How To Fix A Product Management Mistake: Diet Pepsi

Pepsi's product managers screwed up Diet Pepsi, can they fix it?
Pepsi’s product managers screwed up Diet Pepsi, can they fix it?
Image Credit: Mike Mozart

I think that we do need to hand it to the Pepsi product managers – at least on paper they did everything that they really should have done. They conducted countless taste tests and tinkered with their Diet Pepsi product development definition all in a quest to give their customers what they wanted. However, in the end it turns out that they got it wrong – they completely misread their customers. Can they repair the damage that they’ve done?

What Went Wrong?

So what went wrong over at Pepsi? One year ago, the Pepsi product managers rolled out a new version of their Diet Pepsi product. This version of the product was sweetened with the sweeter sucralose. The previous version had been sweetened with the controversial sweetener aspartame. This should have been something that everyone could have put on their product manager resume. However, it has become very clear that this was a bad idea and now Pepsi is being forced to an about face and bring back the old formula for Diet Pepsi.

When they made the change to Diet Pepsi the Pepsi product managers found themselves in a bind. The first thing that was happening was that the drinkers of Diet Pepsi were in the process of shifting away from artificially sweetened diet drinks. The result of this was that sales of Diet Pepsi were experiencing a nose dive. The second thing that happened at the same time was that their core group of Diet Pepsi fans told them that they preferred the taste of Diet Pepsi made with aspartame over the new one that was made with sucralose.

Aspartame has been the preferred sweetener by the soda industry for years. However, aspartame has also been the focus of a lot of consumer health fears. The U.S. Food and Drug Administration has taken a very close look at aspartame and has concluded that it is safe. However, in the past few years a number of very vocal internet bloggers have started to blame aspartame for everything ranging from autism to cancer.

What Can Pepsi Do Now?

As you can well imagine, making a change to how you create one of your flagship products is not something that a company does lightly. The Pepsi product managers spent two years trying to decide what changes they were going to make. They surveyed thousands of Diet Pepsi customers and they taste tested several different variations of the sucralose-sweetened Diet Pepsi. Prior to the launch, more than 75% of the people said that they liked it.

Pepsi has now gone ahead and announced that they are going to be bringing back Diet Pepsi flavored with aspartame. The aspartame version of the product will be carried in stores along with the sucralose version. The reason that the Pepsi product managers had made the change in the first place was because of consumer surveys that said that the zero-calorie sweetener aspartame was the primary reason that Americans were no longer drinking diet soda.

Pepsi started to get negative feedback from their customers very quickly after they introduced the new version of their product. Social media lit up with long-time Diet Pepsi drinkers calling the new drink “yuck” and “unpalatable”. Ultimately, the internet’s ratio of negative to positive comments was 6:1. Initially, the Pepsi product managers thought that it would take a while for advocates of the new formula to surface. However, they never showed up. Outsiders have wondered why it took the Pepsi product managers so long to bring back the old version of the product when the sales of the product experienced a downturn immediately after the new product was introduced.

What All Of This Means For You

The product managers over at Pepsi have a real problem on their hands. They’ve been working with their customers for two years in order to create a version of their Diet Pepsi product that could turn around the decline in diet soft drink purchases. However, now that they have introduced the new version of their product, sales have plummeted. That was never part of their product manager job description!

The old version of Diet Pepsi had been flavored with the controversial sweetener aspartame. The new version is sweetened with the sweeter sucralose. The product managers at Pepsi thought that this change would reassure their customers who had been hearing bad things about aspartame from bloggers and others. The belief was that this change would bring existing customers back and would cause new customers to start to drink Diet Pepsi. However, it turns out that loyal Diet Pepsi drinkers did not like the new taste of Diet Pepsi and so sales have been going down ever since the new version was introduced. Pepsi has now announced that they are going to be reverting to the old formula.

Product managers know from past experience (think “new Coke”) that customer taste preferences can be a very dangerous thing to attempt to change. The Pepsi product managers attempted to make a radical change to their product in the hopes that it would keep their existing customers and attract more. However, what they have discovered is, just like customers everywhere, Diet Pepsi customers do not like change!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that it is worth it for Pepsi to sell two versions of Diet Pepsi or should they just drop the new version?

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What We’ll Be Talking About Next Time

So here’s a question for you: do you “tweet”? By that question, of course, I mean do you use the social networking tool Twitter? During the course of an average day do you micro-blog and send out messages to your “followers” that are no more than 140 characters in length? It turns out that a lot of people do this every day and that’s why the company, Twitter, has become so big and valuable. However, now it’s looking like the product managers at Twitter might have a problem on their hands…