Increase Customization to Satisfy Soda Shopper Needs

It’s no surprise that carbonated soft drinks have been on a sales decline for the past few years.  Subjects such as stronger health-focus, lower calorie sodas, and government-proposed taxes are just a few examples of contributing factors toward the category’s decline.  So what has beverage conglomerates done to respond to this challenge?  Increase their product assortment – especially in the low calorie segment – and expand their package ranges among existing flagship brands.  One such example of proliferating the package range is delivering even more customization at a grocery retailer.

Over the last few months, we have seen examples of this customization from both Coca-Cola and Pepsi.  Beverage Digest tweeted about Coca-Cola’s partnership with Kroger’s to deliver a retailer-specific merchandizing strategy, where individual 12oz (355ml) cans of soda were lined up in racks for shoppers to choose their desired composition for an 8- or 10-pack.

Want to be a soft drink bottler? Not quite. But Coke Kroger test allows creation of custom can multi-packs. twitter.com/BeverageDigest…

— Beverage-Digest (@BeverageDigest) March 19, 2013

Shortly after that, BevReview.com’s readers tip off a customized offering from Pepsi, offering a mix of both Pepsi and Mountain Dew in one 28- and 30-pack offering.

On the Shelf: Pepsi & Mountain Dew 28 Can “Combo Pack” bit.ly/15QDyOr

— BevReview.com (@BevReview) April 25, 2013

Both types of offering are examples of increased customization and are intended to satisfy more of the shopper’s needs.  Both are trying to ensure that the grocery retailer fulfills most (if not all) of their buyers’ soft drink requirements on that one shopping trip.  Coca-Cola’s offerings are also eliminating the fear of expired cans simultaneously.  After all, as a grocery shopper that previously had to buy a 12-pk of Tab but really only wanted 4 cans of Tab can now get these 4 cans, along with a couple cans of Fanta Orange and Fanta Grape.  Pepsi’s combo pack meets shoppers’ needs a little differently, but still offers customization since you can purchase both top-selling beverage brands in one case pack.

These custom offering are likely the end result of valuable shopper insights on consumption behavior.  What’s also interesting about Coca-Cola’s create-your-own-pack initiative is that it mimics their Coke Freestyle machine.  To remind some readers, the Coke Freestyle is the beverage manufacturer’s fountain unit that offers over 100 flavors of soda.  The important part to note for this machine is that in addition to allowing the thirsty consumer to create their own beverage mix, it also provides the Coca-Cola with information on what flavors are dispensed the most and possibly satisfy a previously unmet beverage need.  Creating your own multipack allows them to do the same thing, by monitoring shipment levels of individual cans and tracking the point-of-sale scanned data.

For Coca-Cola and Pepsi, this is an example of passing influence to the purchasers while maintaining their own product control.  By giving customers more choices and customization, they have effectively satisfied more of the shoppers’ needs and benefited themselves in the process with rich information.  Everyone wins in this scenario.

5 Questions with Nika Water’s Jordan Mellul

There are many companies that embrace driving social causes with their products, aiming to make the world a better place by donating a portion of their profits to for sustainability initiatives.  Nika Water is one such company that does this, and really tries to help as much and as quickly as possible with their social mandate.  Nika Water’s website details that the company donates 100% of their profits for clean water, education, and sanitation projects in developing nations.  BevWire was given an opportunity to interview Jordan Mellul, VP Operations for Nika Water – and through this interview you will see that their focus is really on improving sustainability and environmental causes.  Read about my insightful interview with Jordan below, ranging from Nika’s product positioning, to their marketing strategy, and their distribution strategy.

BevWire:  While Nika’s unique selling proposition is a social mandate to not only be carbon neutral, but also to donate profits to help solve environmental problems in developing countries, what makes Nika better than other products?

Jordan Mellul: To be honest, we try to keep it simple at Nika Water.  While our product is a reverse osmosis/UV light purified water, we really do want the focus to be on the brand and message that it carries.  Our aim is to reach the mass population and appeal to the widest demographic possible.  After all, Nika is set to donate our profits.  By specializing, and thus limiting, our consumers, we have less of a chance of creating larger funds to donate.  Compared to those that are benefiting from our efforts, we are humbled to even be able to discuss water choice in such detail.

Courtesy of Nika Water & Olive PR Solutions.

BW: Nika Water’s website mentions that part of your strategy is to leverage marketing partnerships and social media to raise awareness of these environmental causes.  As such, Nika Water has partnered with World Vision and Free the Children among other organizations.  What type of inventive marketing partnerships and social media activities has Nika Water implemented?

JM: Unlike most typical and traditional water companies, Nika has always set itself apart by how we promote and share our brand’s message.  We know that educating the consumer on what choosing Nika Water means is the primary goal.  By marketing in the way that young, energetic juice, tea, and energy drinks go about things, we are able to show that the water category has the opportunity to be relevant and cool as well.  By speaking face to face with people at street fairs, festivals, and other events, we can share our story directly.  We have partnered, not only with world-class NGOs to show how social entrepreneurialism is a new way to make global change, but also clothing, accessory, and lifestyle brands that help make a difference too.  Social media has been used at every level and intertwined into all of our efforts to create awareness.  By holding contests, promoting other like-minded groups, and keeping open, honest conversations active with supporters, Nika does what no other bottled water does to be in touch.

BW: In terms of product availability, the website mentions that Nika can be found in natural food stores, delis, cafes among other distribution channels.  Is there any particular retailers stores I can direct the readers to go if they would like to purchase Nika water?  Also, what is Nika’s plan for expansion into the traditional grocery/drug/mass retailers?

JM: Currently, we are focused on building our brand in the types of places that have an independent feel and are staples of their community.  With a cause-based product like ours, we seek quality accounts over simply quantity.  It’s the owners and customers in these locations that connect with Nika’s entire appeal.  It’s because of this, that it isn’t so easy to point people directly to where to find Nika, other than their “corner shops”.  We may have plans to do open opportunities with more traditional grocery/drug/mass retailers down the road, but not until we feel we can really compete on the level that it requires.

Nika Water VP of Operations – Jordan Mellul

BW: While Nika’s website has a “Shop Nika” section that allows for online purchasing, are there any plans for international expansion into Canadian retailers?  If so, when would this be?

JM: Nika’s sales goals are taken territory by territory.  Still in our infancy, it is important to stabilize each market that we venture into, before looking to expand.  Our goals include covering the major US cities before attempting to break into the Canadian scene.  However, with the support of one of our first and largest NGO partners, Free The Children, being based in Toronto and well-known across all the provinces, we’re confident that the support would be there almost immediately.  In regards to the merchandise that we peripherally sell however, Canadian followers of Nika are welcome to purchase that now and wear their support!

BW:  Last question, are there any plans for line extensions or product innovations?

JM:  While it has always been discussed internally, there are no plans being put into action at this moment.  We really want people to focus on what we do now, and build our business’ foundation, before becoming more creative and branching out.  Water is simply our vehicle at the moment.  It is the means to an end. If trends or experience dictated that another product would be more suitable to generate income for our NGO partners, we would definitely adapt accordingly.

 Thanks so much for your time Jordan, and thank you Olive PR Solutions for arranging this!

Gatorade Lightning Bolt: Part of Every Athlete’s Success

I’m hoping by now that almost all consumers have seen this ad by Gatorade titled “Lightning Bolt”.  The ad starts off by depicting tired athletes during a football game and the school’s science professors oncocting a beverage that will refresh and energize the players.  The rest of the commercial showcases athletes training, performing, and celebrating key moments with quick clips of Gatorade logos and cups.  The ending is what we are all accustomed to with the “With From Within” tagline.  Does this advertisement’s message come through clearly?  Does it inspire action from the viewers, leading to incremental sales for Gatorade?

The former about message communication is simple and clear.  Gatorade is training and celebrating with you, as you reach for the height of your sport.   The hydration beverage shows successful athletes during different cycles of their sports life to communicate the fact that winning doesn’t just happen over night.  This requires regimented training and preparation first.  Even as an athlete competes and finally reaches the pinnacle of their respective sports, Gatorade is a partner with them at these different touchpoints.  So the message remains pretty clear that if you want to win, you need Gatorade to help you train.  And when you reach the end goal, Gatorade is there to celebrate with you.

The Gatorade beverage in its original state, glass bottle with “Gatorade” written on tape. Image sourced from fastocreate.com

The latter question is a little more challenging to answer.  Whether sales are truly incremental (or wholly generated) as a result of the commercial are very difficult to track.  However, consider the timing of when this commercial was introduced: during NCAA March Madness when Powerade released their own ad (read my analysis on that commercial here).  The point of Gatorade’s advertisement may not actually have been to stimulate sales, rather it was to protect their sales.  Since Powerade always plays up its underdog status, and there were many people watching March Madness, Gatorade needed to react and maintain their presence.  So the key measure of whether the “Lightning Bolt” media spot actually reached measured success may actually been seeing that sales levels held constant to prior year or prior months, rather that a decline in sales due to Powerade’s activity.

Large corporations – or business units in this case – typically conduct a high level of tracking to monitor competitive activity.  That’s just good business sense in order to preserve your own level of success.  Gatorade’s message is clear and a continuation of what they have advertised in the past few years.  Gatorade will help you prepare and later celebrate the victory.  It certainly will be interesting to answer the question of whether sales activity shifted in any direction as a result of this ad, but only those within the two beverage units will truly know the answer to that.

Pepsi “Mirrors” Ad Shows Beyonce’s Creative Influence

Beyonce drinks a can of Pepsi in her new “Mirrors” commercial, courtesy of adweek.com

Has anyone seen Beyonce’s new Pepsi commercial? Or a better question, has anyone seen the full one minute version rather than the thirty second version on TV? The full version has more footage prior to the mirrors breaking, revealing more of Beyonce’s personalities from her previous hits.  AdWeek has a nice summary of the spot so I won’t dwell on that for this post.  What I want to focus on is the message and the creative process, and Beyonce’s influence over this commercial.  See the full spot below.

Pepsi’s message to “Live For Now” comes through pretty loud and clear.  The advertisement chronicles Beyonce’s history of how she gained attention through her Destiny’s Child days and later found success as an individual artist.  All this shows is that Beyonce wouldn’t have attained her current success if not for her previous successes.  This has helped her secure a $50 million dollar deal “brand ambassador” with Pepsi, which goes beyond the typical spokesperson support by having Pepsi cede some creative control to Beyonce.  This commercial shows how Beyonce has influenced the creative process.

With their “Live for Now” tagline, Pepsi’s message has been about living for the moment.  The ad above ends with that same tagline so it appears that not much has changed.  However, what may be less obvious is Beyonce’s parting words, “Embrace your Past but Live For Now”.  It’s not just about the living in the moment, but also remembering where you came from.  To me, that is the influence that Beyonce had on the commercial.  Though the “Live For Now” message stays intact, the positioning is very different.

Pepsi’ Live For Now campaign, this one with Nicki Minaj from May 2012.

See also: Super Bowl Series: Did Pepsi’s Crowd-Sourced Halftime Show Add Any Value?

Pepsi’s previous commercials had solely focused on the “Live for Now” aspect.  Their Nicki Minaj commercials further glorified this component through the “Moment for Life” song, reaffirming the viewer to live in the moment.  That may have been Pepsi’s prior messaging, and it may very well with Nicki Minaj representing the beverage brand.  If it has changed, then it’s a sign of the changing times.  Nicki Minaj’s commercial was produced in May 2012, while Beyonce signed on with Pepsi in December 2012.  With Beyonce however, the Live For Now is still about the current moment, but only after embracing your past.  Could this be Pepsi’s new direction on leveraging on their successful history?

While Pepsi modifies the communication depending on the audience and medium, this enhancement with Beyonce is certainly unique.  It also makes a positive statement.  Could we expect Pepsi passing more creative control to Beyonce in future commercials, or have Beyonce involved with more of their social engagement campaigns?  Despite their contract saying that Beyonce will own some of the creative content, it would be wise for Pepsi to allow the songstress to have more involvement.   A truly collaborative partnership is one in which both partners care for the success and own  responsibilities, and having Beyonce feel a strong sense of ownership could only lead to further success for the cola brand.  Only time will tell, but I believe this is definitely the start of a very good collaborative partnership.

Honest Tea for Kids “Splash” into Target Exclusively Until June

Courtesy of honesttea.com

Honest Tea has extended their beverage assortment by launching youth-specific drinks titled Honest Splash in mid-March.  These 70-calorie juice offerings are offered exclusively in Target U.S. until June, when it will be open to other retailers to order and stock.  BevNet has more information on the launch here, while the official press release from Honest Tea is available here.  Since both sources have focused on the benefits of the product itself, I won’t dwell anymore on what has already been discussed.  What is interesting is how Honest Tea has decided to push this product out to the marketplace.  They exclusively partnered with Target for this launch, while their other previously launched product – Honest Fizz – was released through an exclusive partnership with Whole Foods.  Available in Berry Good Lemonade, Goodness Grapeness and Super Fruit Punch, Honest Tea makes these offerings available exclusively to Target’s 1,250 locations.  Why is Honest Tea launching exclusively in one retailer over another retailer?  Does this help them, or is this a decision that Target wanted?

For today’s retailer landscape in Canada and the United States, it’s important to drive consumers to your banner because it implies that they will be spending their total grocery dollars in your store rather than at the competitors.  As such, exclusive offers or “first-to-market” offerings are typically used to give one retailer a leg up over the competition.  It’s important to note that this type of exclusivity doesn’t work with all types of products and services.  For Honest Tea to receive this kind of attention from a national retailer is impressive.  Target certainly views that the Honest Splash is strong enough to sway consumer purchases, similar to how a hot new video game may drive purchasers to buy it from one electronics stores over another.  I would characteristic this as a joint decision to launch this exclusively in Target.

What about why they chose Target, versus any other mass retailer or grocery store?  Why not Whole Foods? Or Walmart? Or Walgreen?  What is it about Target that makes it the best choice for Honest Splash to launch there?  All these other retailers are national and well-known, so what makes Target so special?  To answer this, let’s start by eliminating those retailers that I detailed above.

Although Whole Foods seems like a great choice to consider another exclusive arrangement, Honest Tea has already done one with the premium grocery retailer (the aforementioned Honest Fizz from January to mid-March).  Offering two successive exclusive items may damage your relationship with other retailers.  It may give the impression that you “prefer” Whole Foods more than other retailers and could potentially lead to shelf space reductions or delistings.

Walgreen could be a great choice given their core focus on healthy offerings, but they are in fact a pharmaceutical retailer and thus beverages do not comprise a large portion of their overall store focus.  The focus is more health and wellness shelf stable items.

Walmart is a price-conscious retailer and would not be the most suitable place to launch an exclusive, premium offering.  Even their U.S. slogan “Save Money. Live Better” hints at lower prices than other retailers and launching a new product that effectively competes on price from day one would be inappropriate.

While Target’s slogan of “Expect More. Pay Less.” is similar to Walmart’s, the emphasis is the “Expect More” portion and thus positions less on price.  As a mass merchandiser retailer that also offers grocery and pharmaceutical items, Target is more suitable than Whole Foods and Walgreens.  Consider also the Target shopper profile, which skew heavily to moms that want what’s best for their kids and thus making Honest Splash a perfect offering.  Their shoppers are also tend to define value through strong offerings at reasonable prices, which means that they will not have to compete solely on price.

This is a good choice for an exclusive offering between Honest Tea and Target.  Ultimately it looks like something that both companies wanted to make happen.  It’ll be interesting to see the results of whether the Honest Splash beverages actually drives shoppers to forsake their grocery retailers for Target.

Starbucks Fixes Segment Blurring Problem

The three flavors of Starbucks Refreshers: Raspberry Pomegranate, Strawberry Lemonade, and Orange Melon. From blogs.starbucks.com.

Last July, Starbucks had a big media push when they launched their handcrafted Refreshers in their coffee locations with two flavors – Very Berry Hibiscus and Cool Lime.  These two flavors were also made available through their VIA line of at-home self-serve packages.  Most recently, they have followed up the handcrafted beverage offering launch by introducing three packaged sparkling beverages launch.  Joining the handcrafted and VIA Refreshers are: Raspberry Pomegranate, Strawberry Lemonade, and Orange Melon.  From their U.S. website, here is the product page for the Refreshers.  The launch of these packaged offerings created a problem for Starbucks and retailers alike: segment blurring.  Segment Blurring occurs when products within one segment encroaches on products from another segment.  Since the Refreshers are made with green coffee bean extract, should they belong in the coffee section?  Or does it belong in the energy drink section?

According to Kevin Reid – Director of Beverages – in an interview with Canadian Grocer these new beverages belong in its own section.  It appears that Starbucks anticipated the problem as a result of this beverage innovation.  By extracting the caffeinated energy content from coffee beans to make energy drinks, they understood that retailers would have difficulty fitting it into one section.  As such, the interview suggests that retailers create a specific area to group all the Starbucks products together in order to make it easier for the shopper to locate any Starbucks products.

A Starbucks branded supermarket endcap with the dark wood trim and faux-tile backsplash. From online.wsj.com.

Why should a retailer agree to a dedicated Starbucks section?  It turns out this makes sense in more ways than one.  Starbucks products are “destination” drivers in their own right given the coffee giant’s standalone retail locations.  Customers consciously choose to go to Starbucks coffee locations to purchase their Starbucks coffee.  Lending support to re-create this destination experience in grocery retailers is that customers expect to find all Starbucks products when they visit a Starbucks outlet.  Over the years, Starbucks has complimented their handcrafted beverages by stocking packaged coffee beans, beverage holders, and CDs in their branded stores.  Finally, Starbucks’ willingness to invest in décor for the grocer’s coffee aisle demonstrates their dedication to replicate the signature experience everywhere.  Starbucks understands that developing the Starbucks cafe experience requires a collaborative effort and has indicated they are willing to give the retailer Starbucks-type shelving.

Would the retailer be open to more Starbucks innovations in the future?  The Canadian Grocer interview reveals that retailers have been pleased with Starbucks sales.  And as long as Starbucks maintains its demonstrated collaborative efforts, retailers would certainly welcome more Starbucks products to help build grocery trips and baskets.