Coca-Cola to end production of Tab soda

Dive Brief:

• Coca-Cola will stop making its iconic Tab soda, the company said in a statement.
• Tab, introduced in 1963, was the company’s first diet cola. After becoming popular in the 1970s and early 1980s, it faded after the launch of Diet Coke in 1982. The Wall Street Journal noted that even after Tab’s market share fell to nearly nothing, Coca-Cola kept producing the soda to appease a fiercely devoted fan base known as Tabaholics.
• Tab is the latest brand to be discontinued as the beverage maker streamlines its portfolio during the pandemic. Earlier this year, Coca-Cola closed its Odwalla juice and smoothie brand and recently started shuttering its Zico coconut water.

Dive Insight:

Once a soda icon, Tab is getting canned.

Coca-Cola CEO James Quincey has repeatedly said the Atlanta company would focus on brands that are growing and have the potential to achieve a large scale. Tab clearly did not fit into this category. The diet soda brand revolutionized the space but has since been overshadowed by Diet Coke and Diet Pepsi. It has become hard to find on most store shelves.

Quincey has noted that of the company’s 400 “master brands,” more than half are single-country products with little to no scale. He estimated the combined revenue of those brands is approximately 2% of the company’s total. Overall, Coca-Cola has announced it plans to cut its 500 brands by more than half.

“We’re prioritizing bets that have scale potential across beverage categories, consumer need states and drinking occasions,” Cath Coetzer, global head of Coca-Cola’s innovation and marketing operations, said in a statement. “This isn’t about paring down to a specific number of product offerings under our brands. The objective is to drive impact and growth.”

In the case of Odwalla, the product required a specialized chilled delivery network not needed for most of its other drinks. Zico suffered from a drop in demand for coconut water and trailed market leader Vita Coco.

While Tab fits easily within Coca-Cola’s portfolio of sodas, there is little reason for the company to make a product forgotten by most consumers who have turned to other sugar-free beverages including teas, waters and coffees.

The Wall Street Journal noted that Tab had 0.1% of the $22 billion in global sales of diet cola in 2019, citing Euromonitor International data. The top sellers were Diet Coke, with 35% of sales, and Coke Zero Sugar, with 22%.

In addition to these brands, Coca-Cola also said it will stop making Coca-Cola Life, a lower-calorie version of the cola sweetened with stevia, and Diet Coke Feisty Cherry. It’s also cutting regional offerings, including Northern Neck Ginger Ale and Delaware Punch.

Instead of producing these less popular offerings, Coca-Cola can invest the R&D and marketing dollars it saves into growing brands that offer it the best chance for growth, such as its Aha flavored sparkling water or Topo Chico sparkling water. Coca-Cola, which purchased Topo Chico in 2017, recently announced Topo Chico Hard Seltzer, which will be manufactured, marketed and distributed by Molson Coors in the U.S. in 2021.

As Coca-Cola refines its product assortment, the company also has turned to job cuts to help streamline its business. Coca-Cola in August said it would offer buyouts to about 4,000 employees in the U.S., Canada and Puerto Rico as part of a broader restructuring.

Coca-Cola was already paring down its portfolio but the coronavirus pandemic has accelerated the initiative in an effort to make the company more nimble and in a position to grow in the future. As the 134-year old company continues to reposition itself for its next chapter, it wouldn’t be a surprise to see other beloved brands like Tab meet their fate.

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