Will Nitro Pepsi gas up soda sales?
- Pepsi just announced its latest innovation in the soda space: Nitro Pepsi, according to BevNet.
- Touting a “velvety, cascading foam” as opposed to the more traditional, flatter bubbles of carbonated soda, Pepsi will become the first nitrogen-infused soda, which it will produce in both Classic and Vanilla flavors.
- The company will begin sampling Nitro Pepsi at select venues and cultural events, including Super Bowl LIII in Atlanta on Sunday. Further details about the prototype product will be released in the near future, according to the company.
For 12 years, the carbonated soft drink market has grappled with a slowdown in sales as consumers have shunned sugary beverages in favor of healthier alternatives like tea, water, juice and sports drinks. In fact, soda's share of the U.S. beverage market fell from 22.1% in 2012 to 19.7% last year, according to the Beverage Marketing Corporation. In 2016, it was eclipsed by bottled water as the most popular drink in the U.S.
With this challenge unlikely to ease up on the industry, manufacturers have begun to search for alternative ways to inject some life back into their products to both increase their growth and retain existing customers. Increasingly, this means reinventing traditional soda products with futuristic textures and flavors.
Coca-Cola saw a revenue boost during the first quarter of 2018 from its new line-up of Diet Coke — Ginger Lime, Feisty Cherry, Zesty Blood Orange and Twisted Mango. Likewise, the Atlanta-based soda giant debuted its Arctic Coke during the summer of 2016, and quickly realized it might have a hit — sales increased between 15% and 20% at locations with the special coolers for the product. Seeing that a reinvigoration of soda was possible, it seems Pepsi looked across the other beverage industries for inspiration and settled somewhere between the booming craft beer and specialty coffee segments.
Coffee, especially chilled and cold brew varieties that benefit from an injection of nitrogen, has seen explosive growth. The segment skyrocketed 580% between 2011 and 2016, Mintel research noted. At the same time, consumers love the creamy smoothness of draft Guinness, which uses a nitrogen tap. However, consumers are becoming less interested in alcoholic beverages, and it is apparent there’s a market for non-boozy, carbonated drinks.
Pepsi fused consumers’ love of non-alcoholic and nitrogen carbonation into what some have called an “ice cream float… without any ice cream involved.” While prototype tests have gotten positive reviews from food and beverage writers, it remains to be seen whether average customers will pick up this new nitrogen-infused soft drink.
The main challenge to rolling out this product is how to distribute it to thirsty customers. Currently, not many places have the necessary equipment to distribute nitro on tap. Instead of tap dispensers, the other option might be to replicate a Guinness-esque can where a little ball preserves the carbonation, but it's unclear if Pepsi envisions this as a beverage to sell at grocery and convenience stores.
Transporting these futuristic carbonated beverages to consumers is not just a challenge for Pepsi. Coca-Cola has a machine where consumers can instantly transform a 20-oz bottle into an Arctic Coke, but it's just at a handful of convenience stores, mostly in California.
Once it becomes easier for consumers to access these high-tech sodas, there is still a chance that they may shun them due to their lack of better-for-you ingredients. At the same time, studies have shown that taste can trump ingredients when it comes to customers making their final purchase decisions. So if Pepsi can bring a new, alluring taste profile to people, there is a chance that their new Pepsi Nitro will be a success.