Big Red Buys Xyience, Ends UFC Partnership

Xenergy Lineup

It seems the beverage industry continues to go through some form of consolidation.  Big Red Inc. – one of North America’s Top 10 beverage organizations – has acquired Xyience effective immediately.  Xyience – one of the more well-known energy drink brands through their sports sponsorships – now joins a drink portfolio that includes Big Red Soda, Hydrive Energy Water, Nesbitt’s, and Thomas Kemper Soda.  While many things may change for Xyience in the future, one thing has already changed as a result of this acquisition: Xyience has ended its UFC sponsorship.  Will ending this sponsorship hurt Xyience’s growth among their core demographic?  How else will their communicate to this group of consumers?  Will the gains from being part of Big Red’s system outweigh Xyience existing as a standalone energy drink company?  What benefits Xyience in this arrangement?

One major factor: Big Red’s national footprint.  Xyience had been working well to gain distribution, winning more doors and regions over the past few years.  However, most of these distribution gains have occurred along the coasts.  There are many areas within the U.S. that Xyience products cannot be found.  Joining Big Red gives Xyience national distribution by piggybacking off of Dr Pepper Snapple Group (DPSG), which is a national distributor and delivers to three-quarters of all Big Red retail accounts.  This change alone provides significant gains for Xyience, allowing the energy drink to challenge Red Bull, Monster, and Rockstar across more geographies.  The best part is that this is organic growth, where Xyience can rely on their brand name to help them do some of the work.

Beyond distribution gains, another growth opportunity for Xyience would be to broaden its target audience.  While the energy drink manufacturer owns a niche following among a select group of consumers, appealing to more consumer groups will help this brand evolve from its current state to a much larger energy drink player.  Hence ending their UFC sponsorship.  Gary Smith – Big Red’s CEO – said as much:

“I’m just gonna soften it (their image) up a little bit, make it a little less hardcore than the image that it’s got today.”

Ending the sponsorship won’t immediately alienate their niche consumers, but provides the opportunity to reach other consumer groups.

If managed properly, Xyience may be primed for explosive growth following its Big Red acquisition.  The brand is very recognizable and will be available in more places where consumers will recognize them.  And in the distant future after new consumer marketing content is built, they will certainly be challenging Red Bull, Monster, and Rockstar for share of mind in addition to share of shelf.

Coca-Cola Builds a Monster

Image couresty of brandchannel.com

Image courtesy of brandchannel.com

Looks like Coca-Cola realizes what it’s good at and what it isn’t good at.  Their increased stake in Monster Beverage proves as much.  With $2.1 billion invested, Coca-Cola now owns 17% equity in the energy drink behemoth, and in turns switches up their product portfolios.  Coke will give Monster their own acquired or homegrown energy drink brands, which includes Nos, Full Throttle, and Burn among many others, while Monster trades them their non-energy drink products, such as Hansen’s Natural Sodas & Juice Products, Peace Tea and Hubert’s Lemonade.  This deal brings together the world’s largest soda manufacturer and the U.S.’s largest energy drink manufacturer.  Although both sides got a great win out of this, but who needed this deal more – Coca-Cola or Monster?  Let’s start by seeing what each side actually gets out of this arrangement.

For Coca-Cola, acquiring a larger stake in Monster and then trading energy drinks for teas & juices serves as a win in itself.  With consumer habits and preferences changing, fortifying their product portfolio to keep pace with these changes was a necessity.  And with key brands generating bad press lately (think Diet Coke slogan fiasco), Coca-Cola could not afford to keep beverage products that carry high negative publicity potential.   Nos, Full Throttle, and the like most certainly qualify given the category requires caffeine content regulation following linkages to caffeine poisoning.

Energy drinks didn’t necessarily fit into the brand image that Coca-Cola wanted to sustain.  Energy drinks focus around an extreme sports lifestyle, with key sponsorships across mountain biking and motor biking.  Distancing the brand from energy drinks better promotes Coke’s image as a family-oriented product manufacturer.  Furthermore, their marketing acumen is better leveraged across Monster’s non-energy products given Coca-Cola’s existing strength across juices and teas.  Coca-Cola has already made a strong name for itself behind Minute Maid, Simply, Odwalla, Nestea, and Honest Tea.  Giving up energy to return focus to juices and teas helps Coca-Cola stay sharp and work on what they’re good at.

Hubert's Lemonade, now part of the Coca-Cola family.  Will this lemonade brand grow exponentially?  Image courtesy of hansens.com

Hubert’s Lemonade, now part of the Coca-Cola family. Will this lemonade brand grow exponentially? Image courtesy of hansens.com

For Monster Beverages, this deal unlocks a stronger global distribution network to grow their product base.  They’ve also added some larger name-brand energy drinks to complement Monster.  A strong competitor like Nos now becomes a fantastic ally.  Full Throttle owns a cult following despite Coca-Cola’s neglect and has a very good chance of being resurrected.  This arrangement gives Monster a wide assortment of products to target energy drink consumers, both locally and internationally.

Monster has also done a better job at marketing energy drinks than Coke because they’ve invested in resources to build out an entire lifestyle.  Energy drinks are more integrated into a consumer’s lifestyle than some other beverages, given their wide target in terms of drinking occasions.  The soda drink manufacturer was not prepared to build out a 24/7 lifestyle like how Monster, Rockstar, and Red Bull have.  Though Monster’s success isn’t a defined blueprint, they already have the infrastructure in place for one energy drink and this could be scaled up for other energy drinks.

It’s really hard to say who needed this more though Coca-Cola benefits more in this new arrangement.  The soda maker had more to lose because they were never going to catch Red Bull, Monster, or even Rockstar with their homegrown products.  Giving up distribution bought them expertise and healthy beverage brands.  Similarly, Monster’s true success existed in the energy drink segment, so much that they even changed their company name to halo off some brand equity.  Their strength in energy drinks would have prevented them from properly developing their nonenergy product portfolio.

Regardless of who benefited more, this only proves that larger companies must take creative approaches to keep growing.  In the past, it was about building strong brands.  Now, it’s about buying a brand that’s already been built, and making it stronger.

Holidays then vacation

Happy Canadian Civic Holiday!  No post this week, nor for the next few weeks.  I’ll be traveling with the family out of town, so no time to write anything in-depth at this point.  I’ll update everyone through Twitter.

Canadians Share A Coke

Share a Coke Jason

A marketing campaign’s success in one part of the world certainly merits consideration to be repeated in other parts.  As such, the initial Australian Share a Coke campaign has been repeated in many other countries, recently coming to Canada earlier this month.  The Canadian campaign customizes 591ml/16oz bottles of Coca-Cola, Diet-Coke, and Coke Zero with people’s names on them.  One side will feature the customized name while the other side still says Coca-Cola.  Coca-Cola will be putting nearly 300 popular Canadian’s names on their bottle labels and then shipping them out to retailers.  Sadly, my name (Jason) does not qualify for one of the 300 most popular Canadian names (find out whether yours is here) so I’ll have to go to a kiosk machine to actually get my name printed on a bottle.  These kiosks will be available all through summer, in Calgary, Edmonton, Montreal, Vancouver, and Toronto.

Funny enough – or smartly – Coca-Cola has provided some parameters around naming, at least for the online portion.  Words that do not exist in their word bank are met with a question mark and an invitation to add the name to their word bank (must be reviewed first).  This prevents people from abusing the labeling system or from using it for malicious intent.  Seems like they’ve learned their lesson from the vitaminwater fiasco from earlier in the year.

Coca-Cola does have safeguard parameters to prevent abuse.  Even the word "Hello" cannot be printed on the label for sharing since it's not in the word bank.  Courtesy of shareacoke.ca.

Coca-Cola does have safeguard parameters to prevent abuse. Even the word “Hello” cannot be printed on the label for sharing since it’s not in the word bank. Courtesy of shareacoke.ca.

All in all, not a bad campaign to extend beyond Australia.  When the customized name campaign first rolled, media outlets and consumers alike picked up on this.  It was categorized as a strong success given the increase in awareness and social media engagement.  The Canadian campaign is decidedly different from the original campaign.  For one, social media engagement plays a different role in Canada than Australia.  The Australian components allowed consumers to create a custom commercial through their Facebook album as well as enter to win $50,000.   More interestingly, the campaign also included customized “name songs” that could be downloaded, which showed a personalized touch between Coke, music, and the individual.  The Canadian iteration of this campaign focuses more on social engagement to share the customized label, but removes the contest and name songs.

Another key difference between the original and Canadian campaign is the product assortment.  Our Canadian campaign includes naming labels for Diet Coke and Coke Zero as well.  This is a sound move whereby Coca-Cola understands the geographical differences and taste preferences of Canadians.  Many consumers prefer Coca-Cola, but there are a growing number of Canadians that are looking for lower calorie soda alternatives.

Considering the campaign’s objective to be identical to the Australian objective of raising awareness and driving sales, this one likely is another success story for Coca-Cola’s marketing campaigns.  Personalized labels and engagement across social platforms help to increase Share a Coke’s publicity.  And consumers seeking out these custom bottles will certainly help fuel sales, where they get the added benefit of finding their own, customized bottle of refreshment.  This certainly fits into their overarching “Over Happiness” campaign.  Here’s the first clip to highlight The Sharing Begins.

Nestea and Lipton Go After AriZona

Nestea's new 695ml cans to compete head-to-head with AriZona.  Courtesy of facebook.com

Nestea’s new 695ml cans to compete head-to-head with AriZona. Courtesy of facebook.com

Each summer I pay a little more attention to monitor the Ready-to-Drink (RTD) tea segment.  Some of my beverage industry contacts say that AriZona’s dominance in the RTD tea segment have inspired other beverage companies to launch similar $0.99 tall cans to steal some of AriZona’s sales.  Most recently, I’ve noticed both Nestea and Lipton stock some competitive offerings.  Both have come out with tall cans of tea, with similar $0.99 price points labeled on the cans themselves.  Given that AriZona has made $0.99 teas their claim to fame and have been selling them for many years already, how successful will Nestea and Lipton be at stealing some sales?  More importantly, is selling tea at $0.99 profitable for Nestea and Lipton, or is there another reason for them to enter this segment?

Unlike AriZona, Nestea and Lipton have strong backers.  Nestea’s partnership with Coca-Cola provides them a robust distribution network.  Lipton also has a strong market coverage through their agreement with PepsiCo.  Both competitive brands would be able to leverage the sales and merchandising support of Coca-Cola and Pepsi to ensure retailer shelves are always stocked.  Beyond retail coverage, both Nestea and Lipton would get premium in-store placement locations.  Coca-Cola and Pepsi both own front-end cooler space as well as multiple locations within a grocery store, giving them the opportunity to stock products to their liking within these areas.  So unlike previous challengers, AriZona will face their strongest competition yet in Nestea and Lipton.  These two competitors have the necessary support and expertise to erode AriZona’s leadership in this segment.

Nestea's new 695ml cans to compete head-to-head with AriZona.

Nestea’s new 695ml cans to compete head-to-head with AriZona.

Given these dynamics, it certainly appears that Nestea and Lipton stand as formidable opponents to AriZona and steal their sales.  However, both Nestea and Lipton are known best for their offerings in a different tea format: bottled tea.  By rolling out these $0.99 aluminum cans, don’t they risk cannibalizing their own sales from a more profitable tea format?  Wouldn’t this make the decision to launch 695ml tea cans with $0.99 printed on it hurt their total tea business?  Given the risk associated with devaluing sales potential, why come out with tall cans at all?  In the end, they are just as likely to steal sales from AriZona as they are on stealing their own sales.

Simply put, it may be better to get less dollars from the consumer, than get none at all.  If their market research indicates that the same consumers buy both bottled tea and canned tea, both Nestea and Lipton have much to lose by not having a canned tea offering themselves.  And given the price range of canned and bottled tea, it would appear that canned teas serve as the “value” segment to get people to buy a tea product.  Bottled tea appears to serve more as a “mid-value” or “premium” segment.  Should Nestea & Lipton leave AriZona to own the value tea, it will be much harder to steal that tea customer away at a later point when they are interested in moving up the value chain to premium tea.

As long as you can get them to buy (or try) your drink once, you’ll stand a chance to get them to come by as a repeat customer.  Even if the immediate value is $0.99, there could be opportunities to get these thirsty consumers to buy the more expensive bottled tea at a later time.

vitaminwater Refreshes Canadian Product Portfolio

The @vitaminwater_caa twitter headshot, current as of July 2014. Courtesy of twitter.com

vitaminwater Canada product line-up from their twitter page head shot as of July 2014.  Courtesy of @vitaminwater_ca (twitter.com)

It seems vitaminwater has recognized the limit on how many drink flavors can be sustained in the Canadian marketplace.  That number stands at twelve.  The hydration brand has quietly launched two new flavors under their Zero sub-brand, introducing Rise (orange) and Squeezed (lemonade) to build their calorie-free portfolio.  Very subtly, two of the previous zero-calorie flavors – Resilient-C (grape raspberry) and Recoup (peach mandarin) – are being phased out to make space for the two new offerings.  Beyond the zero-calorie product transition, Spark (grape blueberry) also is being phased out.  Notice the different flavors in the image above and below (Recoup has never been pictured).  It’s certainly interesting to see that the marketplace – and retailers – can sustain twelve flavor extensions.  Definitely not an easy feat to create shelf or cooler space for twelve items.

What is more interesting though, is vitaminwater’s approach to continuously refresh their product line-up.  While there has always been steady sales coming from popular flavors such as XXX, Essential, and Multi-V, there are “test” flavors launched into Canada.  From the hydration brand’s introduction, Rescue (green tea) was the first to be discontinued.  Through the years, other flavors have made brief appearances and slowly gone away, including Formula 50 (grape) and Sync (Berry Cherry).  And beyond these flavors that were expected to mainstays were limited-time offerings, such as the recent Glory (peach mango) flavor for the 2014 Olympics.  Regardless of all these other changes, the magic number – or limit – appears to be twelve flavors.

Despite a mixed response leading to varied success and failure, their constant innovation is admirable.  The company keeps on bringing flavors into the market to see what sticks with consumers.  It would be safe to say that vitaminwater has introduced up to twenty flavors at one point or another to the Canadian market.  Beyond the original eight flavors that accompanied the Rescue offering at launch, the most successful introduction has been Energy (tropical citrus).  Most of the grape flavors – Spark, Formula 50, Resilient-C – have only made brief and unsuccessful appearances.

vitwaminwater Canadian product line-up as of July 2012.  Courtesy of @vitaminwater_bc (twitter.com)

vitwaminwater Canada product line-up as of July 2012. Courtesy of @vitaminwater_bc (twitter.com)

Regardless of success or failure, it is a welcome sign to see a company continuously improve their product line-up.  Before an item can be launched, a company invests significantly behind research and development to determine its viability, demand, and sales potential.  And to consistently bring new products to the market, this is a sign that vitaminwater believes in the product’s longevity.  Even with product proliferation being a key concern that prevents retailers from stocking all the flavors, substituting new products in place of slower selling products helps both parties.

After all the product substitution, let’s just hope that vitaminwater eventually finds a grape flavor product combination that will stick in the Canadian marketplace.

Red Bull Celebrates Summer With New Flavor

The new Red Bull Summer Edition is available exclusively at 7-Eleven locations across Canada and the U.S.

The new Red Bull Summer Edition is available exclusively at 7-Eleven locations across Canada and the U.S.

Building on their momentum of the Red Bull Editions, the energy drink manufacturer will launch a new flavor exclusive to 7-Eleven locations in Canada and the U.S.  Aptly named the “Summer Edition”, the drink’s packaging is a sunny-yellow colored 12oz (355ml) can.  The tropical fruit-flavored drink adds to the Red Bull Editions line-up of the Red (cranberry), Blue (blueberry), and Silver (lime) flavor offerings.  7-Eleven has exclusivity of the Summer Edition in July and August, with a consumer promotion running until September 2nd (per the corporate 7-Eleven news release).  After that, no guarantees whether this becomes available across other retailers or it is truly an exclusive, limited-time offering.  If history proves to be repeated, then the Summer Edition will be here to stay.  Red Bull had previously launched their Red Bull Editions exclusive to 7-Eleven in March, followed by availability at other retailers a few months later.

It’s not the first time beverage companies have partnered with 7-Eleven for exclusive offerings.  Most recently, Gatorade had launched their Gatorade Fierce Green Apple flavor exclusively with the convenience retailer.  The results of that launch is detailed in this Pepsico news release.  The proven success of exclusive launches help 7-Eleven secure more preferred agreements with other beverage manufacturers.  After all, the convenience retail channel generates healthy sales and even healthier profit margins.  And with 7-Eleven adding more retail locations across North America, they certainly have the clout to command more customized products.  For Red Bull, this arrangement is preferable since it helps the energy drink manufacturer lock up more valuable shelf space in the nation’s leading convenience retail chain.  In addition, this also allows them to focus their advertising support behind one product at one retailer, helping to drive a stronger, more focused message.

Red Bull has previously launched the Red Bull Editions exclusive to 7-Eleven before opening it up to all retailers.  Courtesy of flippies.com

Red Bull has previously launched the Red Bull Editions exclusive to 7-Eleven before opening it up to all retailers. Courtesy of flippies.com

In BevNet.com’s article on the Red Bull launch, the publication detailed that Red Bull is slower to launch new products relative Monster Energy, leading to slower sales growth (link here).  The comment is not without merit, as it appears that Red Bull’s sales are more reliant on existing drinks rather than new innovations – especially with a innovation history that includes unsuccessful attempts to diversify with  Red Bull Cola and Red Bull Energy Shots.  However, their recent product launches came from an area where they are the clear leaders and have been quite successful.  And with fewer launches, Red Bull is able to put more attention into each launch, and ensure that it receives full support across media outlets as well as.  Case in point: their launch efforts behind Red Bull Total Zero and the Red Bull Editions have been well executed with media and in-store support.  Even their BULL Energy Drink has garnered strong attention despite catering the beverage to a highly specific market.

The lower frequency also helps Red Bull convey a stronger brand presence that coincides with their premium pricing.  Fewer launches highlight a prestige that will be harder to sustain if launches become fast and frequent.  So with the Summer Edition now available in 7-Eleven, let’s see how Red Bull celebrates with their Summer Edition.  It won’t be forever until they have another product launch, but it will surely be after they make sure the Summer Edition is successfully entrenched with  the customers and consumers.

At-Home Carbonation Reaching Critical Mass

It wasn’t that long ago that all we knew about at-home carbonation soda was Sodastream following their banned SuperBowl ad in 2013.  In the years since, Coca-Cola has joined up with Keurig and Pepsi has partnered with Bevyz to develop home brewing units and syrups.  We can now add another known competitor to the mix.  Sparking Drink Systems (SDS) International has a product called Viberation that produced carbonated soda all within one beverage pod.  It’s entirely possible that other companies are developing at-home carbonation units with its growing appeal.  Consuming carbonated beverages in an environmental-friendly way helps remove some guilt by reducing the plastic waste.  Sugar intake is another problem, but that’s a focus for another day.  As more competitors enter this expansive home-brewed beverage space, what will define their success?

The SDS Viberator, carbonating beverages within a single beverage pod.

The SDS Viberator, carbonating beverages within a single beverage pod.  Modified image via sparklingds.com.

One of the stronger products in the marketplace would be the SDS Viberation.  This Viberation has the capability to produce sparkling and enhanced waters, carbonate sodas, and even carbonate alcoholic beer without a CO2 cylinder.  The elimination of a CO2 cylinder increases the usability of the device, and possibly increase its adoption rate.  At this time, the Viberation is distributed across a variety of regional US-based distributors.  In order for this device to succeed, it must gain more exposure through securing distribution, marketing, and innovation.  Gaining distribution brings the Viberation to consumers that shop in bricks and mortar stores, or online.  Marketing efforts educate the consumer on the product benefits and its unique selling proposition (great-tasting carbonated beverages without a separate CO2 device).  Innovation makes meeting the consumer needs paramount with more flavors and assortment.  All three could end up being done through collaboration.  With a branded player (ie Starbucks? Dr Pepper Snapple Group) helps increase its reach, awareness, and appeal.

SodaStream’s main challenge appears to be part of its business model: carbonation cylinders.  With the competition’s ability to carbonate a beverage without any CO2 tanks, the Israeli-based company is facing an uphill battle to innovate.  Despite their recent marketing efforts at the SuperBowl to gain worldwide exposure, their growing stable of branded syrups, and their international distribution, the product still requires customers to invest in purchasing a CO2 device.  As the market shifts toward “all-in-one” devices, SodaStream’s may need to develop an at-home carbonation unit that can brew soda without a CO2 cylinder.  One of the core challenges SodaStream now faces is understanding whether their business model is still viable given the competitive landscape.  The C2 cylinders is a lucrative revenue stream, but it is also the barrier toward their adoption with more home-brewing appliances available.

The CO2 cylinder presents a great revenue source for SodaStream, but is also prevent fast product adoption. Sourced from coolest-gadgets.com.

Coca-Cola’s partnership with Keurig brought greater attention to this product segment.  Distribution and innovation likely are not challenges for the world’s largest beverage manufacturer.  In fact, these areas exist as its core strengths.  Keurig Cold will have the ability to not only brew Coca-Cola carbonated drinks, but also produce teas, sports drinks, juices, and a host of other Coca-Cola-manufactured beverages.  Marketing may actually be where Coca-Cola’s Keurig Cold device sees the biggest challenge.  The majority of their marketing dollars still reside with bottled beverages, and intensely promoting Keurig Cold will cannibalize their sales.  Another marketing challenge would be Coca-Cola’s ability to create the demand for beverage format when their bottled format is so successful and widely available.  Similar to Kraft MiO entering the liquid enhancers space first and Coca-Cola following, SodaStream pioneered the at-home carbonation space.  The challenge for Coca-Cola within liquid enhancers is not their product assortment, but their marketing efforts to create the demand for the liquid enhancer form of their beverages.  Coca-Cola beverage pods may endure the same fate as their liquid enhancers: broad assortment and distribution but limited marketing funds preventing the product line from reaching its full potential.

Pepsi’s Bevyz partnership will release an at-home carbonation unit to the market sooner than Coca-Cola.  The Pepsi Bevyz Fresh Machine was launched in the U.S. this past May.  Despite first-mover advantage, one of their core challenges appears to be marketing.  The market has not heard of Bevyz, and the majority still do not know Pepsi has developed an at-home carbonation unit.  While the product’s distribution and innovation are strengths, the marketing aspect seems to be the most significant barrier to overcome.  Despite the product’s versatility to carbonate beverages, produce teas, juices, and waters, and even serve as a water cooler, consumers are simply unaware of this machine.  Check out their 2011 Bevyz in Action video below.  Pepsi has been slow to react when Coca-Cola moved first in other spaces, such as in liquid enhancers and intelligent fountain units.  If Pepsi continues to think methodically before acting, they may stand to lose more ground to Coca-Cola and other competitors.

Each competitor faces their own challenge within this home-brewing beverage space.  Roadblocks toward growth include marketing, distribution, and innovation – it just depends on your business stage.  What is certain is more organizations are dedicating resources to small home appliances to help consumers make their own beverages.  This in turn helps the segment approach critical mass toward being available in every consumer’s kitchen counter space.

Diet Coke Reverts to “Just for the taste of it!”

Image courtesy of ispot.tv.

Diet Coke has changed their slogan – again.  After rolling out “You’re On. Diet Coke.” recently and receiving a lot of criticism, they have changed it back to “Just for the taste of it!”  It appears that the weight of the media backlash was too heavy to bear.  Diet Coke’s marketing executives acted once the slogan attracted continued negative publicity, necessitating a change and dissociation from this negativity.  Here’s the new commercial below, where there is no visible reference to a Diet Coke slogan – only a verbal reference.

Going back to the “Just for the taste of it!” slogan is an interesting choice, seeing that they have returned to this slogan three other times.  This slogan launched alongside Diet Coke’s introduction in 1982, and was subsequently resurrected in 1986, 1995, 2006, and now 2014.  Seems like other Diet Coke slogans just don’t have staying power like the original.  The “Just for the taste of it!” turns the attention back to taste and calories.  No focus on drugs – cocaine or aspartame.

In a time when all brands try desperately to manage their image – especially across social media – returning to the basics is necessary.  Even as Diet Coke has worked hard to establish a strong image as a lifestyle beverage with slogans like “Stay Extraordinary” or “You’re On”, solidifying its foundation remains critical.  Beyond all the dreams and aspirations, it must continue to deliver on the “brand promise” of a great-tasting sugar-free soda.  With this latest debacle, here’s hoping that Diet Coke has indeed learned its lesson.  As soda became linked with obesity and aspartame became linked with adverse health effects, some of Diet Coke’s campaigns veered off course to defend against these claims.  Other Diet Coke campaigns focused on establishing a strong image outside of its product attributes.  Both these types of campaigns made the brand less tangible and may have led people to forget what Diet Coke truly stood for.  And it certainly opened the door for criticism by marketing bloggers like myself.  A re-dedication to its core is essential in reviving Diet Coke.

While no publicity is bad publicity, the staying power of this bad publicity mattered more.  A couple years of advertising the new-old slogan of “Just for the taste of it!” should help re-establish Diet Coke’s image of a great-tasting sugar-free drink.  Who knows, it could be the right time to expand as a lifestyle beverage  at that time.  Diet Coke just needs to find the right balance of their image of being a great-tasting drink and being a lifestyle drink.

Starbucks Brings Teavana Into Coffee Shops

Starbucks baristas now brew Teavana ice teas for Starbucks locations. This is the start of a

Starbucks baristas now brew Teavana ice teas for Starbucks locations. This is the start of a “shake up”. Image courtesy of http://www.ispot.tv.

Not sure if anyone has noticed the latest Starbucks commercial.  The coffee giant is now featuring their Teavana shaken iced tea as a summer drink.  Why is this important?  This TV commercial shows Starbucks baristas making the beverage, and showing the ice teas as available within Starbucks locations.  This is different from their initial strategy for Teavana.  The Seattle-based coffee company stated that Teavana operations would be completely separate from Starbucks, and increase the Teavana standalone locations.  While they continue to open Starbucks and Teavana locations, is bringing Teavana-branded offerings under the Starbucks locations the right thing to do?

Starting with the recent Oprah collaboration, Teavana products have increased exposure within Starbucks locations.  Beyond the handcrafted Oprah products, Starbucks customers would start seeing Teavana tea packages and mugs available for sale.  It certainly looks like the bringing Teavana-branded beverages into Starbucks locations will help increase Teavana’s exposure.  This cross-branding effort strengthens the Teavana brand and opens up more possibilities for Starbucks.  While Starbucks had always served iced teas within the retail establishments, they were never branded.  This changes as they now brand them under Teavana.  The coffee giant has the platform to brand a variety of beverages within their retail locations.  Starbucks has built up Teavana and Tazo for tea, Evolution Fresh for juices, Ethos for bottled water, and Clover for premium coffee.

With more Teavana locations opening up, this provides Starbucks with greater opportunities.  Though the strong smell of coffee may prevent it from being brewed inside a tea establishment (likely the same reason that Starbucks locations only serves Teavana iced teas), water and juices could be strong candidates for increased distribution.  Ethos and Evolution Fresh may only require a cooler for refrigeration and do not emit strong aromas like coffee or tea.

Starbucks’ acquisition of Teavana came with retail locations that created potential scale for the beverage organization.  Now we can clearly see how cross-promotional opportunities exist between Teavana and Starbucks.  As Starbucks has also supported Evolution Fresh in standalone locations, it is highly likely that the organization’s continued expansion will involve Starbucks or Teavana products within Evolution Fresh juice stations as well.

Here’s the Starbucks Teavana ice tea commercial called “Shake Up”.  Though the commercial itself is simple and showing baristas creating Teavana iced teas, the name could be symbolic.  Starbucks continue to position itself to “shake up” the beverage landscape.

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