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    Coca-Cola Announces Plans to Change Product Mix

    The beverage giant will phase out Vanilla Coke, Vanilla Diet Coke and Diet Coke with Lemon and add two new black cherry vanilla flavors to its line.

    Coca-Cola Co. is introducing new Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke in January 2006, and has announced plans to phase out its Vanilla Coke, Vanilla Diet Coke and Diet Coke with Lemon beverages in the United States by end of this year.

    Katie Bayne, senior vice president, Coca-Cola Trademark, Coca-Cola North America, said right now "Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke are what consumers are telling us they want." The simultaneous launch of Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke is a first for the company.

    "Cherry-flavored beverages are experiencing significant growth as are no calorie soft drinks," said Bayne. "Our innovative fusion of real cola, luscious black cherry, and smooth vanilla flavors creates a taste that is complex and delicious."

    Diet Cherry Coke and Cherry Coke will not be affected by this introduction. "Consumers have made Diet Cherry Coke and Cherry Coke leaders in their respective categories, so we are expanding our popular family of cherry-flavored soft drinks to include Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke," Bayne said.

    Regarding Vanilla Coke, which was introduced in the U.S. in 2002 and Diet Vanilla Coke in 2003, Coca Cola said it could return sometime in the future.

    "I don't know if we have ever taken out a flavor and brought it back to the market, but the landscape continues to change and we want to be as flexible as possible to adapt to the changing landscape," said Scott Williamson, a spokesperson for Coca-Cola.

    The phase out follows declining sales for the brands in the U.S. Vanilla Coke sales slipped to 35 million unit cases in 2004 from 90 million unit cases in 2002, while Vanilla Diet Coke sales dropped to 13 million unit cases last year from 23 million unit cases in 2003, according to Beverage Marketing, a beverage research and consulting firm. Sales of Diet Coke with Lemon, which made its U.S. entry in 2001, have fallen to 9.9 million unit cases in 2004 from 24 million unit cases in 2001, data showed.

    Analysts have said one of the keys to the company's future is to innovate new products that will help Coca-Cola capture more consumers who have moved away from sugary soft drinks to diet versions, or to healthier low-or no-calorie beverages such as water and orange juices with reduced sugar. Both Coca-Cola and PepsiCo Inc., the No. 2 soft drink company, are battling for the allegiance of increasingly picky U.S. consumers. The United States is the largest market for the soft-drink companies.

    "It is a rapidly changing beverage landscape and it is important for Coke to move quickly to deliver on what the consumer wants," said Gary Hemphill, managing director of Beverage Marketing. "The competition for shelf space is intense."

    Diet Black Cherry Vanilla Coke will feature a blend of aspartame and acesulfame potassium. Diet Black Cherry Vanilla Coke will be the sixth member of the Diet Coke family, which includes the flagship Diet Coke, Caffeine Free Diet Coke, Diet Coke with Lime, Diet Coke sweetened with Splenda and Diet Cherry Coke.

    Both Diet Black Cherry Vanilla Coke and Black Cherry Vanilla Coke will be available in a range of package sizes and will be supported by a variety of marketing programs. Further details on launch plans will be made available closer to the introduction.

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