Gen Z hates diet sodas, but loves them with 'Zero Sugar' branding

"The first Pepsi Challenge tour in 50 years didn't feature regular or even Diet Pepsi. Instead, the blind taste-test showdown last year pitted Pepsi Zero Sugar against Coca-Cola Zero Sugar. At the Super Bowl next month, it's Zero Sugar that will star in the beverage company's Pepsi commercial, not the original formula. PepsiCo Inc. is running a 30-second spot, which can run more than $8 million, to hype the no-calorie drink."

""We've gone all in" on Pepsi Zero Sugar in the last two years, said Ram Krishnan, the chief executive officer of PepsiCo North America, so much so that the vast majority of its Pepsi marketing budget is spent promoting Zero Sugar. It's not just Pepsi. Across the soda aisle, Diet is out and Zero Sugar is in. Keurig Dr Pepper Inc, for one, didn't have a single Zero Sugar offering in 2020. Now it has more than 40."

Pepsi is prioritizing Pepsi Zero Sugar across major promotions, including a Super Bowl commercial, and has reallocated most Pepsi marketing spend to the no-calorie variant. Zero Sugar offerings have expanded across the industry, with Keurig Dr Pepper growing from zero to more than 40 Zero Sugar products since 2020. Both Diet and Zero Sugar are calorie-free and artificially sweetened, but Zero Sugar branding resonates more with younger consumers who avoid sugar and reject diet culture. Zero Sugar accounted for 52% of category sales growth last year, while full-sugar Pepsi and Coke sales declined and Diet Pepsi fell.

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