Coca-Cola to market first 'natural' mid-calorie cola

Coca-Cola Co announced plans on Wednesday to sell a mid-calorie cola sweetened with sugar and the naturally occurring no-calorie sweetener stevia in Argentina, becoming the first to market with a product long seen as being critical to the soda industry's growth.

The new product, Coca-Cola Life, will have half the calories of regular Coca-Cola.

The world's largest soda company has used stevia in 45 products, such as Vitaminwater Zero and Fanta Select, but never in its flagship cola. The move would put Atlanta-based Coke ahead of archrival PepsiCo Inc in the race for better-tasting low-calorie beverages as the U.S. carbonated soft drink market continues to decline because of growing concerns about obesity.

Coca-Cola Life will go on sale this week in Argentina, where Coca-Cola has 50 percent of the soda market, compared with Pepsi's 16 percent share, according to industry newsletter Beverage Digest, which was first to report the news.

There is no date for introducing the product elsewhere. Company executives at a news conference in Buenos Aires likened the launch with the 2005 debut of Coca-Cola Zero, which was first introduced in Australia and later sold elsewhere.

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ConsumerEdge Research analyst Bill Pecoriello said a global rollout seemed likely as it would also preempt PepsiCo's sweetener innovation. "A healthy dose of skepticism as to the long-term success potential is warranted, given past introductions," he added.

There has been a recent wave of mid-calorie sodas like Pepsi Next and Dr Pepper 10, but they have not maintained market share, Pecoriello said.

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Stevia comes from a plant native to Paraguay.

Coca-Cola shares were up 1.5 percent at $40.30 in afternoon trading on the New York Stock Exchange. PepsiCo stock was up 1.4 percent at $81.20, while Dr Pepper Snapple Group Inc <DPS.N> rose 1.8 percent to $45.77.