May 28, 2012 Leave a comment
Pomegranate juice manufacturer POM Wonderful has frequently been in the headlines these past few weeks, and not all are positive headlines. Earlier this month the juice company extended their product line to include a smaller single serving bottle: the 236ml (8oz) bottle (one of many new articles link here). Just last week they were involved in headlines for supposedly losing a Federal Trade Commission (FTC) ruling on deceptive advertising; it’s really about perspective as POM Wonderful believes they have won a considerable measure from the ruling (link here). What does the FTC ruling mean for POM Wonderful now? Will consumers still see the same advertising health claims from? And is the 8oz bottle extension good for business, given that size proliferation eventually leads to product rationalization?
On the issue of the FTC ruling, POM Wonderful’s first reaction was to roll out some advertisements celebrating the judge’s ruling. While they can no longer claim to prevent heart disease or prostate cancer without scientific research, the ruling agreed that there are indeed significant health benefits. Beyond the first wave of advertising response, POM Wonderful may likely ramp up their health claims to test the limitations of the FTC ruling. However, there will be a paragraph about how there was scientific research conducted to prove the particular health claim. The real question then becomes whether it will affect how other beverage products are advertised in the media (ie energy drinks with their claims of alertness, or energy shots claiming no crash, etc).
Relating to the introduction of the 8oz bottle, this line extension should fit well with the rest of the line-up. One might argue for cannibalization, but the 8oz is going after a different consumer segment and a different consumption occasion. Unlike soft drinks which has sizes like 8oz, 10oz, 12oz, 14oz, etc, the next largest size from the 8oz bottle is twice as large (16oz). There stands to be more cannibalization between the 16oz and the 24oz bottle than the 8oz and 16oz formats. Also, POM Wonderful appears to be targeting the health-conscious parent that wants their kids to think and drink healthy. The 8oz bottle is perfect for kids, where parents can pack the beverage into lunchboxes or even be sold in school vending machines. Even at such a small serving size, the bottles are resealable so the actual consumer (children) can use the bottle throughout the day. In terms of grocery location, the 8oz bottle may not lead to product rationalization just yet; it may not even appear in the same location as the other POM products. At such a small size, the 8oz bottle may appear in impulse coolers or ice barrels near the checkout where thirsty shoppers may want something tasty, small, and inexpensive to quench their immediate thirst. The added benefit is then that POM Wonderful now has a secondary location to attract the shopper’s purchases.
In all likelihood, the 8oz bottle should sell well individually and not hurt the sales of other products in line-up. Given that it is a single serve bottle that is targeted at youth, the natural line extension beyond the single bottle would be a multi-pack like 6x8oz bottles or 12x8oz bottles. We’ll have to wait and see when that time comes, and what type of advertising health claims the communication shows.