Cola Wars…Here We Go Again

Pepsi has always been on the edgier side with their marketing and they have done it again.  Always the company to ignite rivalry with their taste tests and comparison commercials, they released a TV ad during the 1995 Superbowl titled “Diner” pitting Pepsi against Coca-Cola.  The commercial ends with “Nothing else is like a Pepsi”.  You can see the ad below.

Recently, Pepsi has released a sequel to this TV ad – Diner2 or War – pitting Pepsi Max against Coca-Cola Zero.  In this updated spot, the Pepsi driver offers a Pepsi Max to the Coca-Cola driver, snaps a video of him drinking it, and then posts it on youtube.  The tag line at the end of this updated commercial is “Zero Calories, Maximum Pepsi Taste”.  25 years later, and Pepsi is still trying to ignite rivalry with Coca-Cola.  First it was against Coca-Cola and now it’s Coca-Cola Zero.  But despite all the commercial views on TV and online, does this ad work?  And the more important question, does it created the desired effect of switching Coca-Cola Zero drinkers to Pepsi Max?  The commercial can be seen here.

It is obvious what is being advertised in the updated commercial, and it uses humor to play off of the taboo of a Coke driver drinking a Pepsi Max, and ends reminding consumers with the tagline “Zero Calories, Maximum Pepsi Taste”.  Will this get anyone to buy a Pepsi Max?

BevWire doesn’t think it works.  While the commercial is funny, it won’t get anyone to change to Pepsi Max – it lacks a compelling message to get a consumer to switch.  It advertises itself as a copycat of both Pepsi and Coca-Cola Zero when it’s trying to communicate maximum taste but zero calories.  With all the logos involved pitting the two against each other, it is obvious Pepsi Max is trying to one-up Coca-Cola Zero through the ad.  Then the ad finishes saying “Zero Calories, Maximum Pepsi Taste” .  Maximum Pepsi Taste!?  Why go through an entire 60 spot to showcase yourself against one competitor (Coca-Cola Zero) and end with the tagline comparing yourself to Pepsi?  This wasted the commercial’s comparison with the new focus on Pepsi.  Would a tagline like “Zero Calories.  Nothing else like a Pepsi Max” be better since it maintains the focus on Pepsi Max?  Compared to Coca-Cola Zero’s latest commercial, this Pepsi Max commercial lacks originality despite its desire to portray originality.  At least Coca-Cola Zero communicates to its audience that it offers real Coca-Cola taste with no calories, and does this while focusing on its own product.

Ultimately, this commercial won’t change anyone’s opinion of their zero calorie beverages.  Those that enjoy Pepsi Max will keep on buying Pepsi Max, and those that choose Coca-Cola Zero will continue to purchase Coca-Cola Zero as well.

Another question that lingers in the mind may be how Coca-Cola will react to this commercial, will they do anything to combat this comparison ad?  When the entire carbonated soft drink category seems low single digit growth last year and Coca-Cola Zero experiences double digit growth, there will definitely be someone out there trying to copy you and take your growth away.  Coca-Cola Zero’s reaction should be flattery since Pepsi Max is trying to imitate them, because it provides additional publicity for Coca-Cola Zero free of charge and reinforces the fact that Pepsi Max is a copycat.  Will Coca-Cola do anything to combat this ad?  If a reminder is needed, look no further than in their own history with the New Coke launch failure.  If you get caught up in what the competitor and media is saying about your own product, your own fears will become a self-fulfilling truth forcing you to make an action that you will later regret.  BevWire thinks Coca-Cola should maintain status quo with their own advertising.  When you are the category leader (zero calories soft drinks), and you’ve built up brand loyalty through your own set of ads communicating your own great taste, why stoop to the level of your competitor and engage in another round of the Cola Wars?

Popular Trends For Beverage Flavors

BeverageWorld has published an article about this year’s top beverage flavor trends (link here).  It focuses mainly on the U.S. beverage market, but since Canada is just north of the United States these trends likely apply to us as well.  Every year companies analyze beverage trends to determine the flavor trends and to see which fruits may become popular with consumers.  In years past, fruits like yumberry, pomegranate, goji berry, pomegranate, and passion fruit have resonated well with consumers’ taste palates and become mainstream.

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This year, fruits and flowers from different parts of the world are predicted to make an impact.  Sensient Flavors – one of the companies that follow these beverage trends – provides some insight into where some of these fruits are sourced and which fruits are going to be big sellers. South America will offer fruits such as the cape gooseberry, lulo,  maqui, mora berry, umbu, and caja. The mora berry (see left) might become popular because of its similarities to the blackberry and raspberry with its dual taste of sweet and tart.  Africa offers the baobab and marula fruits, with the former offering high levels of vitamins and anti-oxidants.  China will see the kumquat gain in popularity with its broad taste profile – offering salty, sour, and sweet flavors.

It appears that most of these fruits are coming out of the southern hemisphere and eastern hemisphere.  This might be because American consumers (and Canadian consumers too) are more daring in their food and beverage options.  Always curious to try new flavors, products, and spices, companies are eager to satisfy these demands through finding the next big product.  And the southern and eastern hemispheres appear to offer more exotic fruits, or at the very least fruits that were previously unknown to westerners.

While not all the above mentioned fruits are going to be popular depending on consumers’ taste preferences, all or some of them are likely to be a hit at one point or another given the interest to try new and exotic flavors.  So the next time you pick up a new product, be sure to check out the ingredients section on the label and see if any of the fruits mentioned above are part of your drink!

Is More vitaminwater Coming to Canada?

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BevWire has learned that there may be more vitaminwater flavors on the way.  Speaking with some industry sources and then browsing through the trademark database, BevWire has found that there’s two new flavors registered with the Canadian trademark database – Balance and Endurance.  In the United States, Balance is a Cranberry-Grapefruit flavor and Endurance is a Peace-Mango flavor.  Will these flavors be the same in Canada, or are they merely the same names for other flavors (ie. Mega C in Canada is Power C in the U.S., Restore in Canada and Revive in the U.S., and so on)?

BevWire has always been very critical of a product over-extending its reach and this is a classic example of this scenario.  With these two new flavors entering the Canadian market, that brings the total number of vitaminwater flavors up to eleven. What threshold is vitaminwater using to determine that there is enough sales potential to release additional flavors?  Will these two new flavors replace two older flavours, and which ones will be replaced?

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While the enhanced beverage category is still growing, it’s at a decreasing growth rate.  This indicates that vitaminwater is still increasing its sales and has not reached a market saturation point, but the saturation point may be close.  At the end of March 2010, the enhanced beverages market was over $6 million in sales.  Vitaminwater garners about 60% market share, thus accounting for $3.6 million overall and $400 000 for each flavour (rough numbers since some sell better than others).  If that’s the case, then a simple threshold to pass would require than each flavour sell at least $400 000 in order to stay on the market – without accounting for cannibalization.  BevWire thinks that $400 000 for new flavors may be difficult to hit, and therefore some flavors must be discontinued to make way for Balance and Endurance.  The question then becomes which flavors currently underperform and justify being removed from the shelf?

In any case, no word on official launch dates yet.  The trademarks have been approved and are awaiting registration (pending official complaints from other people over these names).  Keep an eye on for which flavors disappear from the shelves when these two hit the market.

Coconut Water Brands – One For Each Beverage Company

Vita Coco recently announced a US distribution agreement to have Dr Pepper Snapple Group unload Vita Coco from their delivery trucks.  This comes after O.N.E. (One Natural Experience) has partnered up with Pepsi and Zico has partnered up with Coca-Cola last year.  Now the three bigger coconut water companies are aligned with one beverage company each.

Coconut water has seen explosive growth in the last 5 years, as it grew in popularity due to its natural health benefits. Coconut water contains the same amount of electrolyte balance as human blood, and also contains the sugars and vitamins that athletes needs to replenish themselves after strenuous activity.  By positioning the beverage as a healthy beverage alternative to isotonic beverages, it has carved out a significant following among consumers.

Their growth was fairly limited to specialty supermarkets and high-end grocery stores because of the weaker distribution network.  Now that each major player has the backing of a major beverage company, it is likely to see significant increases in availability as it becomes mainstream.  However, it remains to be seen how much resources are dedicated to this new emerging category – and this may change the overall beverage landscape.  Both Coca-Cola and Pepsi have key players in their portfolio for this category, and both have more resource they can allocate.  Though growth is significant, the majority of each beverage company’s sales are still generated by CSDs (carbonated soft drinks) and not all of them would want to throw support to back this category.  At the moment, Vita Coco (partnered with No 3 beverage distributor Dr Pepper Snapple Group) holds majority market share in the United States for coconut water sales.  With the distributive muscle and support of a major beverage company, each coconut water brand has potential to grow and increase their reach in the United States, as well as Canada and other areas of the world.

Coconut water is already making an impact in the Canadian market.  But in the next few months and years, there can be much more growth for them when the beverage manufacturers figure out how to take advantage of this partnership.  Keep an eye out for these players!