Hi Everyone,
Thanks for following BevWire on WordPress for the past six years. I’ve decidedly to buy out the BevWire.com domain and moved content starting 2015 over to the new site. Go check out my new site for weekly updates!
Thanks!
Jason
Gatorade Turns 50 in 2015
It’s been 50 years since Gatorade was created by a team of University of Florida scientists to help the Gators football team stay hydrated. Since then, the sports drink giant has created a beverage category that helps athletes replenish lost electrolytes. The brand kicked off its half-century birthday celebrations with a commercial titled “50” that highlights memorable moments in its history. While I’m not familiar with most of the memorable moments, the folks over at Slate have captured these 50 Gatorade memorable moments (link here). The commercial highlights some athletes multiple times, as it would appear that some athletes have been critical to Gatorade’s place in history. Will the brand embrace more retro ads this year? It seems they have already done so. Check out the Gatorade “50” commercial below:
After releasing this ad to close off 2014, Gatorade also went retro with another one of their more recent advertisements. They have gone back to one of the brand’s most popular athletes to help commemorate their birthday. Near mid-February, Gatorade released a remastered version of their “Be Like Mike” Micheal Jordan commercial. Jordan was one of the company’s first athlete spokespersons, and serves as a symbol of their longstanding partnership with the NBA. See the new (old) commercial below:
This isn’t the first time that Gatorade has gone back to Micheal Jordan or retro advertisements to tout the brand’s place in sports. Consumers certainly still connect with Micheal Jordan as one of basketball’s greatest athletes, and the athlete himself can be seen with Gatorade products frequently through his successful NBA career. Putting a second focus on something that has worked well in the past is also nothing new in the advertising world. Brands go back to defining moments to stir up nostalgia in hopes of recreating the magic.
This would make sense for Gatorade since the hydration segment has become fragmented in the years since its inception. Next to Powerade are energy drinks, coconut water, flavored water, and a host of other alternatives. Consumers have more beverage choices now when it comes to hydration and recovery. Gatorade’s competition is stronger than ever, and it would serve the brand well to remind consumers of why it mattered to them in the first place. And to help remind them, Gatorade is also bringing back Citrus Cooler, one of its discontinued but more popular drink flavors. Further cementing the retro theme, Citrus Cooler will return in old Gatorade bottles and labels.
Gatorade has accumulated a rich history over the past 50 years and has developed a dominant market position relative to its main competitor. Bringing back a sports icon to commemorate a birthday is one thing and a great first step. For their next act, Gatorade must search out new moments to relate to today’s athletes and consumers.
How Fuze Became a Billion Dollar Brand
Per Coca-Cola’s news release a couple weeks back, the soda giant’s Fuze brand has joined the company’s billion dollar club this year (story here). Fuze expanded into teas back in 2012 and surpassed one billion dollars in annual sales just two years later, which may make it one of the fastest brands under Coca-Cola’s stewardship to achieve this milestone. Regardless of their geographical footprint (40 markets and growing) or product assortment (30+ Fuze skus between juice, tea, and liquid enhancer flavors), reaching one billion dollars this quickly is surprising. A key question to answer may be what happened in the past two years to help Fuze become one Coca-Cola’s roster of 20 billion dollar brands.
In 2007, Coca-Cola bought Fuze and promptly brought the juice brand into their beverage roster. At that time, Fuze existed as a primary competitor to SoBe’s line of fruit juices owned by Pepsi. The importance of tea in the brand’s portfolio emerged in 2009 when Fuze tea was part of the fountain drink options in Subway’s sandwich franchise restaurants. Since then, the hydration brand has emphasized tea more than juices. Securing distribution in Subway was a critical step toward Fuze’s current status. Not only were they earning sales across Subway locations, their availability increased consumer exposure to Fuze as a ready-to-drink tea and a viable alternative to Coca-Cola’s soda offerings. Even Samir Bhutada, Coke’s global director of tea and ready-to-drink coffee, mentioned that part of Fuze’s popularity was related to beverage trends around the ready-to-drink tea category because it delivers on great testing refreshment and natural goodness.
Another important step in Fuze’s history came in 2012, when Coca-Cola and Nestle Waters amended their Beverage Partners Worldwide distribution arrangement. Save for Canada and a few other geographies, Nestle Waters would retain distribution rights for Nestea. This in turn allowed Coca-Cola to redeploy efforts to their own stable of healthy refreshments. Gold Peak and Fuze became the main benefactors of the company’s increased support. This support materialized in both marketing and trade support. With Nestea returning to Nestle Waters’ distribution network, this opened up more space for other beverages to grow their footprint within Coca-Cola’s distribution network. As a result of this, Fuze cultivated a stronger international presence.
The Coca-Cola system also support the brand by cranking out drink flavors built on its foundation of green tea and black tea. With over 30 Fuze tea variants, consumers looking for tea options would not have any trouble picking a tea under the Fuze portfolio. Most recently, Coca-Cola has extended the Fuze brand beyond bottled juices and teas. Coca-Cola launched Fuze Tea Drops in the Canadian marketplace, building more momentum behind this brand with three flavors of liquid enhancers. To support this rollout, the company activated Fuze Tea Drops with in-store signage and branded merchandising racks across participating Canadian retailers. It’s also telling that Fuze was one of the select brands among Coca-Cola’s liquid enhancer portfolio, joining Dasani, Powerade, and Minute Maid as beverages available in this format.
In Canada, Nestea is still being distributed by Coca-Cola so Fuze tea may be limited in its availability. Most Canadians only experience Fuze as a bottled juice unless they choose the brand where Coca-Cola Freestyle machines are available or purchase Subway sandwiches. With Fuze tea drops, Canadians are one step closer toward experiencing Fuze the way other consumers get to enjoy it. If Fuze tea drops sell well and Freestyle machines back up the brand’s popularity, there may be finally be Fuze tea coming to Canada. At that time, Canadians will join other countries that further contribute to Fuze’s annual sales of a billion dollars.
Sparkling ICE Comes to Canada
Two West Coast companies are joining forces to introduce Sparkling ICE to Canadians. Sun Rype, a Kelowna-based manufacturer and distributor of beverages and snacks, will become Sparkling ICE’s exclusive Canadian distributor. Through Sun Rype’s network, the Washington-based flavored water brand gains access to Canadian grocery, drug, and convenience channels. Both organizations have described this arrangement as a strong strategic fit that makes sense for their respective companies.
Kevin Klock, CEO of Talking Rain Beverage Co., parent company for Sparkling ICE says:
“Canada is a critical first step in our strategic plan to make Sparkling ICE an international brand, and we are thrilled to find a partner like SunRype who aligns seamlessly with our brand message and goals. We are confident that Sparkling ICE’s brand proposition of bold flavors and zero calories, combined with a best-in-class distribution partner like SunRype, will spell success in Canada.”
Dave McAnerney, CEO of Sun-Rype Products Ltd. explains why this will become a successful joint venture:
“In the highly competitive Canadian beverage market, we are seeing a real trend toward zero calorie, lightly carbonated beverages.”
After securing a strong position in the domestic U.S market, expanding into Canada marks a logical next step in Sparkling ICE’s evolution. With so many similarities between the two countries, making Sparkling ICE available in Canada certainly solidifies their North American presence. Another question that may have to be decided is whether the brand makes its entire product line available in Canada. Beyond 11 flavored of zero-calorie water, the brand also offers 6 lemonade options and 3 iced tea options. As Klock suggests, this would only be the first step toward building up Sparkling ICE as an international success. In order to make Canada a true success they should make all products available. Let consumers vote with their wallets and decide what flavor and product they prefer. Like many other markets, Canadians would prefer zero-calorie beverage options so long as taste and value are not marginalized. If Sparkling ICE is truly success in Canada, it gives the company a successful launch case study to implement across other markets.
For Sun Rype, distributing Sparkling ICE makes perfect sense. The Kelowna-based company is well-respected and already brings healthy beverages and snacks to Canadian retailers. Their product assortment gives them experience in dealing with retailers across multiple healthy food & beverages categories, from juices to portable snacks. Having another healthy refreshment in their portfolio to offer retailers doesn’t hurt, especially one that has phenomenal year-over-year sales results to support it. Sparkling ICE is a brand that has won recognition as a best new product, and has seen substantial sales growth in the U.S. the past few years. Selling it to retailers should be less challenging than selling other products that have less awareness or public recognition.
It’ll be interesting to see what Sun Rype and Talking Rain do to bring Sparkling ICE to Canadian retailers and consumers alike. Success for the zero-calorie flavored water brand in Canada may not be a question of “if” but a matter of “when.” Their future success hinges on the support that both organizations provide. With both organizations suggesting the arrangement to provide strategic benefits, you can bet that Talking Rain and Sun Rype will be paying alot of attention to ensure Sparkling ICE wins in Canada.
Is Mountain Dew Kickstart Taking on Gatorade?
Following on one of their most successful drink launches in recent memory, Mountain Dew has added two additional offerings under their Kickstart drink portfolio. The Kickstart offshoot started to segment drinks by dayparts in 2013 and brought out two beverages targeting morning consumption. In 2014 they followed on the morning drinks with two more flavors catered toward evening occasions. Their most recent offerings – Pineapple Orange Mango and Strawberry Kiwi – are infused with coconut water (full press release found here), but does not overtly fit an actual drinking occasion. This makes the latest launch appear off strategy because it’s not geared specifically toward the morning, afternoon, or evening. How do these two drinks fit into the Kickstart portfolio? What is the purpose of this launch?
The “fit” debate may very well go back to the purpose of coconut water. Coconut water was targeted as a healthier alternative to sports drinks like Gatorade and Powerade. On an equivalized volume comparison, coconut water contains similar amounts of electrolytes but fewer calories and sodium, making it a strong substitute for the sports drinks marketed toward fitness-oriented consumers. In essence standalone coconut water is meant for hydration and recovery purposes. When mixed with Mountain Dew’s caffeinated citrus sodas, these drinks could be positioned as competition to sports drinks. A lightly carbonated energy drinks – with juice flavors and coconut water – can be termed as a hydration drink to compete with the Gatorades and Powerades out there. These latest release of Mountain Dew Kickstart would not need to fit under a daypart segmentation. It could be a morning drink for people that exercise in the morning, or it could also serve an evening recovery drink after workout or recreational sports.
If this is Mountain Dew Kickstart’s positioning around the new offerings, the only challenge would be where caffeine fits into the equation. Sports drinks are supposed to replenish what the body loses during sport events (electrolytes, sugars, salts, liquids) and caffeine would not fall under this criteria. While the body may craves some energy following an intense workout, it could be debated that the workout itself provides energy as a result of the activities. Caffeinated sports drinks may not be detrimental like alcoholic energy drinks but it’s relevance is questionable due to the caffeine. This may ultimately be an attempt to expand the Mountain Dew masterbrand beyond soda and energy drinks by reaching toward athletic consumers.
Or is it?
This brings us to the purpose of launching these two flavors of Mountain Dew Kickstart. Bevnet’s Neil Martinez-Belkin suggested this launch had more to do with creating success for O.N.E coconut water brand than extending Mountain Dew’s reach (article link here). Martinez-Belkin reminds us that months ago PepsiCo expressed intentions to include coconut water as an ingredient across multiple lines of business. Driving Kickstart infused with coconut water is simply a method of increasing coconut water;s public exposure. It may be because after buying O.N.E. coconut water that the beverage brand is still lacking robust market exposure. This make senses given both Coca-Cola and Pepsi – owners of ZICO and O.N.E – have re-deployed efforts to focus on their core business: carbonated soda. Marrying a powerhouse brand like Mountain Dew with coconut water increases coconut water’s consumer relevance without having to fully invest behind coconut water as a beverage brand. This is not to say that Pepsi may not be supporting O.N.E. coconut water in the future, it just means they are looking for creative options to build up the coconut water segment.
The Mountain Dew Kickstart launch raises a few eyebrows though it helps coconut water more than it appears in the public eye. For a global beverage manufacturer where many products fighting to keep their budgets, this is a creative way to grow a business that may be losing the fight to maintain funding against other beverages in Pepsi’s portfolio. O.N.E. coconut water would justify increased budgets if these two new Kickstart flavors sold well. And if this experiment is a hit between Mountain Dew and coconut water, we could see Tropicana infused with coconut water or even Pepsi cola infused with coconut water in a few years. If that does happen, you can point to the success of Mountain Dew, which has been one of Pepsi’s increasingly consumed soda brands despite the overall declines in soda.
5-hour Energy Improves Shot’s Taste
Taste exists as the primary and most crucial hurdle for consumables to overcome. Even with marketing support, no product could sustain success if they produced really bad-testing drinks. 5-hour Energy kicks off 2015 by announcing that they’ve improved on the taste profiles for their entire line of energy shots (link here).
If 5-hour Energy has been able to find sustained success the past 10 years, their products could not have tasted that bad. This is merely a product tweak, though an important change since it affects their total energy shot portfolio. After improving flavor profiles, 5-hour Energy will be a better position to leverage their insights around demographics (targeting women & seniors) and frequencies (usage occasions and mixing opportunities). That said, no one can equally focus on three different priorities. So what should the energy shot provider do first: grow their customer base by targeting women & seniors, or increase consumption among their current customers?
Related post: 5-hour Energy’s Quest for New Growth
It seems like the answer was part of the statement by their director of communications, Melissa Skabich. Here’s a partial statement from her:
“The message is clear. Our customers want an energy shot that tastes great, and we’ve given them what they’ve asked for,” said Melissa Skabich, director of communications for 5-hour Energy. “The new and improved taste of 5-hour Energy shots is a testament to our ongoing commitment to always improving our product, and we’re extremely proud of what we’ve created. Fans of 5-hour Energy shots won’t be disappointed because we still offer the same 10 great flavors, as well as decaf,” Skabich added. “We’re optimistic that the better-tasting product will result in increased demand through the existing and new user base.”
Even as Skabich mentions existing user base, it would be clear that this is more about growing the new user base. After all, there is only so many energy shots a single consumer can drink. There is stronger growth potential for 5-hour Energy by targeting new demographics. In fact, changing the taste is positioning them to reach new consumers more than satisfy brand loyalists. Current customers will be rewarded with better tasting shots, but the priority is to attract new users.
Marketing to new users could prove more difficult than increasing consumption from their loyal customers, though the payoff will undoubtedly be more rewarding. Following their Yummification campaign, 5-hour Energy already understands when people use their shots and what tastes delicious when mixed with it. Leveraging these insights, they can target women & seniors through advertising or in-store coupons or bundled products.
5-hour Energy says they will be launching a new national advertising campaign in February to market the energy shots’ new and improved taste. Be on the lookout for what would appeal to women and seniors, as it’s likely that the campaign may cater to them just as much as it caters to their current customer base.
Help Jones Soda Make A Commercial
Each year more companies try to jump on the bandwagon with Super Bowl advertisements. The challenge is that not all companies can afford to purchase a time slot for the Super Bowl, which projected to cost $4 million for 30 seconds of air time in 2014. Coupled with production costs for these commercials, it’s clear that only the biggest names in the industry can afford these price tags. To get around these extravagant prices, companies create an event that helps them enter the Super Bowl conversation without actually being part of the event’s roster of TV commercials. This year, Jones Soda aims to do just that with their commercial contest. Given that Jones Soda only plans to release their commercial on their website during Super Bowl halftime, how can they generate enough attention to make this truly worth it for them? Beyond the problem of creating enough awareness for this ad, the heart of the issue is whether this is even a good idea for the premium craft soda brewery.
Discussing the problem first, Jones Soda must explore more methods to raise awareness than a website commercial during Super Bowl halftime. Viewers are used to looking at multiple screens during the game but the most expensive Super Bowl TV commercials are during halftime. Most eyeballs focus on the TV screen during halftime and not on phones, tablets, or laptops. Migrating people to a second screen for their commercial will be a challenge unless they have a TV presence to funnel viewers online. Since the original challenge is the cost of getting on television, Jones Soda must ramp up their social media engagement to circumvent this problem. At the time of writing their current Twitter handle (@jonessodaco) didn’t show that many tweets about making a commercial.
To create more attention for the crowdsourced commercial, Jones Soda should release a subset of their preferred commercials before the game. They should ask their Facebook fans or Twitter followers to vote for the best among the five and publish the tally to create more awareness and competition. Leveraging the commercial’s creators to ask for votes will help Jones Soda get the word out to a broader audience. This increases everyone’s attention for Jones Soda, and earns them more free publicity. For a company that asks the public to send in photos for their soda bottles, this tactic would be right in line with generating strong levels of engagement.
Regardless of how much attention Jones Soda could generate for their Super Bowl commercial, is this even a good idea? It would be – but only if Jones Soda is in a position to react quickly based on Super Bowl events. Companies that benefit are those that react the fastest based on Super Bowl events. Coca-Cola had created two versions of their polar bear ads and would air only version depending on the winner of the Super Bowl. SodaStream benefited from releasing a banned version of their ad online while also releasing a toned version for the Super Bowl. Oreo, Tide, Audi, and a host of companies capitalized on the Super Bowl blackout that occurred back in 2013.
Simply releasing a commercial on their website without seeding strong engagement beforehand is a miss. Jones Soda differentiates itself as a consumer-oriented company with people submitting pictures for their soda labels. Releasing a Super Bowl commercial should be the same thing. Asking consumers to submit videos is good, and having them create awareness of these videos for you is even better. With Super Bowl days away, Jones Soda can still make some changes to make this event work harder for them. To win big, Jones Soda needs to be proactive right now, and quick to react on February 1st just like Oreo did back in 2013.
[tweet https://twitter.com/Oreo/status/298246571718483968 ]
Red Bull Expands Editions Line-Up
It seems that Red Bull has found more success introducing energy drinks than energy shots or cola, as their recent launches like the Red Bull Total Zero and the three Editions flavors have fared much better. So it should come as no surprise that the energy drink behemoth continues building sales momentum behind their energy drink assortment. At the 2014 National Association of Convenience Stores (NACS) show, Red Bull announced three new members to the Editions family. Joining the Red (Cranberry) and Blue (Blueberry) Editions are the Yellow (Tropical Citrus), Orange (Orange), and Cherry (Cherry) energy drink flavors. The Orange & Cherry options contain zero calories and zero sugars, while the Yellow option returns with nationwide availability after a two month test exclusively with 7-Eleven. These new flavors will be available starting mid-February in 355ml (12oz) cans, while the 250ml (8oz) cans will transition to a multi-pack sku.
Among the three new flavors, Cherry may be the only true new addition to Red Bull’s portfolio. The Yellow flavor was brought to market during the 2014 summer months, exclusively with 7-Eleven. It was known as the Summer Edition to temporarily complement their Red, Blue, and Silver drink line-up from July to September. Meanwhile, the Orange flavor may have previously existed in limited U.S. markets under the name of BULL Energy. BULL Energy had different packaging, with limited references to Red Bull, and was available exclusively across soccer venues (as an exclusive product for the New York Red Bulls, the city’s soccer team).
Related Post: Red Bull Celebrates Summer with New Flavor
Regardless of the flavors being truly new innovations or otherwise, this marks an accelerated pace of product introductions for Red Bull than previously recorded. Before 2012 (year of Red Bull Total Zero launch), it was back in 2009 when Red Bull added to their product line-up, with an unsuccessful expansion into energy shots. Since the 2012 launch of Total Zero, three new items were added in 2013 (Red Bull Editions) and now three more in early 2015. Although their pace doesn’t match that of Monster Energy or Rockstar Energy (which launches multiple new products annually), Red Bull’s more recent product expansion activities indicates their commitment to giving brand loyalists more choices. And this ultimately lets consumers reward Red Bull with more dollars.
With these new introductions, it appears that Red Bull may not be done with their product expansion. The Orange and Cherry flavors are decidedly different from the Red, Blue, and Yellow items, containing zero calories and zero sugar. In essence, these two skus align closer with Red Bull Total Zero. In which case, Red Bull may explore opportunities to build out their “Zero” product line-up. Would the energy drink manufacturer launch both the Red and Blue flavors under the Zero portfolio? Also mentioned in the press release was the Editions will be available in single servings (355ml/12oz sizes) and multipack servings (4-packs of 250mls/8oz). Would Red Bull consider up-sizing some items even more, to join the original Red Bull Energy Drink in a 473ml (16oz) size? Even yet another option would be exploring additional flavors to bring to market. Beyond the current flavors, would Red Bull add to the Editions line-up with a Pink (lemonade), Peach (peach), or Purple (grape)?
Related Post: Red Bull Launches New Product: BULL Energy Drink
Incremental offerings for the Editions line-up certainly presents Red Bull with opportunities and risk. It’s worth noting that Red Bull has quietly swept the Silver (Lime) edition under the rug. It’s not clear whether Silver is being discontinued, but keeping the current Red Bull flavor portfolio at five flavors is a sound decision. As long as energy drink consumers enjoy Red Bull’s new products, the energy drink company will continue to deliver popular innovations. Today, the Red Bull company looks very different from the one back in 2009. After a period of failed experimentation, a string of successful innovations has helped Red Bull take back control of the energy drink market.
Pepsi Next Changes Its Packaging
Pepsi Canada ushered in 2015 with a packaging change to Pepsi Next. Previously packaged in light blue, the product packaging transitions to green and harmonizes with the Pepsi True product packaging in the U.S. This change is logical since Pepsi True (in the U.S.) and Pepsi Next (everywhere except the U.S.) are formulated the same way: both versions are sweetened with stevia and contain fewer sugar and calories. While this packaging change harmonizes Pepsi’s cola representation in many markets, two questions remain. The first being what should Pepsi do to simplify their cola portfolio in the U.S., should they discontinue Pepsi Next so consumers are not confused with the many versions of Pepsi available? The second question is whether more harmonization is on the horizon, where Pepsi keeps only one brand name (Next or True) across all marketing areas?
Related Post: U.S. Cola War Continues with Pepsi True Launch
Pepsi Next was launched to much fanfare in the U.S. and kickstarted with a Super Bowl commercial featuring Beyonce. Despite the amount of marketing support and retail space Pepsi dedicated to this launch, sales of Pepsi Next has not set the world on fire. Many consumers still find the aftertaste hard to stomach as a result of the artificial sweeteners. It would make sense to discontinue Pepsi Next since its performance fell short of expectations. While discontinuing Pepsi Next helps Pepsi True secure retail shelf space, this will be a tough decision for Pepsi. The mid-calorie soda launched in 2012 – roughly on the market for two years – and rationalizing the drink so quickly after its launch could damage Pepsi’s reputation for flawless product launches and create trust issues within their customer relationship. Since Pepsi True was introduced in 2014, discontinuing this product would undoubtedly create trust issues and severely damage Pepsi’s reputation in the marketplace. Regardless of difficulty, it’s important that Pepsi simplifies the U.S. cola portfolio. Rationalizing Pepsi Next would be easier than Pepsi True.
Related Post: Pepsi Next May Find More Success in Canada (Than The U.S.)
Pepsi would also have to address the product name of Next or True if it wants to achieve the greatest marketing scale and build the strongest brand equity. If cost was the sole consideration, keeping the Pepsi Next brand name is least costly since Pepsi True is only available in the U.S., whereas Pepsi Next is sold and recognized across the Americas, Europe, and Australia. However, the marketing perspective suggests that it would be make more strategic sense to keep the stronger brand name, and the name that translates best across multiple geographies. It’s possible that Pepsi keeps both names, as some products are branded with a different name in international markets. For example, North American brands Bounty (paper towel) and Becel (margarine) are recognized internationally as Plenty and Flora, respectively. It would just cost more to Pepsi as they market the product across closely tied geographies, like Canada and the U.S.
Changing the Pepsi Next packaging in Canada to match the U.S. Pepsi True packaging is a good first step toward reducing confusion, but the work isn’t done for Pepsi. Consumers should be on the lookout for some more changes to Pepsi Next (or Pepsi True if you’re in the U.S.) in the coming months.
Holiday Break
Happy Holidays everyone! BevWire posting will return in 2015. For now, I’ll be spending some time with the family and checking out some drinks on my travels. Keep up to date via Twitter – thanks!
BevWire 