Exclusive: Pepsi is ditching Sierra Mist for a new Sprite rival | CNN Business


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New York
CNN
 — 

Pepsi is reaching for the stars in its latest effort to take on Sprite.

Starry, a new lemon-lime soda, is rolling out to grocery and convenience stores this week. It’s replacing Sierra Mist, a 24-year-old brand that has failed to gain traction against market leader Sprite, which is owned by main rival Coca-Cola

(KO)
.

Pepsi’s internal research showed that “demand for lemon lime flavored soda has never been greater,” the company said in a statement. That prompted Pepsi to develop a new lemon-lime soda that gives “people a choice in an area that’s been dominated by one brand for years.”

Starry is caffeine-free and is rolling out with two options: regular and sugar free. A Pepsi spokesperson told CNN that Starry has a “higher citrus flavors that are true to fruit and more aromatic” compared to Sierra Mist.

Sierra Mist launched in 1999 to much fanfare, however it never made much of a dent in Sprite’s dominance. Neil Saunders, managing director of retail for GlobalData told CNN that it’s a “confused brand” that looks like an “imitation of Sprite.”

“At a time when growth in traditional soda is sluggish and when the shelves are being flooded with new and innovative beverages being a tired second-tier player doesn’t really cut it,” Saunders said. He pointed out that brief rebrand to Mist Twist between 2016 to 2018 was “pointless” because it confused consumers.

Sales data from Beverage Digest given to CNN shows that Sierra Mist’s share of the soda market barely exceeding a tenth of 1% and has been on the decline for at least the past five years. Sprite, meanwhile, has grown its share of the soda market over the same time period to nearly 8%.

Starting from a clean slate, Pepsi is positioning Starry toward younger drinkers (i.e. its Gen-Z-appealing slogan that infuses internet slang: “Starry Hits Different”) that shifting away from consuming sugary drinks and and are becoming to loyal to smaller brands, like Olipop, that have their “finger more firmly on the pulse,” Saunders said.

“The [beverage] giants are aware of this and are trying to fight back as a way of growing market share and tapping into a market they don’t serve as well as they should,” he said. “The design of Starry is much more aligned with the Gen-Z aesthetic, which is bright, fun, whimsical, Instagramable, than many of Pepsi’s other offerings.”

Pepsi

(PEP)
is planning to promote Starry with TV and digital ads, as well as having a presence on social media like TikTok.

Despite the daunting task ahead for Pepsi to take on a rival that is more than 60-years-old, it could be an opportunity for Starry, according to Billy Roberts, a senior food and drink analyst for Mintel.

“Starry enters a market segment dominated by the Coca-Cola brand and, at the same time, is a new brand in an already-crowded carbonated soft drink category,” he said. “However, this could be to its advantage, bringing something new into a category where younger consumers have shown a penchant for breaking away from the tried-and-true to experiment with new flavors and formulations.”



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