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Pepsi Follows Coke in Trying to Solve Major Soda Problem

Will this turn out to be the giant's winning product?

Taste has always been the biggest issue when it comes to different types of sugar-free beverages. Whether sodas are made with aspartame or sucralose as the artificial sweetener, many consumers often complain of a chemical aftertaste that is absent in soft drinks made with regular sugar.

In the last five years, soft-drink brands have taken a very active approach to working out formulas with less of an aftertaste and brought about with them an explosion in zero-sugar options. Worth $125.3 billion in 2020, the sugar-free carbonated drink market is expected to reach $243.5 billion by 2030.

For PepsiCo's  (PEP) - Get Free Report, Pepsi drinks what currently goes under the name Zero Sugar has gone through a number of its own transformations -- in 2007, Diet Pepsi Max first came to the U.S. The sugar-free cola product was later rebranded as Pepsi Max and, in 2016, to Pepsi Zero Sugar.

Now, Pepsi is once again tinkering with its Zero Sugar products -- but this time it's with the recipe. On Jan. 13, the soft drink giant announced that it was launching a "new and improved Pepsi Zero Sugar" that is has manage to achieve through "taste and trial."

A New And Improved Pepsi Zero Sugar Recipe

Just as with the notoriously-secret Coca-Cola  (KO) - Get Free Report recipe, Pepsi is keeping the exact formula under wraps but promises to give drinkers a "more refreshing and bolder taste" with less aftertaste.

"The product is truly a breakthrough as it is the best zero sugar cola we've ever had -- period," Todd Kaplan, who heads Pepsi's marketing team, said in a press statement. "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."

To celebrate the launch, Pepsi is giving away 10 million free cans during the NFL Playoffs beginning on Jan. 14. The soft drink giant is also sinking some serious marketing money into the product so those watching the playoffs both in person and on television will be bound to see more than one ad for Pepsi Zero Sugar.

For everyone else, the new recipe will replace the product one currently finds in stores and wherever Pepsi is sold.

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So Many Zero-Sugar Options, So Little Time

Soft drink companies regularly tweak the formula behind its sugar-free drinks. In 2017, the Coca-Cola Company also replaced the  Coke Zero drink it launched in 2005 with Coca-Cola Zero Sugar. 

The product is an alternative for the Diet Coke that launched in 1982 and is the more commonly-bought calorie-free Coke product -- the latter's taste is more "tinny" while the newer Coca-Cola Zero Sugar is closer to replicating the original. 

The term "zero sugar" is becoming more prolific than "diet" when it comes to sugar-free beverages, but the beverages still lag in popularity. Diet Coke has consistently ranks third as the most popular carbonated beverage choice in the U.S. when it comes to actual sales -- the first and second spots are taken, respectively, by regular Coke and regular Pepsi.

Still, demand for sugar-free carbonated drinks in general has gone through an explosion in the last half-decade. As brands experimented with new formulas and different marketing campaigns that ease away from the word "diet," sugar-free soda sales rose by 19.5% between 2018 and 2021.