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Pepsi to Roll Out New Diet Soda by October

<i> From Bloomberg News</i>

PepsiCo Inc. said Tuesday that it will introduce Pepsi One, a soda that uses a new no-calorie sweetener called Sunett, now that the Food and Drug Administration has cleared the artificial sweetener for use in beverages.

The No. 2 soft drink company will roll out the drink by October with a massive advertising campaign in hopes of boosting sales in the sluggish domestic diet category. Pepsi One won’t replace its Diet Pepsi drink, the company said.

Sunett, also known as acesulfame-potassium, or Ace-K, is made by Nutrinova, a wholly owned unit of Germany’s Hoechst. Nutrinova said Sunett will revolutionize diet colas because mixing it with its leading competitor, aspartame, makes drinks distinctly more sugarlike without a diet aftertaste.

Pepsi One, to be sold in silver cans, will have one calorie and will be the first soda to use Sunett, blended with aspartame, for sale in the United States.

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A similar blend is used in the Pepsi Max drink the company sells overseas and in Canada, although that drink has a different taste than Pepsi One. Diet Pepsi also uses the new sweetener in overseas markets.

“The launch of a new cola is huge news,” said Beverage Digest Publisher John Sicher. “This new product from Pepsi will certainly shake things up.”

Diet drinks have lost stature in the $54-billion U.S. carbonated soft drink market, dropping to 22.9% of sales last year from 30% earlier, according to Beverage Digest, as new drinks attracted consumers. Diet Pepsi has a 5.5% share of the domestic market, down from a high of 6.4% in 1992.

Nutrasweet, a brand name for aspartame, is used in Diet Pepsi and Coca-Cola Co.'s Diet Coke. Triarc Cos.’ Diet RC began using Johnson & Johnson’s sucralose in April.

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Last year, Diet Pepsi’s domestic sales fell by 5.3 million cases, while Diet Coke’s sales increased by 7.6 million.

Coca-Cola isn’t expected to use the new sweetener in the U.S., at least for now, a company spokeswoman said.

Pepsi shares fell 6 cents to close at $41.19 on the New York Stock Exchange. Coca-Cola fell 50 cents to close at $85.50, also on the NYSE.


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