Is Jones Soda Rationalizing Their Products?

Where will the beverage industry be without Jones Soda, as a beverage and as a company?  It appears the company is in slight disarray given their most recent news in the headlines.  The most current headline stated that their stock was recently delisted from the NASDAQ stock market and was suspended from trading on the index since September 20.  Prior to that there was a corporate restructuring that replaced Bill Meissner with Jennifer Cue as CEO and commentary indicated that they will be heading in a different strategic direction.

This new strategic direction may have impacted their product portfolio as they continue to make changes to return to profitability.  There has been no mention of their seasonal limited edition soda flavors.  Jones Au Naturel – one of their previously heralded product launched – could not be found directly on their product website.  In order to find Jones Au Naturel, you would have to know the web address and type it in correctly, but I have included it here should you want to check out the still existing webpage (link here).  Their retired products page features more products than their current beverage portfolio (link here).  It seems like their new strategic direction is strictly streamlining their beverage offerings to their bread and butter: Jones Pure Cane Soda, Jones Zilch, and Whoopass Energy Drink.

Given their current company state, they may be streamlining their product portfolio to conserve their investment dollars until further notice.  While it does make sense to go back to your roots, the beverage landscape is constantly changing and being mainly involved in producing premium soda may not be enough to sustain the standalone company.  Their track record of product launches into other categories have not been successful (refer to their retired products page), which may prove why they  would want to stick to their core offerings.  However, they should continue to try and penetrate new beverage categories (or create new beverage categories) after some strong market segmentation and evaluations.

After all, who knew premium soda could be that tasty and entertaining without companies like Jones Soda Co and Pop Shoppe?  Their core offering of premium soda got them to where they are today, but they must continue innovating and launching new products in order to propel them into the future.

Just think, where will the beverage industry be without Jones Soda and their insistence on glass packaging to preserve the optimum soda taste?  We’ll be left with mainly plastic bottles and aluminum cans.  So while Jones Soda is rationalizing their product portfolio, I hope it’s only temporary and that they come out with some more exciting products.

Jones Soda Expands Their Product Portfolio

Jones Soda recently put out a press release detailing their upcoming entry into the sparkling waters segment, launching three flavors of sparkling water under a product line titled “Au Naturel”.  The press release in its entirety is available here, and BevReview.com covered some additional information talking about other products that Jones has previously launched and/or re-introduced:  Jones Naturals, Jones GABA, and Whoopass Energy Drink among others.  The link to BevReview’s piece can be found here.   Jones Soda’s press release also indicated that the product line will be stocked in natural grocery stores, which mean that stores like Whole Foods, Choices Food Market, and Urban Fare may have these products in stock soon.

This is an interesting launch for Jones, since the most of their previous beverage introductions have been in the premium soda and energy drink categories.  That is not to say that 24C, Jones Juice and Jones Naturals are not successful, but they have not been able to capture the same level of publicity and success that the other launches recorded.  The launch of Au Naturel marks an entry into another completely new category, one with a different set of competitors and challenges.  The launch still provides a level of similarity for Jones Soda since their most successful product launches share the following characteristics: premium and niche.  For example, Jones Soda itself using sugar cane for a variety of their 12oz glass bottle sodas and Jones GABA doesn’t include caffeine.  This gives Jones experience with bringing premium beverages to market – the category may be different but the experience and skillset should be transferrable from premium sodas to sparkling water.  Also of significance is that sparkling water gives them a shelf presence in a different area of the grocery store, or in another set of grocery stores altogether.  Au Naturel will be distributed in natural grocery stores at first, but may expand to regular grocery stores if there is enough traction.

On the challenges that Jones will face, they may be similar to the challenges that Jones Soda faced with launching their Juice, Naturals and Organics products.  These other categories all have a different of competitors, and much more store-brand (private label) competition.  Unlike sodas, the markets are less regulated and monopolized, making competition more likely.  The category itself is more commoditized, and telling consumers to trade-up to premium sparkling water is a significant problem.  Despite bottled water sales growing this past year, the category is currently challenged with educating consumers on the added benefits between tap water and bottled water.  With all these challenges, does Jones Soda’s expertise with featuring premium soda transfer over into featuring sparkling water?  Will Au Naturel be a short-lived offering, an experiment to see how another category may provide diversification for the company?

Even with all the challenges that the water category brings, I feel that this product launch has a stronger chance of success that some of Jones Soda’s other launches.  The key difference is that water itself is seen as wholesome and healthy, and the market trends shows consumers increasingly prefer healthier alternatives.  In order to compete with the more established sparkling water players, Jones may need to look to alternative channels to gain distribution and popularity.  One suggestion may be to look for opportunities in the on-premise channel such as salad & health food joints, and smoothie & yogurt shops.  By stocking their sparkling water in these establishments, Au Naturel aligns themselves with healthier alternatives that shoppers want.  Gaining traction in the alternative channels leverages on these shoppers to look for their products in the traditional grocery store and gain more shelf space.

Since consumers expect their food and beverage options to become increasingly health conscious, Au Naturel’s entry into sparkling waters is preemptive and a good chance to diversify their product offerings.  Should Au Naturel see strong sales in their current grocery stores, it is likely that their expansion into more locations would come quickly.  Cross-border expansion may also be a possibility at that time, and hopefully that means I’ll be able to find Au Naturel locally rather than having to make a trip down to the U.S. to find it!

Jones Soda Gets Social for Christmas – Possibly Testing Out New Permanent Flavors

Jones Soda regularly releases limited edition beverage flavors (ie. Christmas flavors, Thanksgiving flavors, etc) and this year is no exception.  The flavors for this year’s Christmas season are: Gingerbread, Pear Tree, Candy Cane and Sugar Plum.  More information can be found from marketwatch here, and BevReview.com has a photo here.  Since these links can give you more information on the product pricing and look, BevWire won’t repeat that information.  What is interesting to me is Jones Soda’s marketing aspect for the seasonal flavors.

Marketwatch explains that the company decided on the flavors through the use of social media, by having their fans and loyalists vote on some flavors and then manufactured the flavors that were the most popular.  The voting results can be see here on their website, where over 4000 votes were placed to determine the top 4 flavors for the 2011 Christmas holidays.  While I’m not too familiar with the annual custom flavors that Jones produces for Christmas, some of these flavors appear to have appeared in previous years.  Therefore the voters would likely vote for the flavors that they preferred the most from past years and re-live the glory of the Gingerbread, Pear Tree, Candy Cane and Sugar Plum flavors.  From the company’s perspective, a great low-cost way to generate excitement and buzz about the flavors, and also to ensure that its flavors that will sell out among the constituents since they voted for these flavors.  While some of these flavors are novelty flavors, others actually sound like they would taste good.  Some of these flavors may one day be added to their regular product line-up.

With the ability to vote and have their voices heard by Jones Soda, consumers may have the power to dictate whether some of these flavors will one day sit alongside the company’s most popular flavors of Green Apple, Cream Soda and Root Beer.  Not unlike any other business, Jones Soda is constantly looking for low cost opportunities to tap into what their customers like best about them and how they can better satisfy their needs.  By using social media to connect with their core audience and giving them a voice on which flavors they would most prefer to drink this winter, Jones minimizes the risk of having these flavors fail or sit in the storage room of some grocery store.  The ultimate dream may be to have a determined shopper going into a grocery store, not finding the product on the shelf and asking the store manager to bring the product into the store.  This ultimately helps the soda manufacturer get into more outlets and ensures that there is existing demand when they bring the product reaches the retail level.

All in all, a great way to first create excitement for the product before its even available.  Have the loyalists decide what will work best, then produce and sell the winning flavors for a limited time as a test run, and make them permanent if the sales surpass targets and can remain on store shelves without losing any other better selling Jones Soda flavors.  Normally an option to purchase Jones soda online for Canada, Jones Soda alerts shoppers that they will suspend customer-direct shipping since our winters may cause product freezing.  If these limited edition flavors were to be purchased, the shopper must go to an authorized retailer or will likely have to head south of the border.

While BevWire doesn’t have any plans to head down to the United States this winter, I’m hoping to find some of these limited edition flavors at my local grocery store, so keep an eye out on the twitter feed for some Jones Soda Gingerbread or Pear Tree pictures!

Jones Soda 16oz Cans: Good Idea or Bad Idea?

Jones Soda announced recently that they will be releasing their popular premium soda in 16oz (473ml) cans into the convenience channel.  The can packaging will follow closely with their Jones Soda glass bottles: photos submitted by consumers enclosed in a black and white box.  The 16oz cans will be available in three flavors by late October or early November: Green Apple, Berry Lemonade, and Strawberry Lime.  This product launch is unique for Jones and the overall soda category as most products are of the traditional 12oz (355ml) can variety.  Will other CSDs follow and release products en masse in this packaging size if Jones is successful?  Or will this package size fall short of sales targets that suggest it can be a permanently stocked product?

On one hand, this launch makes sense because Jones Soda is seeking out growth opportunities.  Since canned soft drinks are the preferred choice in the convenience channel and the company only produces bottles, Jones Soda would have to come up with a can version of their products in order to penetrate this channel.  However, their category position as a premium soda company somewhat dictates that they must sell their product in glass bottles.  Consumers have the notion that glass bottles preserve the taste and quality better.  If the manufacturer switches from glass bottles to aluminum cans, this is somewhat interpreted as “selling out” by sacrificing quality.  Sales have slowed down for companies that make that switch – just look at Nestea, Sobe and Lipton (among many other examples).

Adding another layer of curiosity is the can size itself.  Their choice of an unconventional size will generate attention and provide a stronger bang-for-the-buck (cost/value) relationship for the consumer.  But some other things to consider include calories and convenience store shelving capabilities.  Consumers are extremely calorie-conscious and often make the effort to read the label and portion control their servings, so when the 16oz can contains 30% more calories than a regular 12oz soft drink, they may be afraid to purchase a product of this size.  Also, most 16oz beverages are energy drinks so an uneducated shopper may confuse the product as an energy drink and not a soft drink. With retail shelf space, most convenience stores with refrigerated vaults  work with a set planogram that limits the space they have to put products – there are size limitations since a taller can will not fit into a pre-set shelf, and if the width is larger than a regular can the manufacturer must provide special racking.  The retailer may ultimately choose to sell the product warm since it cannot fit into their shelving units.

Jones Soda may believe there is a trend of consumer fragmentation, and as a result expand their offerings through package sizes.  Coca-Cola did recently released a new 12.5oz bottle as a result of product-price diversification to appeal to more consumers, so there may be some truth in that.  However, Pepsi had also recently launched their 12oz soft drinks in 16oz sizes as well (Pepsi-Cola, Diet Pepsi, and Dr Pepper were available, to the best of my knowledge) but they did not remain on shelves for long given their popularity.

If Jones Soda is ultimately successful in making this work, the other manufacturers will undoubtedly follow.  However, with the consumption patterns of consumers moving toward healthier alternatives, and limiting calories through portion-controlled serving sizes, these 16oz cans will face  a tough uphill battle.  Let’s just hope it does not follow in the footsteps of Sobe, or Nestea.

New Jones Holiday Soda Flavor: Bacon

Jones Soda Co. has decided to partner with J&D Foods to bring a bacon flavored soda to the market.  Mike Spear, Jones Soda Marketing Director says, “Bacon is like the eighth wonder of the world.  We spend a lot of time listening to our customers on social media sites, and we couldn’t help but take notice of the hundreds of thousands of people taking part in bacon discussion boards and fan groups right now. We felt it was our duty as leaders in the premium soda category to carbonate bacon’s salty goodness.”

Jones Soda releases seasonal flavors each year and have introduced flavors such as Turkey & Gravy, Tofurky & Gravy, Candy Cane,  Pear Tree, and Mele Kalikimaka in previous years.   To develop Bacon Soda, Jones Soda and J&D Foods assigned dedicated personnel to work on bottling the bacon flavor in a carbonated form.

I am fairly impressed at Jones Soda’s innovation and creativity.  Each year they come out with a crazy and attention-grabbing soda flavor.  Who would ever think about bottling bacon into a pop?  I mean, what’s next – Cajun Chicken Soda?  Not to mention Jones Soda pays a lot of attention to detail to the consumer experience.  With their limited edition packaging and consumer-submitted label photos, consumers always want to check out what’s on the Jones Soda bottle.  In addition, by keeping the beverage in a glass bottle, consumers can continue to trust on Jones providing quality and not trading off for lower costs with a plastic bottle.

The bacon soda can be purchased at their both parties’ online stores as part of a holiday pack.  For $10 plus shipping and handling, the holiday pack includes  two bottles of bacon soda, a bag of bacon & cheddar flavored popcorn, a J&D Bacon Lip Balm and a package of J&D’s Bacon Gravy.  Jones seasonal flavors are a little too foreign for my tastebuds, but if someone does pick up a case, please let me know how it tastes!

Customized Beverage Labels

Andrew Kaplan from Beverage World has written a nice piece about customizable beverage label packaging for bottles and cans.  I referenced the article as a piece to read about the week I was on vacation, but you can also click here to read the article again.  Kaplan states that companies now have the option of not only producing their branding copy and logos, but also producing customized labels by digital printing to attract consumers’ attention to the product.  Ball Packaging Europe, the same company that Monster Energy contracted to product the Monster Import resealable can, is already producing customized labels for some customers to market special edition beverages.  Kaplan also reports that 20% of all new installed printing machines have digital capabilities, which makes it economical to consider digital printing as an option since a beverage company now has many options to adjust their packaging on the fly.

Despite all the technological advances in packaging, why has North America been slow in adopting these innovations? On the manufacturing side, the machine cost is likely to be expensive and only when a current machine is breaking down will anyone consider the cost of replacing it.  Then numerous people needs to be convinced that they need digital printing with the new machine, and benefits are weighed against cost and even then manufacturers may decide to stick with the traditional printing machines.

On the consumer end, it would be great to use digital printing to provide consumers with customized and fresh packaging every time they walk down the aisle to purchase your product.  However, unless consumers understand that your beverage’s branding involves constantly changing packaging, the company will risk losing a customer because they can’t find your product at the point of sale.  The beverage company would miss out on numerous opportunities to continue advertising their product and getting your attention.  That’s why so far only companies have limited with this type of packaging to special edition beverages like collector’s items.

So far, the only success with a North American beverage company that has constantly changing packaging is Jones Soda, where they change their center image based on users submitting pictures.  Even then Jones only changes the picture itself and not the complete labeling. It’s not that customized labeling for beverages hasn’t been done before, it’s just uncommon.  Going forward, if beverage companies were to succeed using digital printing, they would need to involve the consumers and invite them to submit designs to print on the bottle or can.  North American consumers may not be ready for the changing packaging designs on the bottles just yet, but they have already been exposed to it through the Doritos’ Superbowl ads and new flavor chip bag designs, as well as Nestle’s Smartie Chocolates box designs.  It is only a matter of time before Coca-Cola, Pepsi or some other beverage company tries blank labeling and involves the consumer by running a contest similar to the chips and candy companies.