5 Questions with Nika Water’s Jordan Mellul

There are many companies that embrace driving social causes with their products, aiming to make the world a better place by donating a portion of their profits to for sustainability initiatives.  Nika Water is one such company that does this, and really tries to help as much and as quickly as possible with their social mandate.  Nika Water’s website details that the company donates 100% of their profits for clean water, education, and sanitation projects in developing nations.  BevWire was given an opportunity to interview Jordan Mellul, VP Operations for Nika Water – and through this interview you will see that their focus is really on improving sustainability and environmental causes.  Read about my insightful interview with Jordan below, ranging from Nika’s product positioning, to their marketing strategy, and their distribution strategy.

BevWire:  While Nika’s unique selling proposition is a social mandate to not only be carbon neutral, but also to donate profits to help solve environmental problems in developing countries, what makes Nika better than other products?

Jordan Mellul: To be honest, we try to keep it simple at Nika Water.  While our product is a reverse osmosis/UV light purified water, we really do want the focus to be on the brand and message that it carries.  Our aim is to reach the mass population and appeal to the widest demographic possible.  After all, Nika is set to donate our profits.  By specializing, and thus limiting, our consumers, we have less of a chance of creating larger funds to donate.  Compared to those that are benefiting from our efforts, we are humbled to even be able to discuss water choice in such detail.

Courtesy of Nika Water & Olive PR Solutions.

BW: Nika Water’s website mentions that part of your strategy is to leverage marketing partnerships and social media to raise awareness of these environmental causes.  As such, Nika Water has partnered with World Vision and Free the Children among other organizations.  What type of inventive marketing partnerships and social media activities has Nika Water implemented?

JM: Unlike most typical and traditional water companies, Nika has always set itself apart by how we promote and share our brand’s message.  We know that educating the consumer on what choosing Nika Water means is the primary goal.  By marketing in the way that young, energetic juice, tea, and energy drinks go about things, we are able to show that the water category has the opportunity to be relevant and cool as well.  By speaking face to face with people at street fairs, festivals, and other events, we can share our story directly.  We have partnered, not only with world-class NGOs to show how social entrepreneurialism is a new way to make global change, but also clothing, accessory, and lifestyle brands that help make a difference too.  Social media has been used at every level and intertwined into all of our efforts to create awareness.  By holding contests, promoting other like-minded groups, and keeping open, honest conversations active with supporters, Nika does what no other bottled water does to be in touch.

BW: In terms of product availability, the website mentions that Nika can be found in natural food stores, delis, cafes among other distribution channels.  Is there any particular retailers stores I can direct the readers to go if they would like to purchase Nika water?  Also, what is Nika’s plan for expansion into the traditional grocery/drug/mass retailers?

JM: Currently, we are focused on building our brand in the types of places that have an independent feel and are staples of their community.  With a cause-based product like ours, we seek quality accounts over simply quantity.  It’s the owners and customers in these locations that connect with Nika’s entire appeal.  It’s because of this, that it isn’t so easy to point people directly to where to find Nika, other than their “corner shops”.  We may have plans to do open opportunities with more traditional grocery/drug/mass retailers down the road, but not until we feel we can really compete on the level that it requires.

Nika Water VP of Operations – Jordan Mellul

BW: While Nika’s website has a “Shop Nika” section that allows for online purchasing, are there any plans for international expansion into Canadian retailers?  If so, when would this be?

JM: Nika’s sales goals are taken territory by territory.  Still in our infancy, it is important to stabilize each market that we venture into, before looking to expand.  Our goals include covering the major US cities before attempting to break into the Canadian scene.  However, with the support of one of our first and largest NGO partners, Free The Children, being based in Toronto and well-known across all the provinces, we’re confident that the support would be there almost immediately.  In regards to the merchandise that we peripherally sell however, Canadian followers of Nika are welcome to purchase that now and wear their support!

BW:  Last question, are there any plans for line extensions or product innovations?

JM:  While it has always been discussed internally, there are no plans being put into action at this moment.  We really want people to focus on what we do now, and build our business’ foundation, before becoming more creative and branching out.  Water is simply our vehicle at the moment.  It is the means to an end. If trends or experience dictated that another product would be more suitable to generate income for our NGO partners, we would definitely adapt accordingly.

 Thanks so much for your time Jordan, and thank you Olive PR Solutions for arranging this!

Starbucks Fixes Segment Blurring Problem

The three flavors of Starbucks Refreshers: Raspberry Pomegranate, Strawberry Lemonade, and Orange Melon. From blogs.starbucks.com.

Last July, Starbucks had a big media push when they launched their handcrafted Refreshers in their coffee locations with two flavors – Very Berry Hibiscus and Cool Lime.  These two flavors were also made available through their VIA line of at-home self-serve packages.  Most recently, they have followed up the handcrafted beverage offering launch by introducing three packaged sparkling beverages launch.  Joining the handcrafted and VIA Refreshers are: Raspberry Pomegranate, Strawberry Lemonade, and Orange Melon.  From their U.S. website, here is the product page for the Refreshers.  The launch of these packaged offerings created a problem for Starbucks and retailers alike: segment blurring.  Segment Blurring occurs when products within one segment encroaches on products from another segment.  Since the Refreshers are made with green coffee bean extract, should they belong in the coffee section?  Or does it belong in the energy drink section?

According to Kevin Reid – Director of Beverages – in an interview with Canadian Grocer these new beverages belong in its own section.  It appears that Starbucks anticipated the problem as a result of this beverage innovation.  By extracting the caffeinated energy content from coffee beans to make energy drinks, they understood that retailers would have difficulty fitting it into one section.  As such, the interview suggests that retailers create a specific area to group all the Starbucks products together in order to make it easier for the shopper to locate any Starbucks products.

A Starbucks branded supermarket endcap with the dark wood trim and faux-tile backsplash. From online.wsj.com.

Why should a retailer agree to a dedicated Starbucks section?  It turns out this makes sense in more ways than one.  Starbucks products are “destination” drivers in their own right given the coffee giant’s standalone retail locations.  Customers consciously choose to go to Starbucks coffee locations to purchase their Starbucks coffee.  Lending support to re-create this destination experience in grocery retailers is that customers expect to find all Starbucks products when they visit a Starbucks outlet.  Over the years, Starbucks has complimented their handcrafted beverages by stocking packaged coffee beans, beverage holders, and CDs in their branded stores.  Finally, Starbucks’ willingness to invest in décor for the grocer’s coffee aisle demonstrates their dedication to replicate the signature experience everywhere.  Starbucks understands that developing the Starbucks cafe experience requires a collaborative effort and has indicated they are willing to give the retailer Starbucks-type shelving.

Would the retailer be open to more Starbucks innovations in the future?  The Canadian Grocer interview reveals that retailers have been pleased with Starbucks sales.  And as long as Starbucks maintains its demonstrated collaborative efforts, retailers would certainly welcome more Starbucks products to help build grocery trips and baskets.

AQUAhydrate Grows Through Distribution and Celebrity Partnerships

Has anyone noticed the amount of press that AQUAhydrate has gotten recently?  After their rebranding effort in 2012, they have reached some significant milestones.  Most recently, they gained more national availability in the grocery channel with new distribution agreements at Safeway and Kroger’s.  They secured even more publicity after Mark Wahlberg and Sean “P. Diddy” Combs announced they were partnering with AQUAhydrate to help develop and execute the beverage brand’s business strategy.  What does all this mean for the brand and for Canadian consumers?  Will their continued success lead to stronger availability in Canada?  And how will celebrity partnerships help the beverage refreshment perform better?

Let’s answer the latter question first: will celebrity partnerships with Mark Wahlberg and Sean “P. Diddy” Combs help deliver stronger business performance?  It all starts with making the right choices; there must be mutual benefits beyond previous arrangements like the celebrity endorsement compensated financially.  When you are endorsing a beverage or any other product, you are mainly communicating the product or service benefits to the public.  There is no guarantee that you believe in its success or benefits – you are simply saying what you’ve been paid to say in order to make money.  However, what more and more companies realize that without any vested interest from the celebrity, it’s mainly a one-way transaction.  There is no passion for the refreshment beyond the financials.

Mark Wahlberg and Sean Comb speak to the media at the AQUAhydrate press conference. Courtesy of AQUAhydrate’s facebook page.

Through this realization, more companies are finding celebrities that truly believe in the product’s success.  Diet Coke found Jean-Paul Gaultier, Taylor Swift, and Marc Jacobs.  Pepsi found Beyonce.  Evian has been doing this for years, and has found a plethora of fashion designers willing to put their mark on collectible glass bottles each year.  All these celebrities are not just being paid to talk up their favorite beverage, rather they are involved with the business in some shape or form.  Beyonce is involved with Pepsi’s creative process and how the soda brand is represented to music fans worldwide.  In a similar sense, Wahlberg and Combs are expected to be involved with the business strategy component for AQUAhydrate.  They are expected to actively participate in helping get AQUAhydate into more grocery stores and more consumer shopping carts.  The fact that both celebrities chose to partner with AQUAhydrate, they must believe in the beverage’s business prospects and how they can add value.  Therefore, this business partnership should stand a very high chance of success.

To answer the former question on what this means to Canadian retailers and consumers, the new distribution arrangements should help.  Safeway is a grocery chain with an American presence as well as a Canadian presence, so the incremental distribution for AQUAhydrate could likely be the result of having the refreshment merchandised in Canadian Safeway grocery stores.  Some research and a quick question to the AQUAhydrate team revealed that the water beverage is indeed found in Safeway stores, as well as most Canadian GNC and Quebec Couche-Tard outlets.  Some readers have said that the beverage brand was also found in high-end grocery stores, so it can be expected that AQUAhydrate will continue to expand its Canadian presence.

Since its September rebranding effort, AQUAhydrate has rebounded and made some great strides forward.  With its expanded distribution and strong celebrity partnerships, there’s no doubt that the beverage brand is primed for even more success in the future.  With Walhberg and Combs on board to help with the business strategy, who knows what celebrity wants to sign on next with the brand to help propel it to new heights?

Kraft’s Dual Brand Strategy – Crystal Light Liquid

Courtesy of harpersbazaar.com

Most people by now have heard of Kraft launching Crystal Light Liquid to grow (or compete) in the liquid flavor enhancers marketplace.  Similar to some MiO offerings, Crystal Light Liquid is calorie free and sugar free.  It currently available the United States in 6 flavors: Strawberry Lemonade, Blueberry Raspberry, Iced Tea, Mango Passionfruit, Peach Bellini and Pomtini.  Their facebook page mentions that it may arrive in Canada sometime in March, but there is no guarantee all 6 flavors will make its way north.  It comes in a squeeze bottle that should satisfy 24 servings (of 250ml liquid), similar to the Kraft MiO squeeze bottles.  Although the product is predominantly targeted toward women – the packaging, colors, and communication portray as much – will this not end up cannibalizing their MiO product?  Or will this launch not cannibalize Crystal Light’s powder-based products?  Why introduce such a product when all signs point toward it being harmful to Crystal Light, and possibly Kraft overall?

Contrary to the traditional thinking of market cannibalization, launching Crystal Light Liquid  is beneficial for everyone – especially Kraft.  Back in September, BevWire wrote about Dasani Drops’ entry into this segment and how its presence helps in growing liquid flavor enhancers.  The Crystal Light Liquid will further bolster this growth and solidify the promise that exists for these products.  And since not all consumers are aware that MiO and Crystal Light are under the same parent company, this will help increase both product’s market penetration.  What appears to be three separate branded players in this space, is actually two manufacturers.  And as the market potential grows from $100 million, Kraft’s size of this market potential will grow as well behind the support of these two branded players.  This dual brand strategy of Kraft may be their response toward Dasani’s entry and a signal to others interested in saturating the segment.  It shows that Kraft is committed to defending their product and shelf space, and maintaining healthy margins for the retailer and themselves.  Crystal Light Liquid’s entry will also make it easier to get the retailer’s attention and gain shelf space, since it signals the manufacturer’s seriousness in supporting this segment and legitimizes it as an important focus.

This gain in shelf space may appear to be detrimental for Crystal Light since it could come at the expense of their powder-based offerings.  After all, both powder and liquid form products fall under the same category of “flavor enhancers” and are shelved in the aisle of grocery or mass supermarkets.  However, one must also consider that the Crystal Light Liquid offerings are potentially more profitable for both the retailer and Kraft.  While they may be trading shelf space away from powder-based products, the trade-off could potentially increase both parties’ “profit-per-square-feet”.  That is, consumers may ultimately be paying more for Kraft MiO and Crystal Light Liquid than Crystal Light powder.  Think of how the MiO Energy is priced identical to the MiO flavors but comes in a “down-counted” 18 servings instead of the 24 serving sizes.  The cost-per-serving indicates that the MiO Energy is actually a more expensive product than the regular MiO.  So while the drinking occasions have not increased with Crystal Light Liquid, the limited serving sizes increases the need to re-purchase the flavor enhancers.  This ultimately translates into wins for Crystal Light, Kraft, and the grocery store.

On the issue of cannibalization, Crystal Light Liquid is ultimately targeting a different consumer.  The company’s views may be that the two products are not cannibalistic but complimentary instead.   Crystal Light Liquid messaging and imagery concentrates on women’s lifestyle and social circles, while Kraft MiO’s messaging highlights individuality and customization.  MiO’s messaging is “Your Drink. Your Way” while Crystal Light Liquid centers around “For Every Shade of You”.  The female shopper that buys MiO may also buy Crystal Light Liquid, but for someone else (ie her friend, mom, etc).

From the Crystal Light facebook page
L: Crystal Light Liquid Peach Bellini highlighting a lifestyle.
R: The subtle hint toward customization with the different colored glasses, but the more apparent communication at the bottle “For Every Share of You” to again emphasize lifestyle and sociality.

The Crystal Light Liquid launch is certainly a positive news as it shows everyone’s commitment to supporting liquid flavor enhancers.  While Kraft wins with two brands and Dasani competes with Dasani Drops, both the retailer and consumer will benefit from aggressive promotions.  A win-win-win situation.

7-Eleven and Red Bull’s Christmas Partnership

Earlier in 2012, Red Bull revealed that they would be launching three new energy drink flavors in March 2013: Cranberry, Lime and Blueberry (BevW’ire’s analysis on why these new flavors will be successful can be found here).  While those attending the NACS show in October were able to sample the  new flavors during the announcement, others have not been so lucky and would have to wait until March.  Fortunately, 7-Eleven and the energy drink manufacturer partnered to participate in an exclusive holiday program where the three new flavors (named the “Editions”) would be available nationwide in the U.S. convenience chain during Christmas.  Will this action set a precedent  where Red Bull launches their beverages in certain retailers exclusively for a short time period before releasing it to all grocery, convenience and merchandising retailers?

Based on 7-Eleven’s execution to support this exclusive arrangement  it looks like the collaborative effort has been beneficial for both partners.  7-Eleven not only provided the typical cooler barrel, cooler clings, shelf danglers, but also supported the launch with outdoor banners, social media activity, and free coffee promo offers.  With the strong support levels 7-Eleven provided, it would not be surprising to see Red Bull take part in exclusive arrangements again with 7-Eleven.  After all, 7-Eleven is the largest U.S. distributor for the energy drink, and the caffeinated beverage is one of the retailer’s top moving products.  This arrangement may not happen as easily with other retailers, since they would not have the same reach despite it being a fast moving product.  However, the answer may ultimately depend on whether both parties can benefit from this exclusive arrangement, and whether the energy drink was supported to the same extent.  It may stand a stronger chance being a convenience or petroleum-bar retailer than grocery customers since beverages are a larger part of their daily business.

Can this type of exclusive partnership happen in Canada?  While exclusive beverages are not uncommon, the number of retailers in Canada are much smaller than in the U.S.  The American retail system is much more fragmented than the Canadian retail landscape.  This means that foregoing business with one retailer would be more detrimental to the manufacturer in Canada than in the U.S.

As retailers and manufacturers continue to partner up in efforts to attract consumers to their locations, the probability of finding products offered exclusively can be quite high in the U.S., but not just yet in Canada.  Of course, if the same level of support was provided, there can be exceptions in the U.S. as well as Canada.

Icelandic Glacial Delivered To Your Home, With The Daily News

BevWire recently read about Icelandic Glacial’s expanded distribution network: a home delivery partnership with the LA Times and Sun Sentinel to deliver water along with their newspapers.  It’s an interesting partnership to say the least – piggyback on the news delivery trucks and save on carbon footprint.  However, with actual hard copy readership on the decline and digital editions on the rise, is this a sustainable business model?  There’s also a variety of other questions, like responsibility for product breakage or damage en route for delivery.  Or how about how payment is collected? And what about whether the delivery trucks will need to be re-fitted to store the beverages on the delivery trucks?

Having reached out to Icelandic Glacial’s PR team, their forwarded press release provided some details into this business arrangement.  Icelandic Glacial will be utilizing the current newspaper delivery infrastructure, making use of truck space and delivery routes.  This means that any customers receiving their news through these newspaper delivery trucks will have the opportunity to purchase the bottled water as well.  Icelandic Glacial will also leverage on the newsprint media company’s customer service system, indicating that payment may go directly to LA Times or Sun Sentinel first and then remitted to Icelandic Glacial.  Given that the payment and delivery trucks are borrowed assets for Icelandic Glacial, it would appear that any damaged product during delivery may be under the LA Times or Sun Sentinel’s responsibility.  At the end of the day, this will still come back to Icelandic Glacial –  it just means that they will be reimbursing the damaged product that the newspaper company may have to pay to the end consumer.

In spite of where responsibilities rest – beverage company or newsprint organization – the main question still remains whether this business model is good idea and sustainable.  Given that readership is on the decline, this should be seen as a win-win for both parties as perception shows they are looking for ways to reduce their carbon footprint.  For Icelandic Glacial, this opens up additional distribution and translates to a larger customer base.  Being able to promote your product through a trusted media source is helpful as well.  For LA Times and Sun Sentinel, this is an opportunity to offer hard copy readers an incremental benefit as well as open up a new revenue stream.  Fewer readers translates to more delivery truck space, which can now be filled to deliver bottled water along with the news.  And from the reader’s perspective, getting newspaper along with a refreshing bottle of water is  just added convenience.

This is a good idea but may also represent a short to medium term solution for LA Times and Sun Sentinel.  Consumers can already get their news online or on their phones, so delivery trucks will eventually have more room for bottled water or other products aside from newspapers.  The longer term solution may require transforming the entire business model to focus on the “distribution” aspect, leverage the customer base and provide a wider assortment of products to the end consumer.  Beyond newspaper and bottled water, other alternatives may include coffee, fruit, and grocery items.

Time will tell but it’s likely that this is the start of many partnerships for newspaper companies to stay relevant and remain profitable.