Share this story
Close X
Switch to Desktop Site

Soft-Drink Market Awash in Caffeine


New war is brewing in the soft-drink market - over caffeine.

The repertoire of products that will hit store shelves over the next few months includes everything from caffeinated water and orange juice to coffee-blended cola. The newest such product is Coca-Cola Company's drink Surge, a green, citrus-flavored soda high in both caffeine and calories.

About these ads

The sudden craze for caffeine points up the fickleness of consumer tastes, as well as companies' eagerness to cater to them. A few years ago, when Americans wanted the stimulant out of their drinks, both Coke and Pepsi rolled out caffeine-free colas. But now coffee houses are booming, and a new generation of young adults, raised on caffeine, want something they think delivers more of a punch.

The market for caffeinated, high-energy drinks is "a very large niche that continues to need to be filled, and we think Surge is going to appeal to a lot of people who like that in a soft drink," says Coca-Cola spokes-man Mart Martin. Coke is so confident about Surge's success that it is planning to roll the new product out in January without being test-marketed.

With Surge, Coca-Cola hopes to lure young consumers who have made PepsiCo Inc.'s Mountain Dew (also high in caffeine) one of the best-selling soft drinks in America.

"I guess it's less socially risky to come out with a product today that has caffeine than it was five years ago," says beverage analyst Jay Nelso with Brown Brothers Harriman & Co.

Surge is Coca-Cola's biggest gamble on a soda brand since it decided in 1985 to replace the Coca-Cola formula with New Coke, a flop that cost the Atlanta-based company $35 million.

The drink, being marketed with the slogan "Feed the Rush," contains 52 milligrams of caffeine per 12-ounce can, compared with Coke's 47 milligrams. Mountain Dew also has 52 milligrams per 12-ounce can, and Pepsi has 38. That compares with 200 milligrams for the same-size serving of coffee. In addition, Surge contains a high-energy carbohydrate called maltodextrin, also found in Coca-Cola's sports drink PowerAde.

"It's not so much that they [consumers] are screaming, 'caffeine, caffeine, caffeine.' They're screaming, 'energy, energy, energy,' " says Havis Dawson, editor of Beverage World Magazine in New York. "Everybody is busier and has to be energetic at all hours of the day," so people feel a need for a stimulant, he says.

About these ads

Some critics question the marketing strategy. "I am very concerned with children drinking soft drinks with high levels of caffeine," says Melinda Hemmelgarn, editor of Food & Nutrition Resource Newsletter.

Meanwhile, Coke's chief rival, Pepsi, is testing-marketing in Philadelphia Pepsi Kona, a blend of Pepsi-Cola and coffee. And it has slowly been rolling out its berry-based cola, called Josta, that is high in caffeine.

Added to the mix is caffeinated water, which debuted in 1995 with Water Joe. A half-liter bottle contains 65 milligrams of caffeine. About 400,000 bottles of Water Joe are sold each week. The drink has spawned at least a dozen imitators. Industry analysts, however, say that caffeine water has captured a tiny percentage of the market and that products similar to Pepsi Kona have come and gone over the years.