 2014 report, 47% of Canadians characterize carbonated soft drinks as too sweet, while 61% view them as a treat. Coca-Cola’s alterations attempt to combat these consumer characterizations while also confirming the long suspected belief among Canadians that the product is sweeter than international varieties.

Despite widespread negative media coverage and nearly half of consumers characterizing them as too sweet, carbonated soft drink sales in Canada are better than those in other markets that are experiencing declines. Mintel’s estimated 2014 volume sales were just under 2.8 billion liters and value sales totalled CA$2.8 billion, both of which represent growth from 2013. Sales for carbonated soft drinks are projected to continue increasing by 1-2% annually through 2019.

New formula, more packaging sizes could justify more ‘treat’ and meal occasions

One main target market for Coca-Cola’s new size and low-calorie formula is women. As noted in Mintel’s Grocery Retailing Canada 2015 report, women are often the main shoppers in households and decide what families, as a whole, consume. In fact, nearly six in 10 Canadian women are primarily responsible for purchasing groceries. Since women are more likely than men to perceive carbonated soft drinks as a treat (66% of women compared to 55% of men), the decrease in calories and concentrate could lead to more “treat”-appropriate options.

66% of Canadian women perceive soda as a treat compared to 55% of men

Regardless of gender, the new Coca-Cola could become more frequently paired with meals, as 46% of Canadians agree that carbonated soft drinks with less sweet flavors would better complement a meal. This highlights growth opportunities based solely on product placement. With its new size and formula, Coca-Cola sales could see increased sales just from being placed near deli or other foodservice options.

Smaller packages reflect Canadian CSD trends

Packaging innovations are a common tactic in the carbonated soft drink category. In fact, more than half of new product launches in Canada consisted of new packaging offerings in 2013. Coca-Cola’s expanded portfolio of smaller packaging could improve consumption rates and occasions as the brand plans to unveil a 310-ml. can, reduce its most popular 591-ml. immediate consumption package size to 500-ml., and increase availability of its 222-ml. cans and 237-ml. glass bottles.

Coca-Cola Canada’s new initiative to shrink its packaging and introduce a less concentrated, lower calorie product is a proactive step that addresses some of Canadians’ concerns with the category, especially among women. These changes fit in with current trends in the category and could lead to increased sales when combined with product placement and packaging innovations.

Mintel’s Global Food and Drink Analayst, Jennifer focuses on CSDs and trends. She joined the Mintel Food & Drink Platform after her tenure as a dedicated beverage analyst on the US Mintel Reports team. She researched and wrote many of the category reports with a focus on both alcohol and non-alcohol segments, and packaging. Jennifer came to Mintel in mid-2012 from a leading trade magazine that covered the US beverage industry from concept through distribution.

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