Worrying signs for Vanilla Coke

Vanilla Coke was launched just over a year ago amid much hype and fanfare. Initial sales of the beverage were impressive, and led to Coke increasing its market share in the United States for the first time in years.

However, the latest financial figures paint a somewhat different story. Sales of the product have plunged, forcing Coca-Cola to think carefully about its diversification strategy.

Figures for a four-week period that ended 6 July 2003 show a year-over-year sales volume decline of over 66 per cent in retail outlets and mass merchandisers.

Indeed, the declining fortunes of Vanilla Coke illustrates a growing trend that must worry beverage manufacturers. Variations of existing products have simply not taken off across the industry.

As a result, investment in new product development and marketing has not paid off, and some manufacturers are returning to concentrate on existing well-established brands.

Soft drink giants in the US started to experiment with new products a few years ago. In 2001, Pepsi launched Mountain Dew Code Red, and Vanilla Coke came out in May 2002. Both Coke and Pepsi also have lemon-flavoured variants.

Coca-Cola​ still believes that the product is a solid brand. Vanilla Coke is sold in over 30 countries and retains a strong presence in many markets.