February 28, 2011 11 Comments
Kraft is set to launch it’s first new product in 15 years, and it’s a zero-calorie, liquid water flavor enhancer called Kraft MiO. Available in six flavors (berry pomegranate, fruit punch, mango peach, peach tea, sweet tea, and strawberry watermelon), MiO is packaged in a water droplet-shaped plastic bottle that will yield 24 servings. Nutritional information on the Kraft MiO’s Facebook page (link here) says that it’s no calories, no artificial flavors, and no caffeine. However, as USA Today pointed out in their report on MiO (link here), it does contain artificial colors, sweeteners, and preservatives. The product – which is similar to Kraf’ts Crystal Light powder – will launch March 7 in the United States, but no word yet on whether it will come up to Canada.
While some the news reports and Kraft propaganda claims that this product will revolutionize the water enhancers category, I’m not fully convinced. Will consumers see this only as a novelty item, try it once and not re-purchase? And since water enhancers are mainly in powder form (with Kraft having a large market of the powder water enhancer category), how much cannibalization will occur? Will consumers want to trade up from the less expensive powder format, for the more expensive liquid format? The idea of a liquid water flavor enhancer is fantastic, and if Kraft is able in getting consumers to adopt MiO beyond the trial stage it will be a huge success for both the product and the category. Right now, Kraft is not only trying to introduce a new product, but educate the public on the new method of flavoring their water. The majority of consumers that flavor their water uses a powder, so changing behaviors and habits might take a lot of marketing. And on the cannibalization factor, getting consumers to switch away from powder to liquid will see consumers leaving Crystal Light (hopefully for MiO), just how many will be the question. In the end, anyone consumer that trades the powder format for liquid will likely be trading to MiO since there are not too many other substitutes on the market right now. However, unless the cost to product MiO is significantly lower than Crystal Light, Kraft may actually be taking in less profit. A package of 30-count Crystal Light currently retails for $13, working out to 43cents each serving, while a 24-serving of Kraft MiO will retail for $3.99 (breaking down to 16cents each serving). Consumers that work out these calculations will see that MiO gives more value than Crystal Light and switch to MiO, leaving Kraft with savvier consumers, but less profits.
MiO can work, but you really have to wonder if it’s in Kraft’s best interests to have it work.