Liquid Enhancer Segment Legitimized With Powerade Launch

Sourced from http://www.coca-colacompany.com

Funny how just a few years ago, no one has ever heard of liquid flavor enhancers but now many people have heard about and possibly tried MiO.  This is due in no small part to Kraft, which created the product segment and put a lot of marketing support behind their MiO to introduce and educate consumers on how to use this product.  And as Dasani introduced their own liquid enhancer to capitalize on the market trend, Kraft innovated to stay ahead of its competition.  These innovations include employing a dual brand strategy by launching Crystal Light Liquid, as well as extending MiO’s platform by branching out to energy and sports drinks.  With recent news about Powerade coming out with a liquid enhancer, this segment appears to provide legitimate profitable returns for manufacturers.  However, is the segment itself big enough for so many different branded offerings?  Will this spur Pepsi to participate in some shape or form?  Possibly with a Gatorade drop to maintain their market share in sports drinks?

Courtesy of http://www.makeitmio.com

Liquid enhancers have enormous growth potential and despite its infancy, have extended across sports drinks and energy drinks.  This has certainly broadened its consumer appeal and increased the segment’s awareness and adoption rates.  However, the segment still appears to be crowded with four branded players: MiO, Crystal Light, Dasani, and now Powerade.  And it only looks that way because the segment itself is still small.  For all the excitement around MiO, it is still only a $200-$300 million brand.  Combined with Crystal Light, Dasani, Powerade, and even private-label offerings, the segment itself is not predicted to be over $500 million.  But with more advertising support behind each of these beverage properties as well as higher levels of consumer adoption, the segment will grow to be large enough to house these four liquid enhancer brands.  MiO will certainly be rewarded for being the first mover.  Consider this the initial stage of energy shots, when 5-Hr Energy was the only one in the segment and it took some time to gain sales.  As more companies introduced their own energy shots, the segment gained popularity and market size.  Through all this, 5-Hr Energy became the de facto leader in energy shots and rebuffed Red Bull, Rockstar, and Monster.  5-Hr Energy capitalized on the news that other energy drink manufacturers brought to the segment and benefitted from being the most recognized name among the consideration set.  So while it currently appears that liquid enhancers is congested, the potential size of the segment mirrors energy shots, and may even outpace it given less consumer backlash.

With great potential, comes great competition.  We’ve seen Coca-Cola wait for Kraft to prove that this is a viable segment, and then furiously pursue them with their own offerings.  Why has Pepsi not done anything yet?  A Gatorade Drop would certainly gain lots of attention among athletes, not to mention give them another extension to complement their Gatorade Chew.  Pepsi could also come out with a tea offering to start off in a segment where there are no current liquid enhancers (though there are rumors that AriZona is coming out with one soon.)  Given that liquid enhancers can be sold warm and are so compact, they can be stocked on shelves and also at the cash register as consumers complete their purchases.  Pepsi would be missing out on a large opportunity if their only presence were in coolers or displays – far away from the point of purchase.  My guess is that they are likely in the works to launch their own enhancer soon, but only time will tell.

Liquid enhancers are here to stay and has proven to be rich opportunity for the participants.  As the segment gets bigger, it will spell of a missed opportunity for Pepsi if they remain on the sidelines.

Zevia’s Organic Growth Differentiates Them From vitaminwater

Courtesy of Zevia.com

Zevia recently announced that they were adding three more all-natural soda flavors to their Canadian offerings.  Cherry Cola, Dr. Zevia and Caffeine Free Cola joined the existing Canadian selection that included Cola, Cream Soda, and Ginger Ale among many other flavors.  In total, that brings their total portfolio to 11 sodas for the Canadian market.  Our American counterparts only have four incremental flavors than us, which may prove that our taste preferences are not really all that different.  See all the Zevia flavors here.  However, with the proliferation of soda flavors, will Zevia run into a problem that we have seen with another beverage offering: glaceau vitaminwater?  Will this end up being detrimental to Zevia in the long term, as we have seen vitaminwater peak and start to decline with reduced advertising support?

In more ways than one, Zevia and vitaminwater have common ground that would lead us to come to this conclusion of Zevia’s possible rise and fall.  For one, both beverage brands capitalized on consumption trends.  Zevia gained market acceptance as consumers became increasingly interested in all things “all-natural”.  vitaminwater gained sales as consumers started to look for something less boring than bottled water.  And because both were the leaders of their respective categories, their growth became synonymous with their segment’s growth.  Both companies started out as independent outfits separate from global beverage manufacturers.  vitaminwater as most of know may know, is now a part of Coca-Cola, despite all the separation the hydration brand is trying to create between them.  In terms of product offerings, both have great tasting products that stretch into the double digits.  It is a very plausible assumption to think that Zevia will follow vitaminwater’s path.

However, what sets Zevia a part from this comparison is that they are still a stand-alone entity and not a division within a larger beverage organization.  That makes a world of difference.  While they may not have the luxury of stronger financial backing, they are also growing themselves organically.  When vitaminwater was brought into Coca-Cola, the hydration brand was given much stronger product distribution and piggy-backed off of Coca-Cola’s distribution network.  This helped vitaminwater gain strong market visibility, and at a much quicker rate than when they stood separately.  Unfortunately, the downside of being in a conglomerate beverage company also proved detrimental to vitaminwater.  As Coca-Cola shifted their focus inward to grow their core offerings of Coke, Diet Coke and Coke Zero, vitaminwater as well as other beverages in their portfolio suffered.  They received less advertising and promotional support.  Zevia will continue to grow because they are their own company, and their sole dedication is toward this beverage brand.

Zevia is also not as celebrity-endorsed as vitaminwater.  With celebrity endorsements, they could endorse one beverage now and change their endorsement later when another refreshment company provides them with a more lucrative deal.  And while Zevia has less star power than vitaminwater, they are also certainly less volatile given the celebrity’s reputation.  For example, if a celebrity was perceived negatively by the media, the products and services they endorse would receive a “halo effect” and also be viewed as negative.  Take Tiger Woods and Nike a few years back.  Or does anyone want to have Lindsay Lohan as your spokeswoman right now?

In any case, Zevia should continue to rise while vitaminwater continues to experience growing pains.  While Zevia may still yet encounter the same problems that vitaminwater is currently going through, they still have a ways to go.  The all-natural trend is here to stay, and all-natural sweeteners are getting more widely accepted by consumers.  Let’s just hope that Zevia keeps these things in mind should a similar scenario arise for them.

Coca-Cola Embraces Opening Happiness for Summer 2013

Coca-Cola’s 2013 cold-activated cans, exclusively with 7-Eleven.  Image from 7-Eleven’s twitter account.

It’s certainly been a busy summer for Coca-Cola with tons of consumer news from around the world.  Through a variety of news sources, BevWire has been able to pick up on a few of these news items.

First there was news of Coca-Cola partnering with 7-Eleven to provide summer-ready cold-activated aluminum cans exclusively (picture above).  These cans are available in 16oz (473ml) but there has not been any indication on whether they will also be available in the regular 12oz (355ml) cans, which would make it available nationwide to all retailers.  This continues a trend of beverage manufacturers making use of thermochromic ink to show that the soda (or beer in the case of Coors) are chilled to an appropriate temperature for cold consumption.

Following the news on color-changing cans, Coca-Cola announced that they had created a soda can that can be shared.  While I’m not fully sure if the designer logo featured in the video is the same as the Coca-Cola logo designed by Jonathan Mak (the same designer that gained fame creating the Steve Jobs Apple logo) – it certainly shows that Coca-Cola is all about passing along the message of happiness.  Being able to twist and share the core product itself may potentially lead to other opportunities about packaging.  And for regions and countries that focus intensely on calorie consumption, these sharing cans may be one way for Coca-Cola to say that they are limiting calorie intake (although this is only a positive byproduct of the original intention).  See the YouTube video below.

awesome idea via @beveragedigest where you can break apart one Coke can to SHARE with a friend. i’d do it. #BevWire ow.ly/lwKKO

— BevWire (@BevWire) May 30, 2013

Finally, there is news of Coca-Cola’s European team following in team Australia’s footsteps in customizing Coca-Cola cans with popular male and female names (link here).  As per the link detailing their European entry, this followed on the success of Coca-Cola Australian where sales improved 4% with these new customized soda cans.  With the customization project extending out to include a vending machine to personalize Coke cans and bottles, the project is truly showcasing ways to extend warm feelings.

The summer of 2013 is about to begin and Coca-Cola has shown that they are all about opening happiness and sharing this with everyone.  While these initiatives are all occurring in different parts of the world, the message that the company embraces is the same everywhere.  I’m sure that there are other strategies the beverage company plan on sharing the joy with consumers and these will be brought to light either this year, or at some other time.

Increase Customization to Satisfy Soda Shopper Needs

It’s no surprise that carbonated soft drinks have been on a sales decline for the past few years.  Subjects such as stronger health-focus, lower calorie sodas, and government-proposed taxes are just a few examples of contributing factors toward the category’s decline.  So what has beverage conglomerates done to respond to this challenge?  Increase their product assortment – especially in the low calorie segment – and expand their package ranges among existing flagship brands.  One such example of proliferating the package range is delivering even more customization at a grocery retailer.

Over the last few months, we have seen examples of this customization from both Coca-Cola and Pepsi.  Beverage Digest tweeted about Coca-Cola’s partnership with Kroger’s to deliver a retailer-specific merchandizing strategy, where individual 12oz (355ml) cans of soda were lined up in racks for shoppers to choose their desired composition for an 8- or 10-pack.

Want to be a soft drink bottler? Not quite. But Coke Kroger test allows creation of custom can multi-packs. twitter.com/BeverageDigest…

— Beverage-Digest (@BeverageDigest) March 19, 2013

Shortly after that, BevReview.com’s readers tip off a customized offering from Pepsi, offering a mix of both Pepsi and Mountain Dew in one 28- and 30-pack offering.

On the Shelf: Pepsi & Mountain Dew 28 Can “Combo Pack” bit.ly/15QDyOr

— BevReview.com (@BevReview) April 25, 2013

Both types of offering are examples of increased customization and are intended to satisfy more of the shopper’s needs.  Both are trying to ensure that the grocery retailer fulfills most (if not all) of their buyers’ soft drink requirements on that one shopping trip.  Coca-Cola’s offerings are also eliminating the fear of expired cans simultaneously.  After all, as a grocery shopper that previously had to buy a 12-pk of Tab but really only wanted 4 cans of Tab can now get these 4 cans, along with a couple cans of Fanta Orange and Fanta Grape.  Pepsi’s combo pack meets shoppers’ needs a little differently, but still offers customization since you can purchase both top-selling beverage brands in one case pack.

These custom offering are likely the end result of valuable shopper insights on consumption behavior.  What’s also interesting about Coca-Cola’s create-your-own-pack initiative is that it mimics their Coke Freestyle machine.  To remind some readers, the Coke Freestyle is the beverage manufacturer’s fountain unit that offers over 100 flavors of soda.  The important part to note for this machine is that in addition to allowing the thirsty consumer to create their own beverage mix, it also provides the Coca-Cola with information on what flavors are dispensed the most and possibly satisfy a previously unmet beverage need.  Creating your own multipack allows them to do the same thing, by monitoring shipment levels of individual cans and tracking the point-of-sale scanned data.

For Coca-Cola and Pepsi, this is an example of passing influence to the purchasers while maintaining their own product control.  By giving customers more choices and customization, they have effectively satisfied more of the shoppers’ needs and benefited themselves in the process with rich information.  Everyone wins in this scenario.

Coke Zero Targets Men For 2013 March Madness

Have you seen the latest Coke Zero commercial?  If not, click on the link below, also found from Advertising Age’s article detailing Coke Zero’s new advertising agency, Droga5.

Unlike last year’s Powerade commercial, this year’s March Madness commercial by Coca-Cola features Coke Zero.  The question is why focus on a soda rather than the sports drink?

Inherently, the message and audience is geared toward a completely different type of beverage consumer.  The Powerade commercial was a signal to Gatorade that Powerade realizes that they are the underdogs in the sports drink segment, and they must work harder in order to compete with the sports drink giant.  It was targeted toward the athlete.  This year’s March Madness commercial broadens the reach by focusing on men, not just athletes in particular.

An office worker drinks a Coke Zero to confirm it’s not his fault he’s working on the March Madness brackets during work time. From creativity-online.com.

Coke Zero wants to identify with the spectators, not just the athletes.  The message is that even the casual sports fan can enjoy everything and participate in March Madness by drinking Coke Zero and picking the winners.  The change in Coke Zero’s focus is understandable, given that CSDs (carbonated soft drinks) are a larger segment than sports drinks and offers greater sales potential.  Also, why would you fight from the position of an underdog (Powerade) when you can  fight from a position of strength, and build on your leadership (Coke Zero leads zero-calorie CSD market)?

Keeping in line with Coca-Cola’s theme on focusing on the intangibles, there is no mention of calories.  Notice how Coca-Cola’s tagline is “Open Happiness” and Diet Coke’s tagline is “Stay Extraordinary”?  There is no focus on tangible attributes, and tries to position the beverage as a lifestyle choice.  For Coke Zero, men do not want to be reminded that they can “Enjoy Everything” by consuming a beverage without any calories.  The less the messaging focuses on calories (and more on sports or happiness), the better it should perform.

All in all, the winning potential is great, and offers them the ability to leverage themselves from a position of strength.  Smart move to switch the focal point from athlete to casual fan and spectator.

Super Bowl Series: Kraft MiO Fit Needed More Than 30 Seconds

The fourth and final installment of BevWire’s 4-part Super Bowl Series focuses on Kraft MiO Fit’s ad with the 2013 Super Bowl.  Along with the standard participation of Pepsi and Coca-Cola, this year we will also see Kraft MiO and SodaStream.  The Super Bowl Series will take a look at each of these beverage manufacturers’ involvement with the Super Bowl.

Click through to read the rest of the Super Bowl Series:

Part 1: Super Bowl Series: Did Pepsi’s Crowd-Sourced Halftime Show Add Any Value?

Part 2: Super Bowl Series: SodaStream Banned Commercial Help Build Brand Recognition

Part 3: Super Bowl Series: Coke’s Social Engagement Effort Delivers Mixed Reviews

While SodaStream made a lot of noise for it’s banned Super Bowl commercial, Kraft MiO also generated some buzz with its participation in the Super Bowl this year.  Having revealed that they will be featuring the Fit during the Super Bowl, they came up with this teaser campaign.  See the two videos below:

It appears that through the teasers, Kraft is aligning their liquid flavor enhancer with American patriotism.  With the colors of the American flag and the “America the Beautiful” being whistled in the background, would you agree?  The actual game day spot titled “Anthem” showcases Tracy Morgan asking you to welcome change to make America better.  After seeing the commercial, do you agree that MiO Fit is changing America for the better?  Did the commercial “work”? See the actual Super Bowl spot below:

Although MiO Fit could really be changing America for the better, it is highlighting a problem that no one really considered a problem in the first.  Was there anything wrong with Gatorade or Powerade that warranted improvement?  Most people do not think there was anything wrong with these sports drinks.  MiO Fit faces an uphill battle no matter what it does because it’s not just creating a product in an existing segment (flavor enhancers).  It is creating a new segment (liquid flavor enhancers) and must bring attention to a problem that no one was previously aware of.  In that perspective, it is changing America for everyone’s betterment since MiO Fit offers hydration and electrolytes to anyone with a bottle of water.  That is their end goal: raising awareness that there is a better delivery system out there for electrolytes.

In spite of this message, the feeling was that it lacked in overall effectiveness – the commercial did not work.  If you did not know already know about the MiO Fit, or if you were not a beverage fanatic, you would probably have dismissed this bland commercial.  Most successful Super Bowl commercials are funny or attention-grabbing, but it seems that the Fit’s commercial didn’t have enough of either component.  Super Bowl commercials tend to provide an easily followed storyline that can be communicated in 30 seconds or 60 seconds, using more imagery than words to convey this message.  Consider the GoDaddy Bar Rafaeli Smart-Sexy commercial.  Or the Doritos Goat For Sale commercial.  Both were memorable because it was funny, or it got your attention.  The Mio Fit commercial involved a lot of talking in 30 seconds, forcing the viewer to pay close attention in order to clearly articulate the message.  It lost the audience’s attention.  If it had kept their attention, then listening to the references about changing chicken nuggets and boy bands was actually funny.  Maybe if the spot was 60 seconds instead of 30, it would have had a stronger effect.  But cramming so much speech into 30 seconds without the showmanship of other Super Bowl spots is a recipe for disaster.  In the end, it seems this would be more suited for a YouTube release than a Super Bowl TV spot.

While the Kraft MiO Fit’s success cannot be judged by commercials alone, let alone one commercial, this one fell short of expectations.  It will depend on what else the liquid flavor enhancer comes up with in the future to promote this extension.  All great products fulfill a need, it’s just tough to get the right message across with only 30 seconds.