Dr Pepper Highlights Individuality in “/1″ Campaign

Starting today, Dr Pepper will be launching an extension to their previous T-shirt “I’m a Pepper” campaign.  The new campaign titled “/1″ highlights the character’s uniqueness and that they are indeed one of a kind – 1/1 – truly unrivaled in what they do.  Dr Pepper’s advertising agency conducted research to ensure that those numbers represented in the video are statistically accurate, and that these people are peerless in what they do (how many models-turned-boxers do you really know out there?).  Dr Pepper says that the characters featured are real-life people and while they may not be world famous, these individuals are renowned within their respective fields (boxing, roller derby, and air guitar).

It’s worthy to note that this campaign extends to focus on Diet Dr Pepper as well.  Traditionally their commercials and features have been separate, but they have chosen to include Diet Dr Pepper as well in this campaign.  Dr Pepper TEN likely was left off because the messaging of “Not For Women” is on solid footing right now.  As seen from the commercial below, Dr Pepper wants to highlight your individuality in choosing not just Dr Pepper, but also Diet Dr Pepper

So would you rate these commercials as successful?  Do they get your attention? Does it make you pick up a Dr Pepper when you are at the supermarket or convenience store, especially when Coke or Pepsi also also available for your purchase?

I think it does…with some caveats.  While the messaging is solid and connects with the viewer, it still has a strong chance to get lost among all the other commercials that are playing.  Not to mention that Coca-Cola and Pepsi have more money to spend on advertising;  the chances of you being bombarded with soda commercials are quite high and remembering Dr Pepper over a longer time period are quite low.

Dr Pepper’s series of commercial stands apart from how other soda companies have advertised their trademark beverages.  Coca-Cola talks about happiness when you drink their carbonated soft drinks (Open Happiness) and Pepsi advertises on living in the moment (Live For Now).  Dr Pepper turns the focus to you, on how you are special and different from everyone else out there.  In today’s society, everyone wants to be known for being themselves, so Dr Pepper has tapped into how individuals want to think which makes it easier for them to identify themselves with Dr Pepper.  In my opinion, this is a stronger message than being happy or living in the moment.

Still, it is a matter of whether this will translate to any form of wins for Dr Pepper.  Are consumers more likely to buy more Dr Pepper because of this commercial?  Will these purchases come at the expense of Coke, Pepsi, or some other non-Dr Pepper-owned beverage brand?  Keep in mind that Dr Pepper also has to compete with other beverage products, like Red Bull, Gatorade, Nestle Water and the like.  At the supermarket or convenience store’s point of purchase, some of these products will undoubtedly be on sale and make that decision to choose Dr Pepper even harder.  It may come down to whether you are willing to pay more to be unique.

So the next time you are purchasing a soft drink – any drink actually – will you choose Dr Pepper because it reminds you of your individuality?

Canadian Grocery Re-post: Gas Pump Vending Machines Coming Soon?

Recently, the American publication Vending Times reported on some interesting news that may increase sales for beverages and other food items as well (link here).  Vendgogh, a company that provides “gas island solutions” have come up with a concept where gas consumers can integrate their beverage and snacks purchases with their fuel purchase.  The gas pump machine that normally asks the customer which grade of gas they want to fill up and if they want a car wash, can now also be programmed to prompt about purchasing drinks and snacks.  As more and more fuel stations are fitted with technology to allow for payment at the pump, these same stations are seeing their basket size decrease with less opportunities to influence the fuel customer.  The National Association of Convenience Stores (NACS) indicates that about half of all gas customers do not go inside the store, and therefore gas stations have half as many opportunities to drive incremental sales.  The premise of this concept gives petroleum stations increased opportunities to convert pay-at-the-pump consumers without them ever having to enter the fuel station kiosk or store.

While fuel is the core of this channel’s business, growing the basket size is just as important here as in other channels.  Customers may prefer paying at the pump since it’s convenient and quick, but gas owners prefer the customer come inside since there’s many more opportunities to up-sell the customer.  Have you bought a beverage or lottery ticket as part of your fuel-up?  That likely is a result of suggestive selling by the store clerk.  Without the ability to add on beverages, snacks, lottery tickets, or cigarettes, the gas station is only getting base business.  And with so many gas stations around, the competition is fierce for the customer’s dollar.  Even the same chain will be competing with the next closest gas station in the chain for the same dollars.

Vendgogh’s beverage gas pump unit re-establishes the suggestive selling opportunity for the gas station.  By maintaining the customer’s convenience to pay at the pump, the fuel station also has the ability to up-sell beverages and snacks, which drive over 40% of a gas station’s in-store sales.  Beverage purchases drive about 25% of the in-store sales, so popular beverage options such as energy drinks, carbonated soft drinks, and bottled water can be expected to be filled in the vending unit.

Gas stations can always rely on one thing: customer trips.  There will always be motorists that need to refuel, and therefore provide gas stations with opportunities to influence their refuel purchase.  Having a machine to assist in growing the customer’s basket should be a welcome tool across the overall petroleum convenience channel.

Starbucks Buys Teavana, Diversifies Beyond Coffee

It appears that Starbucks’ recent purchase of Teavana has some analysts and coffee drinkers scratching their heads.  Considering that the coffee giant already owns a tea brand in Tazo, why would they want to purchase another tea brand?

The simple answer is that Starbucks is readying their continued evolution to a diversified beverage company.  Having changed their logo to remove the words of “Starbucks Coffee” shows their seriousness of extending their brand beyond just coffee, and beyond the Starbucks name. Their past acquisitions of Tazo (1999), Ethos Water (2005), and Evolution Fresh (2011) have been instrumental for expanding their beverage footprint in the consumer’s mind and physical purchase locations.  And while most of these offerings have been incorporated within the Starbucks coffee shops, other products have expanded their reach into grocery supermarkets and other consumer outlets.  Products like the bottled Frappucinos, Starbucks VIA Ready Brew, Verisimo system, Starbucks Refreshers, Tazo Tea, and Evolution Fresh juices and smoothies have all permeated other channels and have seen some form of success beyond the Starbucks coffee shops.

So what can we expect the Teavana purchase to do for Starbucks?  How is this product differentiated from Tazo Tea?  Will there be some form of cannibalization between the two tea offerings under the Starbucks portfolio?

The Teavana purchase will undoubtedly expand Starbucks’ reach outside their branded coffee shops.  Teavana owns and operates their own stores, which may soon incorporate select Starbucks products that fits into the Teavana theme and strategy.  For example, selling Starbucks coffee within Teavana shops may not be appropriate, but selling Evolution Fresh juices and smoothies and Ethos Water may be a possibility.  This cross-selling effort will certainly increase the reach of non-coffee beverages under their portfolio.  Also, considering that Starbucks has started to open standalone Evolution Fresh locations in the U.S., those locations may also incorporate some Teavana offerings as well.  Aside from the bricks and mortar stores that Teavana operates, Starbucks also acquires their online infrastructure where the loose leaf tea products are sold as well.  This also significantly buffs up Starbucks online presence and can provide an entirely new set of learnings and opportunities.  Starbucks has mainly existed as a bricks and mortar presence insofar to create that “third location” away between the home and office, but expanding their online presence gives them a chance to offer additional products to the consumer.  How about purchasing some VIA Ready Brew with that Teavana tea tin?

With regard to product differentiation, it’s commonly understood that the Tazo-branded products are bottled or tea bags.  The main opportunity does not exist in offering a different form of tea packaging, but the expanded consumption occasion.  Tea bags or bottled tea are typically consumed on-the-go or at the office, because the consumer is in a rush and does not have the time to sit and enjoy the beverage.  Teavana’s loose leaf tea allows Starbucks to reach the consumer in their relaxed state – at home or at the office – when they have more time to enjoy their beverage.  In that aspect, these two tea brands should be complimentary to the overall “tea consumer” rather than cannibalistic.  It would also make sense that Starbucks only minimally incorporates the Teavana products into their existing Starbucks establish (similar to Evolution Fresh) while maintaining the operations separately and at arm’s length.

At the end of it all, this acquisition bolsters Starbucks’ presence and further entrenches their beverage offerings into the consumers’ hands – be it at the office, on the streets, or at home.

This also signals a warning shot to the traditional beverage manufacturers (ie Coke, Pepsi, Dr Pepper Snapple Group) that the total beverage landscape is changing dramatically.  Consumers are increasingly turning away from the the sodas, to coffees, bottled water, and teas.   And Starbucks is leading the charge in this area.  If you don’t believe me, check out their video below.

Cool-Ad Handles – Point-of-Purchase Innovation

Have you heard of Cool-Ad Handles?  BevWire hadn’t either until recently, when I got sent some images about how cooler door handles were being widened and being replaced with advertisements in these widened panels.  After getting some more information and research, these handle panels are roughly 4.4″ wide x 14″ long with a protective cover on top to prevent wear and tear.  The ad itself are inserts that can be printed from either high quality professional printers or your regular office printer.  What will retailers think of these wider handles?  Or even more important, how will the shoppers react to a widen handle with an advertisement at the point of purchase?  Will these handle advertisements effectively replace cooler clings and the trouble it causes some retailers from switching up the communication?

These Cool-Ad Handles may not completely revolutionize the beverage point-of-purchase, but should come close if adopted by retailers and manufacturers.  The old adage is that nearly 70% of purchase decisions are made in-store, so it is paramount to influence the shopper behavior at this point on the buying process.  If adopted by retailers, this will allow them to generate more attention to in-store specials or cross-promote with other categories (ie chips, popcorn, and candy to name a few). It may even end up as an additional revenue source, should the retailer want to adjust the communication periodically and provide this as extra advertisements.  For manufacturers like Coca-Cola, Pepsi, or Dr Pepper Snapple Group (and the plethora of alcoholic vendors), fitting these handles onto their proprietary gives them  dedicated communication for their products in replacement of cooler clings.  For both retailers and manufacturers, these communications can vary greatly from the typical in-store promotion: the space can be used to feature nutritional information, environmental sustainability efforts, charitable foundation support and many more.

From a shopper’s perspective, the key point will be whether still obstructs them from getting to their end goal – picking the product from the cooler.  That said, the handle itself must be sturdy as they may be trying to pull from the right (strong side) as well as from the left (weak side).  Aside from the handle’s strength, these Cool-Ad Handles should not cover the entire product from view.  Beverage shoppers that are still “searching” for what drink to purchase may not open the cooler door and then decide on what to buy, so the sale could be at risk if product is hidden by the Cool-Ad handle or any other communication.  On a positive note, the communication benefit for the retailer and manufacturer also applies to the shopper.  Shoppers would may like to be reminded of cross-promotions with other product categories when they buy a beverage.  After all, the beverage aisle and the general snack aisle may not be the same aisle.  This may help jog the shopper’s memory to quickly run down the candy aisle to pick up some fuzzy peaches.  And who doesn’t like to be reaffirmed that they have made a good purchase decision or supported a good cause?  All the better if the communication is reinforcing message that 10% of each bottle’s sale goes to a charitable foundation.

While the Cool-Ad handle may not completely replace the cooler cling, it has opened up a myriad of options to retailers and manufacturers.  The cooler cling is still the most reactive component, since it does not have to be placed right at the handle.  Rather, the cling itself can be placed higher or lower, to match the product itself behind the cooler door.  However, the cooler cling itself may get ignored more often than the Cool-Ad cooler door handle.  The shopper has to open the door to get the beverage, so seeing the Cool-Ad handle communication is inevitable.

And while this has only be implemented in the United States so far, there is word for Canadian expansion.  Be on the lookout for these handles when you head into your local 7-Eleven or Mac’s Convenience, or your Loblaws or Sobeys grocery store.

Mid-Calorie Sodas – Successful or Not?

It’s been over a year that Pepsi Next has first launched in test markets, and almost six months since it’s been available nationally in the United States.  Dr Pepper 10 will also soon be lapping it’s one year national launch in the market place.  These national launches proves that Pepsi and Dr Pepper both believe in the viability of the mid-calorie cola segment.  However, what are the results of this launch, and can it be considered a success so far?

For Pepsi Next, results so far can be considered average at best.   Wall Street Journal reported the Next to have gained 1% market share on US dollars (link here), although product reviews indicate that the aftertaste (end part of the Pepsi Next’s taste curve) is unpleasant and definitely feels like the artificial sweeteners (link here).  In spite of all this, Pepsi has launched two (limited for the summer) line extensions of the mid-calorie soft drink: Paradise Mango and Cherry Vanilla (pictured above).  That said, the launch can be considered a success so far, but the real test is converting these initial trail users into returning customers.

The line extensions and the continued advertising support for Pepsi Next would be much needed in order to help the brand sustain its momentum.  After all, it takes some time for a product to be accepted in the market – remember that it took Coke Zero & Pepsi Max a few years and some trying rebranding and repackaging before it caught on with consumers?  Beyond that, let’s hope for more products to enter the mid-calorie segment, and bring more attention to the category.

For Dr Pepper 10, test results have been similar to Pepsi Next.  On the Dr Pepper 10 alone, sales nationally have been strong enough to offset the declines across Sun Drop and 7UP.  And as the one year anniversary  for Dr Pepper 10 approaches, they have already worked on releasing five additional 10 calories colas.  The 7UP 10, A&W 10, Canada Dry 10, SunKist 10, and RC 10 are currently in test markets and some of these flavors should make it national (my bet is on the 7UP, A&W, and Canada Dry).

Overall, it would appear that there are two main players in the mid-calorie segment right now between Pepsi Next and Dr Pepper 10.  Coca-Cola has been reported to be trying a mid-calorie version of Sprite and Fanta in key test markets as well.  This segment will only continue to grow as consumers become more and more health conscious.  However, in order to make it a success, the main issue of taste must be addressed, since consumers likely wouldn’t sacrifice taste for calories.

And beyond that, let’s hope it makes it way up north to Canada so we don’t have to drive across the border to find some mid calorie beverages.

Kraft MiO Enjoying Exclusivity in Canada…For Now

Kraft’s liquid beverage enhancer MiO is now available in Canada, after being available in the U.S. for over a year.  My earlier post detailed the MiO’s impact on the American market, how it has led to line extensions as well as inspired copycats (link here).  While MiO is still in a state of infancy in Canada and offers very few challengers, it’s worthwhile to look at the example south of the border to see what type of impact it may have in Canada.  Here’s the first MiO commercial for Canada, followed by the American commercial link below.

American MiO commercial link here.  The differences are quite obvious in its message and communication, since each ultimately caters to different audiences.  Kraft Canada has decided to target 18-34 year old males with the MiO (article from Strategy Magazine details MiO’s Canadian strategy here).   With regard to the business impact, will the MiO inspire copycat products from Coca-Cola or Pepsi?  Will it also lead to caffeine-infused line extensions like MiO Energy?

While there exists a template in the United States, it’s important to note that the two markets are decidedly different.  As we’ve already seen, Canadians do not react to the same type of messaging and need customized advertisements.  Further to the differences, Canadian regulations also stipulate stronger focuses on health-consciousness (ie calorie listings on packaging) and product compositions (ie  mandatory nutritional tables).  This all boils down to the point that what may works in the United States may not work here in Canada.

Kraft Canada will work to grow the category of liquid flavor enhancers, and this will lead to copycats.  With Kraft bearing the education costs and the initial market research, other beverage organizations will be able to see what type of opportunities exist in this category.  Judging by how the American market is performing, the category does have growth potential and can sustain more than one branded manufacturer.  Understanding their own production & distribution capabilities, the entry of Coca-Cola, Pepsi, and even Dr Pepper Snapple Group in Canada seems just like a matter of timing.  Currently on grocery store shelves, the MiO sits by itself with powdered drinks like Crystal Light, Kool-Aid, Nestea without any store brands.  It would appear  that at this time, even private labels are hesitant of coming into the market and are watching to see how the MiO will perform first before jumping into the category.

How about the MiO Energy, will it enter Canada?  It is an intriguing product because the user can personalize their beverage and control the amount of caffeine they would like in their drink.  However, with the increased attention on energy drinks, their high caffeine content, and their adverse effects, will this product be successful if launched in Canada?  My perception is that it will extend into Canada, but their success hinges on their market positioning. Positioning it as a customizable caffeine drink against coffee, rather than energy drinks may be more successful.  Coffee is generally more acceptable as a caffeinated beverage over energy drinks due to their lower caffeine concentration.

In the meantime, Canadians still have the regular Kraft MiO to enjoy in four flavors pending more introductions.  Enjoy the exclusivity while it last MiO, because it appears that you’ll have to defend your shelf space soon enough.