Coke, Pepsi try to fatten bottom line with smaller servings

Tue Aug 5, 2014 3:48pm EDT
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By Anjali Athavaley

NEW YORK (Reuters) - About a year ago, Texas rancher George Krueger worried about his weight, and decided it was time to downsize - his Coke cans, that is.

Like increasing numbers of U.S. consumers, Krueger bet that by switching from regular-sized soda cans to 7.5 ounce "mini"-sized ones, he could make a dent in his daily calorie intake.

“It’s kind of a happy medium,” said the 62-year-old, who generally drinks a can a day, but sometimes goes for an extra one for more caffeine. “I can have my sweet fix but not feel guilty for having so much.”

U.S. soft drink companies are betting that soda drinkers like Krueger and their willingness to buy smaller cans, even for a higher unit price, will be a potential antidote to weak sales as consumers shift away from sugary soft drinks.

The mini-can is the latest move by food and beverage companies to boost their product offerings of smaller portion sizes that supposedly help consumers limit their caloric intake - even if there are signs that some end up reaching for another package or can.

Mini can sales grew 3 percent in 2013 while the rest of the carbonated soft drink category dropped, according to market research firm Euromonitor International.

Coca-Cola (KO.N: Quote) and Pepsi (PEP.N: Quote) said the cans were one of the few bright spots in U.S. soda sales in their second quarter earnings calls last month.

“Consumers are paying more and more attention to calories now,” said Simon Lowden, chief marketing officer at Pepsi Beverages North America, in a phone interview last week. While such concerns might have once helped diet drinks, growing health worries about artificial sweeteners have hurt that category, experts say.   Continued...

Regular and mini cans of Coke and Pepsi are pictured in this photo illustration in New York August 5, 2014. REUTERS/Carlo Allegri