Happy Easter!

Spending some time away with the family so no post this week.  You may still find me on twitter (@BevWire).


See you next week!

Rockstar Quietly Introduced Energy Waters

The three flavors of Rockstar Energy's new Energy Waters: Citrus, Orange Tangerine, Blueberry Pomegranate Acai.

The three flavors of Rockstar Energy’s new Energy Waters: Citrus, Orange Tangerine, Blueberry Pomegranate Acai.

Rockstar Energy showcased their Rockstar Energy Water over 18 months ago at the 2012 NACS Show, but never divulged the launch date.  The energy drink manufacturer’s enhanced water offerings were quietly introduced in September 2013, and has recently launched into Canada.  Via Rockstar Energy Canada’s Facebook page - the three flavors of Citrus, Orange Tangerine, and Blueberry Pomegranate Acai – launched February 24.

Beyond their energy drink’s portfolio breadth, Rockstar has been traditionally known for their innovative and attention-grabbing packaging.  Their energy drinks come in aluminum cans that have matte finishes (Rockstar Recovery series) and slim cans with straws (Rockstar Pink).  However, their foray into enhanced waters have stayed with safer packaging resembling other products that define the segment landscape.  Even as packaging can help demonstrate a product’s unique features, Rockstar has chosen to play it safe since they do not have a strong brand name.  Their packaging resembles that the glaceau’s vitaminwater packaging, the clear market leader.  Perhaps Rockstar is looking to enter this segment as a follower and build up credibility as a key competitor in this segment before experimenting with its packaging.

The launch of Rockstar Energy Water is also an indication of the energy drink manufacturer’s goals to diversify beyond energy drinks.  Similar to Starbucks’ aim to expand outside coffee and Monster Energy’s expansion into teas, Rockstar is leveraging their expertise in energy drinks to introduce other caffeinated beverage products.  These new products are targeted toward a different consumer, and will be placed in other beverage sections within convenience and grocery stores.  With more touch points in the grocery aisles, Rockstar now has more opportunities to connect with the shopper: both the energy drink shopper and the enhanced water shopper.

As Rockstar targets a new consumer demographic, their marketing message and vehicles should also change.  Energy drink companies have forged strong ties with extreme sports athletes since their products fit that particular demographic and lifestyle.  Their new beverages may need to start communicating on other media channels (ie TV, print, digital) and communicating differently to identify more closely with this demographic’s behaviors and needs.  While some analysts expect Rockstar Energy Waters to go after the same “energy” consumer, there are bound to be new interest.  At the same time, communicating similar messages within identical media platforms dilutes the overall product awareness.

Rockstar Energy Water Shelf

Even as Rockstar Energy Drink continues to increase its availability, two key challenges they must address are awareness and consideration. Their February launch showed that they have only communicated to the public through sporting events and social media.  How will they improve their awareness?  And with their competition firmly entrenched in shopper’s minds when they are looking to buy enhanced waters, what will Rockstar Energy Water do to have the shopper consider trying Rockstar Energy Water?

Seeing that expansion is a key growth opportunity, Rockstar’s broader portfolio is a good first start.  If they continue supporting these new drinks and work to build both awareness and consideration, Rockstar can become a strong player across both the energy drink and enhanced waters segments.

Spiderman Lives Young with evian

evian's partnership with The Amazing Spiderman in their latest installment for the Live Young campaign.  Courtesy of adweek.com.

evian’s partnership with The Amazing Spiderman in their latest installment for the Live Young campaign. Courtesy of adweek.com.

It seems that evian’s focus is to build its brand through partnerships, one way or another.  Earlier this year BevWire detailed that evian and Coke were separating, and the premium water company will instead be leveraging the distribution network of The Danone Group and Red Bull (article here).  Aside from distribution partnerships, evian has recently collaborated with The Amazing Spiderman movie series to release another installment of its Live Young videos.  It’s certainly valuable to leverage on the film’s equity, as long as it’s tied-in with the beverage brand’s objectives.  So does this collaborative commercial help evian deliver against those objectives?

AdWeek may not think so.  AdWeek’s article appears to be deadpanning the premium water brand’s link with Spiderman.  The online publication communicates that there is no explanation of how evian and Spiderman are linked, and the water brand itself is not visible except for the Live Young tagline.  The baby Spiderman’s face is also not visible like previous iterations where the baby’s face is shown (article link here).

BevWire sees this commercial differently, and thinks that evian’s key objectives have been achieved.  If the goals are identical with evian’s 2011 objectives outlined by Barak Orenstein, evian’s Senior Brand Manager at the time, then this advertisement should be a continued translation on the brand’s success.  From the Marketing Magazine, Orenstein describes the 2011 campaign objective’s is “to drive top-of-mind awareness and consumption of Evian” (article link here).

The video is consistent across key evian assets from prior videos, which helps to reinforce the top-of-mind awareness.  Throughout the commercial, the evian themes of dancing, music, and mirror reflections of the main characters are apparent.  Unlike previous videos where the baby’s face is shown to forge a stronger connection with the real-life character, a baby-faced Spiderman is not necessary given Spiderman’s already high public recognition.  The miniature Spiderman suit is already enough to deliver this connection and help with raising the water brand’s profile.  Leveraging on the film’s impending release and their other commercials to build the movie’s internet, evian certainly increases its top-of-mind awareness with these coinciding Spiderman Live Young commercials.

While awareness is a key brand-building level, the core objective that any business cares about are sales and consumption.  Depending on the partnership structure, evian may be executing consumer promotions to drive their premium water sales within the grocery shopping channels.  Beyond the consumption objective, evian may also have an opportunity to increase their total product availability.  This commercial will likely play in movie theaters to remind movie goers to purchase evian water at the concession stands.  If evian is not readily available within the theater concession stands, this partnership will give them leverage to gain space for at least the movie’s duration on the silver screen.

Certainly a great partnership between a consumer product and an entertainment franchise.  Should this collaborative venture prove successful, will evian be partnering with other movie releases?

Pepsi Brings Propel Back to Gatorade

Propel - from the makers of Gatorade

Propel – from the makers of Gatorade

After a couple years differentiating itself focusing on the lifestyle space, Pepsi is re-launching Propel water under the Gatorade hydration portfolio.  From AdAge, Natalie Zmuda shares that the enhanced water brand will update its product packaging, remove the “zero” from its product name, and position itself as a hydration beverage for regular exercisers (article link here).  Unlike Gatorade, which is targeting the serious athletes and is a sports drink, Propel helps fulfill an athlete’s need with water – not an isotonic.  Still, the question remains how effective can Propel compete within the crowded enhanced waters space?  And given all the changes to the Propel franchise, how will consumers perceive Propel after another restage?

With popular brands like glaceau vitaminwater, glaceau smartwater, and SoBe Lifewater in leading market positions, Propel still manages to control a 13% market share.  It has remained competitive as a result of the brand’s equity and the consumer’s affinity with the hydration beverage.  The franchise will look to strengthen its market position by catering toward “routine exercisers” and piggy-backing on the Gatorade name.  Their updated packaging will feature the line “from the makers of Gatorade” to drive awareness and availability.  This point is critical to Propel’s growth, as owning a part of the consumer’s mind becomes increasingly important with the enhanced waters market expanding to include with more brands in recent years.  Even Pepsi themselves has plans on introducing a premium water brand – Qua – within the year. (article link here).  The competition within this segment is fierce, and owning a particular segment – the casual athletic segment – helps Propel stake its claim in enhanced waters.  With Gatorade also catering to the athletic segment, it would not be surprising to see more promotional efforts where Propel and Gatorade products complement one another.

Propel Water. In 2009 (L) and in 2014 (R).

Propel Water. In 2009 (L) and in 2014 (R).

The issue surrounding product perception could have been a tougher obstacle to overcome.  Propel was originally introduced under the Gatorade before moving away from the athletic consumer in 2011.  As consumers and their drinking habits evolved, the Propel brand followed the moving target to become more of a lifestyle water brand.  Instead of continuing to target males/females 25 and above, their core target demographic moved up to Boomers and Generation X.  Measured media spend to celebrate the new positioning was over $10 million.  Three years following this direction, Propel is changing their focus and advertising message.  Again.  If not for leveraging the Gatorade brand name, Propel may have a tougher time connecting to younger consumer segments after structuring the communication toward a difference audience.  With the sports drink’s backing, Propel has a stronger platform to broadcast their marketing message toward athletes and exercisers.

Regardless of the marketing message and target demographic, the product fits into the changing needs of consumers.  Propel is well-received as evidenced by their market position.  With the support of Gatorade, Propel’s path on the road to success becomes much less challenging.

Propel The Workout Water

Propel The Workout Water

Pepsi Next May Find More Success in Canada

Pepsi Next Canada

After launching in other parts of the world for the past two years, Pepsi Next officially launched in Canada.  Unlike the American version that contains 60% less sugar compared to the regular Pepsi, the Canadian version contains 30% less sugar.  The difference is a function of the sweetener composition.  The American version is sweetened with artificial sweeteners such as high fructose corn syrup, acesulfame potassium, and sucralose.  The Canadian version is naturally sweetened with stevia extract. This difference affects how Pepsi Next is marketed on both sides of the border.  How will Canadian consumers respond to Pepsi Next and its marketing communications?  More curiously, how much of the marketing communication will be customized to the Canadian market?

Pepsi supported Pepsi Next’s introduction with a pre-launch promotion, partnering with the NHL and the Heritage Classic hockey game in Vancouver.  Here is part of the Canadian consumer reaction to the beverage as captured by Pepsi below.  The initial consensus indicates positive response to the beverage.

While mid-calorie soda is still an emerging product area for Canadians, it is certainly on point with what most people are looking for.  Canadian consumers are more health-conscious and more proactive at seeking out healthy food offerings.  Sugar intake and calories per serving are more top of mind for Canadians shopping within grocery stores.  A product that provides the same taste without any bitter aftertaste (like the American Pepsi Next) and contains less sugar helps to lessen the guilty burden.  Naturally sweetened with stevia also helps to increase adoption since artificial sweeteners are also perceived to be less healthy.  Consider Pepsi Next similar to the early successes of the vitaminwater Canadian launch.  The enhanced water brand pioneered a new segment with a health-based product positioning at a time when consumers were beginning to question what they eat and drink on a daily basis.  The beverage met their requirements given its appeal as a great tasting healthy product.  While Pepsi Next is still a soft drink and cannot be considered “healthy” in the traditional sense, it is healthier relative to the other soft drinks.

Following it’s launch, Pepsi Next has ran a TV commercial adapted from the American Pepsi Next “Baby” spot.  The Canadian version included some very noticeable differences.  The key components being the refreshed packaging, the slogan of “Taste It to Believe It”, and of course, the “30% less sugar”.  The call to action of “Taste It to Believe It” is clearly catering to the Canadian audience.  The American slogan is “Drink It to Believe It”.  The customized “Taste” instead of “Drink” speaks toward a different value system between the two countries.  “Drink” implies consuming the entire beverage.  “Taste” obviously imply giving the product a try.  Perhaps the Canadian population may be more cautious at first toward trying a new beverage, but adapting the slogan clearly shows customizing the message toward the Canadian audience.  In order for Pepsi Next to succeed in Canada, this is a great first step.

The truly telling piece will be how Pepsi Next is supported following the launch period.  We know from earlier articles that Dr Pepper TEN and Pepsi Next are not sustaining earlier launch-period sales following reduced media support (article here).  With less attention dedicated toward the product, consumer focus will shift toward other health option.  Pepsi Next can maintain its launch momentum and also continue its early success if it keeps advertising to maintain its awareness levels .  Let’s hope the Canadian marketing team learns from what happened in the U.S. and find more success than its neighbors south of the border.

Starbucks Refreshers Get “Refreshed”

Courtesy of starbucks.com.  The new flavors and updated packaging.

Courtesy of starbucks.com

The Starbucks Ready-t0-Drink Refreshers hasn’t been on the market for a very long time, but are already undergoing a packaging update and product rationalization.  In addition to updating their packaging graphics, Blueberry Acai is replacing the Orange Melon variety.  It’s curious to see changes so quickly to both the product line-up and packaging.  Does this imply that the Orange Melon flavor was unpopular with consumers on both sides of the border?  Was the previous packaging not resonating with Starbucks consumers?  Both old packaging and flavors are still available in grocery channels, which may add to the confusion that shoppers see at the shelf.

The packaging refresh changes the upper body of the aluminum cans.  With the update happening so soon after international launch, Starbucks must have monitored the progress of these new products closely.  The results may have indicated lackluster sales and an inability to connect with the consumer.  The logo and “Starbucks Refreshers” name now sit in front of a silver background, with the name appearing on black font. The subsequent communication of product benefits also changes, now highlighting its real fruit juice and vitamins.  It appears that the main changes are the font color and the benefit callouts.  As such, it leads me to believe their consumer research may have indicated product confusion around what the can contained.  Were the contents coffee, given it’s green coffee extra callout?  Did consumers clearly see the Starbucks logo in front of color clashes of purple, orange, and pink?

From a cosmetic perspective, the new packaging certainly looks more appealing and communicates the product benefits more clearly.  Product confusion is reduced with the “green coffee extract” wording removed, replaced with “real fruit juice” and the vitamin callout.  The green Starbucks logo in front of a silver background also showcases the brand identity better, and ultimately better for brand equity and visibility.

What about the Orange Melon flavor?  Were sales of this item so poor that it merited rationalization just one year after its launch?  Could the Blueberry Acai flavor not have been an incremental product to their Refreshers portfolio?  BevWire had tried both the Strawberry Lemonade and Raspberry Pomegranate, but not the Orange Melon.  Are other beverage consumers’ taste preferences similar to mine?  If this was the case, it certainly would indicate that the Orange Melon flavor was the least considered option among the Starbucks ready-to-drink energy drink line-up.  It would merit rationalization quicker in order to preserve retailer confidence in the burgeoning food and beverage company.

While changes within the Refreshers line-up is surprising, it certainly shows that the company is investing support behind these new products.  Making product and packaging changes requires financial investment – especially when done so quickly.  Hopefully this is an indication that Starbucks plans to commit on making these products a market success over the long term.  As the organization continues to expand outside of coffee, it is imperative that their track record of success stays intact.

Courtesy of usatoday.com. The old Starbucks Refreshers packaging and flavors.

Beverage Pods Need Their Own Section

Courtesy of retailwire.com

Courtesy of retailwire.com

The growth of small home appliances like coffee makers, mixers, and juicers has led to new business opportunities between Coca-Cola and Green Mountain Coffee Roasters (GMCR).  Through their 10-year agreement, GMCR and Coca-Cola will develop a Keurig Cold beverage machine that serves cold beverages and provide GMCR the exclusive licensing rights to single-cup beverage pods for Coca-Cola products.  While many analysts have detailed how this deal affects manufacturers like Coca-Cola, Starbucks, and SodaStream (my article on manufacturer impact here), the retail impact is similarly significant.  With grocer’s help, this partnership will increase Coca-Cola’s consumer reach across more grocery aisles and in the consumer’s home.  For retailers where soft drinks is a trip driver, supporting this innovation stands to benefit them just as much.

Given the changing beverage market, the consolidated retail landscape, and the consumer’s taste preferences, the challenges are much greater toward winning in the competitive environment. For retailers, getting the grocery shopper to choose one retailer over another retailer has never been greater, which pressures the retailer to be more creative when communicating out.  For manufacturers, the rise of beverage categories like liquid flavor drops, energy drinks, and coconut water gives the grocery shopper more options than ever before.  The choice to try alternative and healthier beverages are positively reinforced as soft drinks come under scrutiny for containing unwanted sugars and calories.  With Coca-Cola bringing new news to a retailer’s trip-driving category, in-store support and product placement helps ensure full potential is realized.  Winning the grocery trip is the first step, but winning at the shelf requires proper retail support.

Grocery retailers have already started building single-cup pod sales by offering these single-cup pods next to tea bags and ground coffee.  However, a dedicated section for pods itself will soon be warranted.  As the selection variety expands beyond tea and coffee, these single-serve cups can no longer be confined to the tea and coffee aisle.  Rather, they deserve their own section where a consumer can find pods for teas, coffees, and soda.  

While the Keurig Cold isn’t expected to reach the market until 2015, grocery retailers should continue monitoring the selection and sales of their beverage pods.  Beverage pods may become a trip driver in and of itself for some retailers.

Dr Pepper TEN a Casualty of “/1″ Campaign

Courtesy of brandmagazine.com

Courtesy of brandmagazine.com

As Dr Pepper invests more support to highlight their “1/1″ campaign for Dr Pepper and Diet Dr Pepper, are they providing less support to Dr Pepper TEN?  The beverage manufacturer continues to feature their core soda offerings and exclude the low-calorie Dr Pepper TEN soft drink.  As much as the company says that this segment is growing, neither Pepsi (makers of Pepsi Next) nor Dr Pepper Snapple Group (makers of Dr Pepper TEN, RC Cola TEN, 7UP TEN, Sunkist TEN, Canada Dry TEN, and A&W TEN) have provided the same media support levels since the 2012 launch period.  Given consumer trends of shifting consumption away from soft drinks, what will happen to these Dr Pepper low-calorie sodas if they are not supported by Dr Pepper?

As seen above, the commercial’s final scene shows both Dr Pepper and Diet Dr Pepper but not Dr Pepper TEN.  The marketing message for Dr Pepper TEN is clearly different from Dr Pepper and Diet Dr Pepper, but it is concerning that there has not been additional support behind Dr Pepper TEN.  With market activity, consumer trends, and expert opinions all suggesting a continued decline toward carbonated beverages, it is understandable to support Dr Pepper and Diet Dr Pepper since it delivers the biggest return.  Conversely, not supporting these two brands will also provide the most detrimental effects to the business.  This is why Dr Pepper and Diet Dr Pepper will continue to receive the majority of funding.

With the low-calorie products receiving less funding, sales decline should be expected.  But by how much?  While the initial repeat levels were above expectations and more than half of all sales were sourced from outside the carbonated soft drink business, these early wins were not sustained.  Dr Pepper Snapple Group’s SEC  10-K filing from February 2014 indicated as much:

Our Core 4 brands, which included the impact of the launch of our Core 4 TEN products, decreased 1% compared to the year ago period. This result was driven by a a 5% decrease in 7UP, a 7% decline in Sunkist soda and a 2% decrease in A&W, partially offset by a 6% increase in Canada Dry. Crush, Squirt and RC Cola declined 7% , 4% and 4% , respectively.

The entire 2013 annual report can be found here.  So while it’s possible that other soft drinks within the 7UP, Sunkist, A&W, Canada Dry and RC Cola portfolio also declined, the fact that these TEN products sales did not balance the other beverage losses indicate that they were also losing sales thselves.  Times are tough within carbonated soft drinks right now, especially when you’re not a Coca-Cola or Pepsi with a broader more diversified beverage (or food) portfolio.  And even these two global conglomerates recently released results that were slightly less positive.

Dr Pepper TEN and the other TEN products still stand a chance at survival, because it is keeping in line with trends toward lower calorie consumption.  However, delivering growth with less marketing support and when everyone is pushing full calorie offerings makes it challenging.  At some point, Dr Pepper Snapple Group will have to make a decision whether they will re-invest in Dr Pepper TEN, or turn their attention toward other initiatives.  Let’s just hope they make this decision sooner rather than later.

Coca-Cola’s Reply to SodaStream: Keurig Cold

Courtesy of nytimes.com

Most people by now may have heard of Coca-Cola purchasing an investment stake with the makers of the Keurig machines – Green Mountain Coffee Roasters (GMCR).  For those that haven’t, there’s some quick information from the New York Times here.  As a result of this deal, Coca-Cola appears to be making its first foray into small home appliances and endear itself more closely with consumers.  Experts have called this a great deal for both companies, providing each with mutual benefits.  But is this really the case where both companies benefit?  And what about other companies, should companies like Pepsi, SodaStream, or Starbucks be concerned?  Let’s take a quick look, first at the participating companies and then toward the others that are potentially affected.

For GMCR, this is partnership born out of necessity that will secure their footing in the single-serve beverage marketplace.  Following 2012, Green Mountain’ single-pod (K-Cup) cup patent expired and paved the way for other manufacturers (namely store brands) that could make these beverage pods cheaper.  To ensure survival of this increasingly rich revenue stream (more than two-thirds of the company’s revenues come from these pods), GMCR took to forming licensing agreements.  Coca-Cola was added to a licensing roster that already includes Starbucks, Lipton, Snapple, Timothy’s, Kahlua, and many more.  With a Keurig machine that produces single-serve hot beverages and now one that can product single-serve cold beverages, Green Mountain has certainly done well to ensure its survival.  With Coca- Cola’s reach across the consumer distribution channels, the Keurig machine will see dramatic business growth over the course of their 10-year pact.  Think of what Coca-Cola has done for beverage brands like evian, Monster, and vitaminwater.  An even better scenario would be signing Pepsi to a licensing agreement as well, which will further increase the Keurig’s machine placement among households and strengthen their dominance in making branded single-serve pods.

With Coca-Cola, this is a partnership that further segments the beverage landscape, and answers competitive pressure from new entrants to the ever-changing beverage market.  Coca-Cola is undoubtedly answering SodaStream’s “Sorry Coke and Pepsi” campaign about how the global beverage manufacturer is creating waste through its plastic bottles.  With single-serve pods and small home appliances, Coca-Cola is able to compete in a position similar to SodaStream – providing carbonated beverages at home without the need for plastic bottles.  And Coca-Cola now has an opportunity to exist on the counter shelf within the household, in addition to the refrigerator, pantry and garage.  Think about the ability to remind the consumer to consumer or purchase your product when your products are so pervasive within their household.  The next step to success for Coca-Cola may be investigating opportunities to leverage Coca-Cola Freestyle (create your own beverage mix) with the Keurig Cold, building on consumer insights to provide custom combinations and offer exclusive flavors “voted” by consumers.

Courtesy of belloblog.com. Scarlett Johansson stars for SodaStream’s 2014 SuperBowl spot – “Sorry Coke and Pepsi”.

For SodaStream, this marks their inclusion into the Soda Wars that has primarily existed between Coca-Cola and Pepsi over the past few decades.  If you keep on making eye-catching commercials targeted against the beverage conglomerates, they are certain to pay attention and respond.  This may be detrimental to SodaStream given the extra competition toward securing household counter space, but it also calls for innovation and a return to focus on the product benefits.  SodaStream’s foundation is still their ability to make soda at home, less expensive and without the use of plastic bottles.  Similar to GMCR, SodaStream must innovate and work to secure more licensing agreements.  Beyond Kraft and Ocean Spray, SodaStream may also work to sign on other brands such as Pepsi, Dr Pepper, and many more.

Now that Coca-Cola has invested into single-serve pods, it’s almost certain that Pepsi will respond in some way with their own pod offerings.  They responded in the past to Coke Zero with Pepsi Max and Dasani Drops with Aquafina FlavorSplash, amidst a host of other gap-filling products.  Pepsi surely won’t allow Coca-Cola to dominate the consumer’s counter space when their own offerings are just as robust, so it will only be a matter of time before Pepsi take the Soda War to the small home appliance.  The question is when and with whom.

The dark horse in all this may actually be Starbucks.  Starbucks had trademarked the name “Fizzio” with the intent to produce their own carbonated beverages.  To expand on their own burgeoning beverage empire, Starbucks may need to move up the deadline for when the Fizzio will be launched, or partner more closely with GMCR to serve both hot and cold single-serve beverage pods.

This news of Coca-Cola and Green Mountain Coffee Roasters signing a 10-year agreement has certainly created ripples across the industry.  The impact that has yet to be fully fleshed out with retailers as well, and that itself will be another article in the coming weeks.

5 “More” Questions with Hard Rock Energy’s David Drow

Hard Rock Energy Image

When people think of the energy drink category, they typically think of Red Bull, Monster, and Rockstar.  To a broader extent, consumers also consider Nos and Xyience.  All of these companies have had to build their brand from the ground up, with very little leverage in the first place.  How would the product’s success change if they had some brand equity they could leverage?  We encounter such a case with Hard Rock Energy, an energy drink licensed through Hard Rock International – the themed restaurant chain with rock and roll memorabilia – to market energy drinks.

BevWire recently connected with David Drow and Brent Campbell for an interview.  David Drow is the Chief Executive Officer and Brent Campbell is the Chief Operational Officer of Enterprise Beverage Group, the licensees for the Hard Rock Energy brand of energy drinks.  What initially was “5 Questions” spiraled into many subsequent questions as BevWire wanted to learn more about the business aspects of Hard Rock Energy.  The below is the second part of the “5 Questions” interview with David Drow.  We will be covering the brand’s marketing tactics, test market results, and David’s views on growth opportunities as well as growth barriers.  Click here for last week’s “5 Questions” piece.

BevWire: How successful has Hard Rock Energy been in its test markets of Chicago and Florida?  Has there been strong trial and subsequent repeat purchases?

David Drow:  It is still too early to tell at this point.  Initial sales have done well with limited support.  Our first test stores went “live” in early December and have done very well with the product.  We have enjoyed 15% share of energy drink sales and have had multiple repeat customers.

BW:  For subsequent expansion beyond Chicago and Florida, will cities with Hard Rock branded properties taken precedent over ones that do not have Hard Rock branded properties?

DD:  The initial test market was originally Chicago only.  It was selected with a couple of key criteria in mind: there was a local Hard Rock presence (this guaranteed brand awareness and would also allow us to utilize those resources in the launch), Chicago has a sizable population base that would allow us to gauge the acceptance of the product, and the population is considered a microcosm of the remainder of the country.  South Florida was added to the initial launch as a way to support our Seminole Tribe of Florida partners.  And let’s face it…. It’s a lot more pleasant marketing a beverage in the dead of winter in Miami than it is Chicago (no offense Chicago!)

BW:  How do you plan on reaching your core demographic target audience (males 18-24)?  What type of specific grassroot and social media tactics will you be implementing that caters to this audience?

DD:  While this is our core demographic, the category is ever expanding.  My direction to my team is “everything social”.  All marketing must have some type of social media exposure for each event or promotion.  We are focusing on music and music related events.  It is not only a good fit for the brand, it plays a major roll in the lives of our key customers.  We are developing both a strong social media presence and a robust website at hardrockenergydrink.com.

BW:  With regard to “everything social”, does that mean Hard Rock Energy’s marketing tactics differ differently between Twitter, Facebook, Instagram and other social tools?

DD:  Our goal is to utilize each social media vehicle to capture certain niches within our target demographics.  Hard Rock Energy’s website and mobile sites are our central hub for all main/universal information on our product and brand.  The Facebook page is used as the main communicator for large-scale communications.  We utilize Twitter for communication to capture current industry trends as well as generate a broader international reach; as we’ve noticed that most of our international audience is on Twitter.  Instagram is utilized to gather information on what the current trends are within the industry as far as collateral goes; but is also our “wild card” resource for reaching our audience.

BW:  What do you see the top three biggest opportunities toward growing of Hard Rock Energy?

DD:  The energy drink category continues to grow, yet there are very few new entries with the power and branding of Hard Rock.  There also appears to be some fatigue with the two majors.  As such, consumers appear poised to consider alternatives.  The levels of interest both domestically and internationally is greater than I ever anticipated.

BW:  What do you see the top three biggest challenges toward growing of Hard Rock Energy?

DD:  Competitors with unlimited budgets, regulatory intrusion, and growing too fast.  We need to ensure support to our partners.

Great insights on this second part of the “5 Questions” with David Drow.  You’ll notice it was actually six questions among this great conversation with David.  As we touched upon the core demographics and how the company’s marketing plan, it’s definitely an indication that the energy drink is focused on building the lifestyle brand that connects with the consumer both online and offline.  Understanding the top barrier to growth of competitors with unlimited budgets ensures that David’s team focuses on delivering success at the most tactical of levels first.  And leveraging on the presence of Hard Rock properties certainly helps as a competitive advantage.  A great “walk before run” recognition to grow their business.  Hopefully we will see this energy drink brand in Canada soon enough.

Thanks again for David’s time, and Brent for arranging this interview!


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