Bubbling Along

The U.S. soft-drink industry is growing fatter on--of all things--diet drinks. With Americans consuming an average of 227 bottles each per year, the soft-drink bottlers have upped their sales 64% in the last five years, to a record $2.3 billion. Sales are expected to rise another 10% this year, and the hottest item in the boost will be the diet drinks, which are expected to go up at least 50% above their 1963 sales of $200 million. More than two dozen diet drinks are fighting for a share of the growing market.

Guilty Plea. This rapid growth has involved the soft-drink makers in a feud with the sugar industry, since drinks for the weight watchers contain such sugar substitutes as saccharin and cyclamates. Sugar refiners are spending $1,000,000 on ads to downgrade the benefits of diet drinks, claiming that "trying to lose weight by drinking them is like trying to lighten an airplane by emptying the ashtrays." Last week Royal Crown Cola, whose Diet-Rite has captured half of the diet-cola market, retaliated with its own ads. Calling its critics "sugar daddies," Royal Crown said: "If it's wrong to do millions of people a favor by taking the sugar out of cola, Diet-Rite pleads guilty."

Though a few other diet drinks preceded it, Diet-Rite was the first to really tap the 40 million Americans who are classed as "active weight watchers." Royal Crown has been working on it for years in the labs, was ready to take advantage of the diet fad three years ago. Royal Crown's energetic president Wilbur H. Glenn persuaded merchants to move Diet-Rite away from the dietetic foods and into the regular soft-drink area, has seen sales go from nothing to more than half of Royal Crown's $37 million in sales last year.

Once Royal Crown proved that diet drinks were no fad, the big bottlers pushed diet drinks of their own. Canada Dry President Roy W. Moore Jr. brought to market no fewer than eight diet drinks, from coffee flavor to ginger ale. Coca-Cola launched Tab, and Pepsi-Cola brought out Patio Diet Cola. Pepsi President Donald Kendall recently decided to take advantage of the $30 million spent advertising Pepsi this year, has begun to phase out Patio Diet in favor of a new drink called Diet-Pepsi, which is being promoted with the slogan "Enjoy Pepsi either way." All of them have also begun active research programs to improve the taste of the diet drinks, have already made giant strides toward this aim. Partly because the soft-drink market has grown so fast, Coca-Cola's share has slipped. But Coke remains the world's biggest soft-drink maker, and President J. Paul Austin increased its sales in 1963 by 12%, to more than $637 million, by pushing its coffee, convenience foods and Minute Maid orange juice.

Cognac & Coconuts. The diet-drink boom is taking place side by side with a major shift in U.S. tastes to more offbeat flavors and less sweet soft drinks. Soft drinkers can now choose from more than 300 different labels, flavored with everything from cognac (Dr Pepper's Pommac) to coconut milk (Yoo-Hoo's Milkette). Schweppes' Bitter Lemon now accounts for a third of Schweppes' sales in the U.S., though it has only been on the market one year. Even Elsie the Cow is out to milk the market. Borden has just put on the shelves its first soft drink--a milk-laced beverage called Moola-Koola. One reason the soft-drink people are convinced that their boom can only grow is that the biggest group of soft-drinkers are on the verge of a population explosion: the next ten years will see an influx of 6,000,000 teen-agers into the market.

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