Report: Pepsi to Introduce Mid-Calorie Drink

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PepsiCo Inc is getting ready to slim down this summer by offering a cola with 40 percent of the calories of its

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Pepsi-Cola soft drink, an industry publication reported on Friday.

The new drink, called Pepsi Next, will have 40 calories per 8-ounce serving, or 60 calories per 12-ounce can, according to Beverage Digest. Regular Pepsi has 100 calories per 8-ounce serving and 150 calories per 12-ounce can. Diet Pepsi has no calories.

Beverage Digest, citing sources, said the new drink may be launched in July or August.

A spokesman for PepsiCo declined to comment.

Past versions of such drinks, which taste more like full-calorie colas than no-calorie colas, have not lasted long. However, the market may be ripe for these types of drinks now, as people try to allow themselves small indulgences without blowing their diets.

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Thirty-four percent of people are very interested in a cola that has half of the calories of full-calorie Coke or Pepsi but "almost identical" taste, according to a Consumer Edge Research survey of 2,000 consumers 13 or older conducted in January.

"Until we can see that the product can deliver on taste and the company can get the messaging right, we find it difficult to get too excited," said Bill Pecoriello, president of Consumer Edge Research.

He does not expect Coca-Cola Co to quickly follow Pepsi back into the mid-calorie game.

In 2004, Coke had its own mid-calorie drink, C2, while Pepsi had Pepsi Edge. Neither brand lasted more than a couple of years.

Shares of PepsiCo were up 1 percent to $65.04 in afternoon trading, while Coke's shares were up 1.6 percent to $67.41.

DIET DEMAND

Pepsi is not alone in the race to attract those who want more taste with fewer or no calories. Coca-Cola Zero has been growing and Dr Pepper has seen great early success with Dr Pepper 10, a 10-calorie version of its namesake soda.

Dr Pepper Snapple Group Inc may bring Dr Pepper 10 out across the United States by the end of this year, Chief Executive Larry Young told Reuters last month. 1/8ID:nN14164837 3/8

Beverage Digest estimates that diet sodas gained market share in 2010 and now comprise more than 30 percent of the entire category. Diet Coke overtook Pepsi as the No. 2 soda in the United States last year, behind Coca-Cola, according to rankings issued by Beverage Digest last month. 

Pepsi Next may be the first of several such drinks for PepsiCo. The company applied for the

"Pepsi Next" trademark on January 20 and filed on February 1 to trademark "Mt. Dew Next" and "Sierra Mist Next," Beverage Digest said.

Pepsi Next's recipe is still unclear, with the publication citing one source saying that the new drink would likely be sweetened with a mixture of high-fructose corn syrup, sucralose, ace-K and aspartame, while another source said there could still be some tweaks to the sweetener blend.
Bottlers said PepsiCo expects the new drink to sell about 30 million cases in its first full year, Beverage Digest said, noting that Coke's C2 sold 25 million cases in its first year.

PepsiCo is expected to promote Pepsi Next on Simon Cowell's new singing competition television show "X-Factor," Beverage Digest said, citing a bottler. The show is set to debut this fall on Fox, which also airs "American Idol." Coca-Cola has had long-time prominent product placement on "American Idol."

(Reporting by Jessica Wohl, editing by Gerald E. McCormick and Gunna Dickson)

((jessica.wohl@thomsonreuters.com +1 312 408 8132; Reuters Messaging: jessica.wohl.thomsonreuters.com@reuters.net))

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