Why Coca-Cola Is Axing Tab Diet Drinks

After nearly 60 years, Coca-Cola (KO) is saying goodbye to its Tab diet soda by the end of the year.

Coca-Cola said it is retiring the underperforming soda by Dec. 31, along with ZICO coconut water. Both products will be discontinued in the U.S. as Coca-Cola looks to refresh its global portfolio to focus on its leading product categories that have more potential for growth.

Tab was Coca-Cola’s first diet soft drink, launched in 1962. The zero-calorie drink rose to fame in the 1980s and had a small cult-like following labeled Tabaholics over the years.

“We’re forever grateful to Tab for paving the way for the diets and lights category, and to the legion of Tab lovers who have embraced the brand for nearly six decades,” Kerri Kopp, group director, Diet Coke, Coca-Cola North America, said in a statement.

“If not for Tab, we wouldn’t have Diet Coke or Coke Zero Sugar. Tab did its job. In order to continue to innovate and give consumers the choices they want today, we have to make decisions like this one as part of our portfolio rationalization work,” Kopp added.

Other products that will be leaving the Coca-Cola line include Odwalla, Coca-Cola Life, and Diet Coke Feisty Cherry. It is also retiring some of its regional beverages, including Neck Ginger Ale and Delaware Punch and its Japan-marketed VegiTabeta and Brazil-based Kuat.

“We’re challenging ourselves to think differently about our brands to accelerate our transformation to a total beverage company,” Cath Coetzer, global head of innovation and marketing operations at Coca-Cola, 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. It’s about continuing to follow the consumer and being very intentional in deciding which of our brands are most deserving of our investments and resources, and also taking the tough but important steps to identify those products that are losing relevance and therefore should exit the portfolio,” she added.

Coca-Cola said it “carefully audited” its beverage line over the last few months to determine which brands to eliminate. Through the retirement of some products, Coca-Cola said it will free up resources to invest in its growing trademark brands and launch more promising products such as its Topo Chico Hard Seltzer, Coca-Cola Energy, and AHA flavored sparkling water, for example.

The move by the beverage company is part of a restructuring plan, which Chairman and CEO James Quincey announced in August. The next month he said about the plans, “We really need to converge on disruptive innovations that are actually going to move the needle, not just in the marketplace, but at a scale that's relevant to The Coca-Cola Company.”

Coca-Cola also attributed the acceleration of the retirement of the brands to the coronavirus pandemic. While the company’s plans to streamline its beverage line were in the works prior to the pandemic hitting, Coca-Cola said the ongoing COVID-19 supply challenges and shifting shopping behaviors caused it to speed up the process.

Shares of Coca-Cola were trading at $50.24 as of 11:19 a.m. EDT, up 25 cents or 0.50%.