Happy Planet introduces juice shots

A comment posted by Christine Leonard on BevWire’s Happy Planet entry highlights that Happy Planet has recently launched some all-natural juice beverage shots.  Although, it may seem like a case where they are looking for free publicity – all other web sources show Christine Leonard’s contact information so it is likely she works for Happly Planet and is providing some buzz marketing while the product is being introduced to the market.  In any case, this is an intriguing innovation and a post has been written about these Happy Planet juice shots, providing a quick analysis of the launch.  Please continue reading…

There are 4 types of juice shots:

  • Energy – main ingredients includes Ginko Biloba and Cha de Bugre to help the user main an energy high.
  • Immunity – main ingredients includes Fucodian, Echinacea, Zinc, and Vitamin C to protect the user from common sicknesses such as colds and flus.
  • Detox – main ingredients includes Burdock, Milk Thistle, Ginger, Sodium, and Potassium which helps cleanse and protect the body from harmful toxins.
  • Glow – main ingredients includes Coenzyme Q10, Sea Buckthorn Berry, Selenium, and Vitamin E which helps the user regenerate cell and skin tissue for smooth skin.

A news release also mentions that these juice shots will be available in gas stations (Shell, Mohawk/Husky, Chevron), convenience stores (Mac’s, Quickie, etc) and supermarkets (Safeway, Capers, Whole Foods).

It appears that everyone is getting on board with the shots.  First energy drinks and now juice beverages too.  BevWire previously mentioned that margins are notably higher and costs are lower therefore it makes sense to be in this category.  Whereas juices and energy drinks are mainly found in the cooler vault at the back of the store, consumers may find these shots in the beverage aisle or at the cashier till (providing an additional point of interaction before their complete their purchases).

While it may seem too early to make a decision, it seems like Happy Planet has made a good move here.  While the all-natural juices category is growing, this proliferation leads to over-stimulating the consumer and the products ultimately receive less exposure given this proliferation.  Therefore, providing juice shots is a key differentiator that will have consumers take notice – it also helps to have your product positioned at the counter when consumers are ready to pay (increasing impulse consumption).  Second, the shots market is mainly dominated by energy shots.  By offering juices in a smaller serving, Happy Planet will potentially increase their share of pocket by switching consumers looking for a quick, small beverage without the caffeine (with the exception of Energy+ which does contain caffeine).

Happy Planet has also supported this launch with its event marketing.  Happy Planet will be in Vancouver, Calgary, Toronto and Montreal to promote their new innovation.

At the moment, BevWire has not noticed any other juice shots available in Canada.  This gives Happy Planet a monopoly on the market without any competitors.  However, given the history of a product’s success, we may be primed to see more juice shots introduced to the market soon enough.

If PepsiCo bought PBG and PepsiAmericas…

pepsilogo1Yesterday BevWire talked about PepsiCo’s offer to buy Pepsi Bottling Group (PBG) and PepsiAmericas for $6 billion.  Today BevWire will discuss the results of a successful acquisition.

“A move this big changes the entire landscape of the industry,” said John Sicher, editor of the trade publication Beverage Digest. “Today the beverage business consists of a greater diversity of products, and PepsiCo needs more control and flexibility over the route to market for its brands.”

10 years ago, Pepsi Bottling Group separated from PepsiCo to become an independent company.  This allowed both companies to concentrate on what they do best – PBG to distribute and execute the carbonated soft-drinks, and PepsiCo to focus on marketing.  However, PepsiCo currently operates three different distribution systems: soft-drinks distributed by bottlers, sports drink (Gatorade) delivered through warehouse distribution, and juice business (Tropicana) distributed through the warehouse.  At the same time, carbonated soft-drinks sales have slowed down while non-carbonated soft drinks have increased.  PepsiCo’s Gatorade and Tropicana beverage business is delivered directly from a warehouse to a retailer, whereas PepsiCo’s carbonated soft-drinks are bottled and distributed separately.  Therefore, it makes sense to consolidate the three distribution systems into one system.  Analysts estimate that cost savings when fully realized may be up to $400 million per year.

Also, by consolidating the bottling business and the marketing business, PepsiCo will have a competitive advantage in decision-making and prices to retailers.  With decision-making, PepsiCo will eliminate middle management layers and eliminate liaisons between the two companies, allowing information to travel a shorter distance and speed up key decisions.  With prices to retailers, it has been noted that bottlers have been increasing prices to retailers.  Bottlers increase prices in order to maintain profit margins due to the weak economy.  By eliminating the bottlers, PepsiCo will be able to determine pricing and may even have cost savings to pass onto the consumers (relating from transport costs and sales costs).

Pepsi Bottling Group and PepsiAmericas are evaluating PepsiCo’s offer right now, so we will wait to hear back from them.  It will also be interesting to see how The Coca-Cola Company responds, as they own a 35% stake in Coca-Cola Enterprises, The Coca-Cola Company’s largest bottler.

Pepsi offers $6bn to buy Pepsi Bottling Group and PepsiAmericas

PepsiCo just offered a $6 billion bid to purchase both of these bottlers, which bottle and distribute nearly 80% of PepsiCo’s beverage volume in North America.  Chief Financial Officer Richard Goodman declares that this will allow Pepsi to negotiate with retailers directly, allowing for smaller more niche products to be carried by the bottlers.

Indra Nooyi, Chief Executive Officer states, “There is a need to be more nimble given the increasing role of (non-carbonated beverages), retailer consolidation and the changing competitive landscape.”  Nooyi means that by cutting out the bottler, Pepsi will operate on a more efficient scale because of their ability to persuade retailers to carry a greater variety of Pepsi products including new innovations.

More on this story later as it unfolds and develops.

Fanta updates packaging, add news formula

fantanew

Coca-Cola announced today that they will be unveiling new packaging for the Fanta series of sparkling beverages later this month (new packaging on left, old packaging below right).  The US’s best selling fruit-flavored sparkling beverages will have contemporary graphics and colorful illustrations in their new packaging.

fantaold

Also, Fanta Orange will be the first fruit-flavored sparkling beverage produced using 100% natural flavoring.  “We know that during these difficult times, shoppers want to bring home products that the entire family will enjoy; we are pleased to invest in our products and offer the same great taste of Fanta now with 100 percent natural flavors,” said Santiago Blanco, vice president of Sprite and flavors, Coca-Cola North America. “The introduction of this new formulation and the new look of the Fanta line are part of our ongoing efforts to reinvigorate the sparkling beverage category in the U.S., and Fanta will play a critical part in this effort due to its strong connection with teens.”

Critics analyse that Fanta’s efforts are an attempt to solidify its position in the fruit-flavored beverage category.  Given it’s positive image with parents (it’s caffeine free) and it’s appealing taste and flavor assortment geared towards teens, Fanta has indeed established a leadership position.  With the new naturally sweetened offering, Coca-Cola brings Fanta in line with Coke and Sprite as naturally sweetened beverages, making it a more attractive choice to consumers.

The “same great taste” of naturally sweetened beverages are debatable.  For better or worse, the refreshed packaging has not been released and still awaits consumer feedback.  However, Fanta does not have as strong a brand relationship as Coke (and recently Tropicana) to ignite a riot given its change in formula or packaging.

Pepsico sues Coca-Cola over Powerade advertisements

poweradeion

The advertisement above is part of Coca-Cola’s current marketing efforts to promote its Powerade sports beverage.  Other advertisements depicts Coca-Cola’s Powerade as claiming that it is the “complete sports drink.”  Powerade says that they have scientific evidence to show that its sports drink has been reformulated and contains 4 electrolytes compared to Gatorade’s 2 electrolytes.

PepsiCo’s Gatorade business unit filed a lawsuit against Coca-Cola’s recent US advertisements over false claims in advertisements for Powerade Ion-4, which claim that it contains more electrolytes than Gatorade and refreshes consumers better.  PepsiCo’s lawsuit claims “there is no evidence, scientific or otherwise, that Powerade Ion-4 functions better than Gatorade as a sports drink.”

Coca-Cola’s spokesperson Scott Williamson replies in a statement, “We stand behind our product and are prepared to defend the role that Powerade plays in hydrating consumers.”

“As the category leader, we have a responsibility to ensure consumers are accurately informed about the benefits of a sports drink,” PepsiCo said in a statement. “And the truth is scientists say there is no evidence that Powerade Ion-4 is a more complete sports drink than Gatorade.”

Filing a lawsuit to respond to Coca-Cola’s claim isn’t likely something that will deter the Coca-Cola from continuing its marketing efforts.  After all, this lawsuit may bring more attention to this category and as summer looms, Powerade may stand to gain sales and market share through its advertising.

It will be interesting how this affects consumers, if at all.  Gatorade has over 75% market share (compared to Powerade’s 22%) and most places that offer both products provide space for Gatorade at a 2:1 ratio compared to Powerade.  In addition, consumers’ understanding of the beverage category is low but the relationship with the sports brand is high.  Therefore, even though Coca-Cola claims that it offers a better beverage, it may still not succeed in switching consumers over from Gatorade because of Gatorade’s strong brand power.

Summer is approaching and the lines are drawn, let the sports beverage war battle begin…

Red Bull: now available in energy shots

Reb Bull energy shotRed Bull recently announced that they will also enter into the energy shots market.  They will be releasing an energy shot and a low calorie edition of the energy shot in June.  The two shots are 2 ounces (59ml) and contain 80mg of caffiene.  Red Bull will market these shots for about $2.79 individually or $4.99 for a two-pack.

Will Red Bull maintain is market leader position when they enter into the energy shots market?  It is hard to say.  Red Bull indeed grew the category for energy drinks, but 5-Hour Energy (Living Essentials) developed the energy shot market niche first.  Red Bull is coming into this market late, and the market leader is a copycat now.  The price point shows Red Bull understands their market position.  They will market the shots at $2.79, while 5-Hour Energy is currently selling their energy shot for $2.99.

It remains interesting to see Red Bull enjoy the kind of success they do given their limited offering (they only carry the regular energy drink and the sugarfree version).  However, Red Bull’s introduction of energy shots will bring many new customers to this market.  Red Bull loyalists may likely switch over to the smaller version that packs enough caffiene to get them through a few hours of the day.  Also, consumers may have been hesitant to try energy shots until a trusted company brand like Red Bull enters into the market.

Here’s to hoping that Red Bull transfers the success from the energy drink market into the energy shots market.

vitaminwater10: launching at a new york des10nation

vitaminwater10On April 2nd, vitaminwater10 was officially released.  This beverage is naturally sweetened and contains only 10 calories, and promises to taste the same as the regular vitaminwater beverages.  The low calorie drink is available in 4 flavors: xxx (Acai-Blueberry-Pomegranate), essential (Orange), citrus (Tropical Citrus), and multi-v (Lemonade).  To celebrate this launch, the company had Carmen Electra host a launch party in the New York Soho district.  The launch party was a highly exclusive event that only included the brand’s closest friends (guests included Madonna and 50cent, among other celebrities).  After this April 2nd launch party, vitaminwater10 extends the party to the public from April 3rd to April 12th from 10am to 7pm.  During this time, anyone interested can go and attend this event.  So what happened during the launch party?  Guests played on the Wii, competed on the foosball table, and snapped shots in the photo booth.  Waiters/waitresses also served guests vitaminwater10 in mini shotglasses.  If you are in the area, you can go and experience this launch party and bring some news back to BevWire, thanks in advance.

Now that vitaminwater is available in low calorie flavors, which promises to offer the same taste as the regular calorie flavors, why still make the regular calorie flavors?  Should they discontinue making these flavors?  The answer is no.

Not that vitaminwater has the same brand stature as Coke or Tropicana, but if they stopped making the regular flavors and phased customers into the low calorie flavors, they would be just as bad as New Coke or Tropicana’s one-and-done packaging.  The brand is still in its expansion phase outside of the United States, where vitaminwater10 isn’t even widely available yet.  To phase out certain flavors would stunt the brand’s growth, not to mention it would confuse customers on what the manufacturersare really offering.  You may find vitaminwater10 xxx listed in one place, while the regular vitaminwater xxx is only listed down the street.

However, glaceau is certainly walking the fine line between providing options to capture every last consumer and overloading the consumer with variety.  The company does seem to know what it is doing, so we’ll have to see if and when they reach the critical point where there are too many options available to consumers.