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Pepsi relaunches Diet Pepsi with aspartame following sharp decline in sales

Pepsi to reintroduce aspartame in some beverages.
Source: Pepsi
Pepsi to reintroduce aspartame in some beverages.

So maybe it wasn't the aspartame after all.

Pepsi ditched the controversial sweetener last August in a move to placate health-conscious consumers looking to cut unnatural chemicals from their diets. Aspartame had been linked to cancer in lab mice, and industry executives blamed the decline in sales on unfounded concerns people had about the artificial sweetener.

In announcing the earlier decision to drop aspartame in April 2015, Pepsi vice president Seth Kaufman said: "Diet cola drinkers in the U.S. told us they wanted aspartame-free Diet Pepsi and we're delivering."

Now, Pepsi is reversing course and bringing back the sweetener. Pepsi saw diet soda sales plummet almost 11 percent in the first quarter and received consumer feedback that indicated its aspartame-free sodas weren't quite as tasty as the original recipe.

"[Pepsi] was betting on this trend we've seen where some consumers are trying to avoid aspartame," said Duane Stanford, an editor with Beverage Digest, who first reported the company's product relaunch. "So they were betting on that trend and what they discovered is that there are still a subset of consumers who don't really think one way or the other about the aspartame. They are more concerned about how Diet Pepsi tastes."

But only time will tell if this is the right strategy. Diet soda sales dropped more than 5 percent last year, with Diet Pepsi falling 5.8 percent and Diet Coke down 5.6 percent. Overall, Pepsi saw sales decline 6.8 percent for its whole range of diet sodas, while Coke's sales dropped 5.3 percent in this category.

"Diet soft drinks have been a difficult category for a few years now," Stanford said, explaining that a saturated market and consumer demands are to blame.

"There are just tons of choices out there now," he said. Consumers seeking soft drinks low in calories or with different sweeteners have a wide range to pick from at grocery stores and restaurants.

"Consumers want choice in diet colas, so we're refreshing our U.S. lineup to provide three options that meet differing needs and taste preferences," Gina Anderson, a Pepsi spokeswoman, told CNBC.

Pepsi will continue to sell the aspartame-free versions of its Diet Pepsi in its silver can, but will also begin selling Diet Pepsi Classic Sweetener Blend in a retro blue can. The classically sweetened cola will only be available in 12-packs, 2-liter bottles and 20-ounce bottles at retail stores.

In addition, Pepsi will rebrand its Pepsi Max soda. The diet cola will be renamed Pepsi Zero Sugar, but its recipe will not be altered. The cosmetic change will more clearly indicate that it is a zero-calorie product, according to the company. Pepsi Max is sweetened with aspartame and Ace-K.

"Consumers right now seem to be very comfortable with lots of choice, in fact they are demanding lots of choice," Sanford said. "Consumers are used to going to the beverage cooler and seeing a wide range of products. I think this would just be another iteration of that trend. The key would be how you message these products and how you make it clear what each of them is trying to deliver."