No C2 for U.K.
Coca-Cola's new, not-so-hot-selling soft drink --- C2 --- will not get a chance to test the market in the United Kingdom.
The decision not to sell C2 in Britain, one of Coke's most important and profitable overseas markets, might be another sign of the fading fortunes of the mid-calorie drink.
Coke debuted C2 in Japan and the U.S. in June with hopes the drink would appeal to calorie-counting, carb-conscious consumers.
Pepsi brought out a rival, Pepsi Edge, setting off a summer-long blitz of marketing for the competing brands. Both products have roughly half the calories of regular colas.
Sales, however, have not amounted to much for either. Some consumers did not like the taste of the drinks, while others lost interest in lower-carb products.
C2's share of supermarket soft drink sales was 0.4% through early October in the U.S., down from 0.7% in the summer. Pepsi Edge was no better, at 0.3% in October.
Unlike some other new products, such as Vanilla Coke, which is available in 52 countries, Coke has not managed to send C2 into many markets. At the moment, it is sold in the U.S., Japan and Canada.
Pepsi Edge is available only in the U.S. and Canada.
Pepsi has no plans to expand Edge, given that the North American launch has not gone too well.
"It's still finding an audience," said Pepsi spokesman Dave DeCecco. "We know there is a group of consumers out there who want something like this."
C2 might have the hallmarks of a failure, too, but Coke remains publicly bullish about it. "We believe we have a strong brand that is resonating with the core target," said spokesman Kelly Brooks. "We will continue to fully support the brand in North America and Japan in 2005."
Coke has changed its strategy, though.
The company and its bottlers have backtracked on plans to make C2 a premium brand, with higher prices and limited packages. C2 is now selling at lower prices and in a wider array of packaging, including 2-liter bottles.
Analyst Bill Pecoriello of Morgan Stanley, an early skeptic about the prospects for mid-calorie colas, thinks C2 will not develop beyond being a small, niche product. In part, it is because it still has too many calories for some buyers.
"We continue to believe that the poor performance of the product results from its inherent qualities and not the pricing or package strategy," he said.
The Brits, meanwhile, will be urged to buy still more Diet Coke, which is already a bigger seller there than regular Coke.