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Coca-Cola launches low-carb C2 cola
Soft drink giant pitches new cola at Atkins followers, 'American Idol' stars host Hollywood event.
May 24, 2004: 6:18 PM EDT

LOS ANGELES (Reuters) - Coca-Cola Co. Monday unveiled C2, a soft drink with less than half the calories and carbohydrates of the original Coke, and an ad campaign pitched at followers of trendy Atkins-style diets.

Coke uncapped its new drink, which features the iconic red label with black lettering instead of the traditional white, at a glitzy Hollywood event co-hosted by "American Idol" stars Ryan Seacrest and Paula Abdul.

C2 will hit U.S. store shelves in June, just ahead of rival PepsiCo Inc., which said Monday that it will launch its own lower carbohydrate soda in mid-June.

"American Idol" will also figure prominently in C2's launch, with the first commercials -- built around the Rolling Stones classic "You Can't Always Get What You Want" -- debuting on the show's finale on Fox on Tuesday and Wednesday.

"Consumers are telling us they want another choice, and they haven't been getting it until now," said Don Knauss, Coca-Cola North America President and Chief Operating Officer.

He predicted that C2 would make the biggest splash in the cola world since Diet Coke was introduced 22 years ago.

But no mention was made at the Hollywood event, held next door to the studio where "American Idol" is broadcast and in the same building as the Academy Awards, of Coca-Cola's disastrous 1985 launch of New Coke.

The company alienated many Coke drinkers at the time by pulling so-called Classic Coke from store shelves in favor of the new drink. This time, the company will sell C2 side by side with the original Coke, hoping to boost overall sales by 50 percent.

"All the great taste"

C2 -- which is billed as having "all the great taste" of Coke -- is aimed at cola drinkers who want fewer calories and carbs but find diet soft drinks hard to stomach, and Coke drinkers who want fewer calories, fewer carbs and less sugar.

A company spokesman said it expected 15 percent of C2 customers to be people who do not currently drink carbonated beverages. The C2 ad campaign will be aimed at the drink's target demographic: 20- to 40-year-olds, especially men.

Coca-Cola Company
Atkins Diet

An eight-ounce serving of C2 has 45 calories and 12 grams of carbohydrates, compared with 100 calories and 27 grams of carbohydrates in original Coke.

Erin Ashley Smith, an analyst at independent research firm Argus Research, said many people would want to try C2 when it launches, ensuring strong, initial sales. But how long the fad will last -- and how much C2 will cut into sales of Diet Coke and regular Coke -- remains to be seen, she said.

Other beverage makers have faced similar problems, she said, noting that although Anheuser-Busch Cos Inc. has been successful with its low-carb Michelob Ultra, the success of that offering has hurt sales of Bud Light.

"Everyone is going to want to try it," Smith said of C2, adding that some consumers might also decide to drop regular Coke based on the company's pitch.

"If it tastes the same, why not go for half the carbs while I'm at it?" she said.

Coca-Cola said it would hand out about 12 million free samples of C2 in Los Angeles, New York, Chicago, Atlanta and Miami this week. Employees of Coca-Cola and its bottlers will also get a free case to help build a buzz around the launch.

Coke (KO: Research, Estimates) shares gained 0.9 percent in active NYSE trade Monday.  Top of page

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