PepsiCo reformulates Pepsi Zero Sugar, replaces Sierra Mist with STARRY in New Year shake-up

By Ryan Daily

- Last updated on GMT

Image credits: PepsiCo
Image credits: PepsiCo

Related tags sprite Coca-cola Soft drink Pepsico

To kick start 2023, PepsiCo this week freshened up its beverage line-up, unveiling a new formulation for Pepsi Zero Sugar and releasing STARRY, a lemon lime-flavored soda that is replacing Sierra Mist.

STARRY is currently available in regular and zero-sugar versions in US retailers and foodservice chains in a variety of sizes. To raise awareness of the STARRY brand, PepsiCo will make a series of announcements about its marketing plan in the coming days, which will feature national TV commercials, digital and social media content, leveraging the tagline 'STARRY Hits Different.'

Shaking up the lemon-lime soda category

With the launch of STARRY, two questions are on many beverage industry watchers’ minds: can STARRY make inroads with younger consumers, and can PepsiCo take market share away from Coca-Cola in this category?

When it comes down to why PepsiCo is targeting Gen Z consumers with STARRY, Billy Roberts, senior food and drink analyst at Mintel, finds two reasons for it, as he shared with FoodNavigtor-USA. One is a clear effort from PepsiCo “to establish a role for the brand in the purchase repertoires of Gen Z consumers​,” Roberts said.

And another reason is while younger generations are generally moving away from sugary drinks, Mintel research found that both Gen Zers and Millennials are nearly twice as likely to consume lemon-lime soda than their older counterparts, he added.

However, the challenge won’t simply be to capture the attention of Gen Zers and Millennials consumers but also to pull it away from the current leader in this beverage segment – Sprite. Or, as Roberts puts it, "the challenge for STARRY will be making a space for itself in that market that is so clearly devoted to Sprite.”

PepsiCo acknowledged Sprite’s position in the category in the STARRY product press release​, stating that STARRY “[gives] people a choice in an area that's been dominated by one brand for years."

In its most recent attempt to dethrone Sprite as the leader in the lemon-lime soda category, PepsiCo "failed to make much of a dent in the market​" with Sierra Mist, even with reformulations and relaunches, Roberts said. And before Sierra Mist, PepsiCo tried to "usurp Sprite" with Slice and Storm with similar results, he noted.

Sustainability is a selling point

One way STARRY might be able to distinguish itself from the competition is through on-pack messaging around sustainability, which tends to resonate more with younger consumers, Roberts speculated. While PepsiCo promised "steps on sustainability​" with STARRY, he acknowledged that the specifics are unknown, and it's too early to gauge how they might draw consumers to the product.

While PepsiCo hasn’t spelled out its sustainability plans with STARRY, Coca-Cola has already made some sustainability steps with Sprite. In July 2022, PepsiCo announced that Dasani and Sprite were shifting away from plastic PET packaging in the US, which meant Sprite was losing its signature green color.

When green PET is recycled, it's typically used in single-use products such as clothing and carpeting, as Rachel Arthur, editor at our sister publicatio  Beverage Daily, shared in her coverage of the news​. The shift will increase the availability of food-grade plastics, she added.

The new Pepsi Zero Sugar: No ginseng, less caffeine, new sweetener system

Separately, PepsiCo shared​ on Friday that it has reformulated Pepsi Zero Sugar to reduce caffeine, remove ginseng and tweak the sweetener system, although it still uses aspartame and acesulfame Potassium (ace K) as its core high intensity sweeteners.

The new formulation delivers a taste profile closer to regular Pepsi, said PepsiCo, which said consumer preference testing has shown that the new formula is more “refreshing, tasty, having a real cola taste, smooth, able to pair with food and more."

Just as PepsiCo struggled to compete in the lemon lime-flavored category with Sierra Mist, Pepsi Zero Sugar hasn’t been able to compete with rival Coke Zero Sugar, according to Beverage Digest​, which said Pepsi Zero Sugar grew 17% in the first nine months of 2022, while Coke Zero Sugar was up 30% year on year.

Pepsi is supporting the new formulation – coming a year after Coca-Cola unveiled a tweaked formulation for Coke Zero Sugar - with new commercials airing during the NFL playoffs and Super Bowl, said chief marketing officer Todd Kaplan in a release:  

“The product is truly a breakthrough as it is the best zero sugar cola we’ve ever had – period. We’re so confident in its taste, that we are making up to 10 million free Pepsi Zero Sugars available to consumers so that people can try it for themselves.”

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