October 25, 2009 Leave a comment
BevWire recently learned that Canada Dry’s Tonic Water is being delisted or discontinued. A store clerk at the local supermarket said that they can no longer order in this product because it wasn’t being made anymore. This is really interesting news because Orangina was taken off cold channel shelves earlier this month, and now another product from this company is being taken away.
BevWire understands that some companies are cutting down the number of SKUs they bring to the market, but why cut something when it actually sells? Is this brought about because private label tonic water is the number 1 seller in the market, while Schweppes is number 2? Quite possibly. Tonic water is a generic mixer with other beverages so the margins may not be as high. And since Canada Dry is not in the top 2, there is no point to remain in the market. Furthermore, customers may believe there is little or no differentiation between Canada Dry’s Tonic Water and a private label tonic water, and thus weaken the product’s sales. If Canada Dry is indeed exiting tonic water, they will likely focus their efforts on what works best for them – Ginger Ale, Club Soda, and their recently launched Green Tea Ginger Ale.