Backed by Popular Dewmand – 3 Mtn Dew Flavors

Mountain Dew Pitch BlackMtn Dew is bringing back three flavors as limited-time offerings, as Pitch Black, Supernova, and Typhoon will re-appear on store shelves to compliment the regular line of Mtn Dew options.  Advertising Age’s article mentions that Mtn Dew have listened to their fans from Facebook and Twitter about which flavors to bring back (article link here) and will be introducing them.  Mtn Dew will thank fans for their support of the beverage, and name some of these famous fans (“All-Stars”) in upcoming advertisements.  You can check out their Facebook splash page here.

This is an interesting marketing strategy by Mtn Dew, where they can also gain a lot of credibility.  By going back to flavors the worked in the past and re-introducing them, Mtn Dew shows their loyalists they the company is listening to them.  Not to mention it also saves them time and effort in having to gain traction for these beverages because all these flavors already have some level of familiarity with beverage drinkers.  And by publicizing fans in the campaign, in addition to launching strong digital efforts on Facebook and Twitter, Mtn Dew shows fans that they “get it”.

Unfortunately, while Mtn Dew as a whole “gets it” in the United States, the same can’t be said for Canada.  There are minimal Mtn Dew offerings available here in Canada, and the packaging itself is still old-fashioned.  So with all the support south of the border, why has there been less engaging efforts here?  Is the beverage market here in Canada more fragmented than that of the United States, meaning that their chances of hitting a home run with limited-time offerings are unlikely?  Or is the beverage market too consolidated, making it unlikely where these special offers will gain any traction at all?  Or both?  My guess is the latter, where the carbonated soft drinks market is too consolidated, along with the fact that Canadians (on the most part) are not as adventurous with our beverages.

Take a look at what you can find in the convenience store or grocery store aisle, and you’ll see that most retailers stick to the main top-selling flavors.  For more proof, pick up one or two of the more obscure drinks and look at its best before date, and see how close it is to passing this date.  This would prove that Canadians like their soft drinks, but only the popular ones.  And while consumers may be adventurous and receptive to trying new beverages, there are multiple factors that prevent the products from ever hitting store shelves.  First, the  manufacturer/distributor sales team must convince a retailer to carry the product with sales potential, supportive marketing efforts, and maybe even listing/slotting fees.  At the same time, both the retailer and the sales team are mindful of their budgeting and sales targets, where if the product is not successful then both parties lose money.  Secondary, if a product is introduced and the retailer chooses to carry it, some other slow-selling product must be taken away in other to gain shelf space.  Even if you are successful at showing your product’s potential, you must convince the retailer to make space for your product at the expense of another product, maybe one of your own products.  So even if the consumer is willing to try the beverage, the retailer may not want to carry it despite its potential because it does not beat out any existing product on shelf.

Not to say that Canadians don’t ever get a chance to embrace new beverages, but compared to the amount of new product introductions in the United States, we are very far behind.  The next time you want to try a new product, head over to your convenience store or gas station…across the border.

Pepsi Next to Launch in Test Markets

Pepsi Next - courtesy of rft3.wordpress.comA couple of months back I covered a piece on Pepsi’s intention to launch a mid-calorie cola this summer (previous post link here).  I also mentioned that it was a bad idea since their portfolio already included a full-calorie cola soda, a zero-calorie option, and a diet option as well.  As more information came out on the product, Pepsi plans to position the product on taste, which would ultimately be more advantageous to Pepsi Next and their portfolio.

Pepsi’s theory is that consumers want to limit their calorie consumption and look for substitutes for the full calorie option.  However, some consumers are disappointed with the diet or zero-calorie alternatives since it tastes different, and end up leaving the cola franchise altogether for water, juices, or teas.  By launching Pepsi Next, they can cover the cola consumer’s choice spectrum and extend their product life cycle.  Cola products typically enter a consumer’s consideration set when they’re young and carefree on calories.  As the consumer ages they want to cut back on calories so they transition to diets or zero-calorie options.  Unlike Coca-Cola (which has Diet Caffeine Free Coca-Cola to appeal to older consumers), that is the extent of Pepsi’ cola product life cycle.  Enter Pepsi Next.  Pepsi is attempting to insert Next as a bridge product between their full calorie and zero calorie options, hopefully transitioning consumers along a calorie path from full –> mid –> zero.

On the issue of taste, Bill Pecoriello, CEO of Consumer Edge Research provides us with some insight.  Pecoriello says,

“The consumer wants calorie reduction. If you can give half calorie with no taste sacrifice, there’s a product there for the consumer.  C2 and Pepsi Edge failed and taste was a major issue. [Consumers] are not willing to sacrifice taste for half the calories when you have Diet Coke and Diet Pepsi out there. Something like a Pepsi Next, if it could achieve the taste profile, could be incremental for the category.” 

Some questions come to mind from the above comments.  Will the taste of Pepsi Next differ from Pepsi and Diet Pepsi?  At a time when health and wellness have become a top-level issue, consumers may replace regular Pepsi with Pepsi Next if the taste is believed to be identical. And again, the question of cannibalization comes into play since the number of cola drinks are finite, and inserting another product to their consideration alternatives may turn into a substitution in their choices.

I believe that the tastes of Pepsi, Pepsi Next, and Pepsi Max will all be different.  Pepsi will likely engineer Next to taste more like Pepsi since it can be produced with ingredients that contain calories.

In any case, we will find out come July whether Next will be successful it its test markets.  Pepsi plans to introduce their mid-calorie cola in two cities, one each in Iowa and Wisconsin.  If any readers and Pepsi fans happen to be living in the initial launch cities, feel free to post some comments or send me an e-mail on this product should you run a taste test.

vitaminwater spark…Yet Another Flavor

vw spark - courtesy of we-rate-stuff.comRegular readers of the blog will know that though I’m a fan of vitaminater as a brand, my belief is that this many varieties of vitaminwater undoubtedly cause cannibalization.  vitaminwater spark launched in mid-February, bringing the total count to 11 (9 vitaminwater flavors and 2 vitaminwater10) flavors.  spark is a blueberry grape flavor and has all the natural ingredients and healthy benefits that the other alternatives possess – it’s just a different flavor.

Unless spark has a niche following of open wallet consumers, it may follow vitaminwater rescue to be discontinued after some time on the market.  In any case, there is only so much demand for vitaminwater, or enhanced waters as a whole.  A consumer  that chooses any number of flavors will eventually stick to one or two, and keep on going back to these trusted choices.  Some (not all) of the remaining flavors may be popular but not to the same level as the favorites.  These flavors also remain on shelves contributing to incremental sales.  But since a grocery store has limited shelf space and must determine planograms, it is unlikely that all 11 flavors will be on shelf.

So how many flavors does a grocery store carry of vitaminwater, and how much shelf space does vitaminwater get?  Without getting into too much detail, vitaminwater’s top 4 flavors make up nearly 60% of their overall sales in the 20oz bottle size.  If the store manager or a category manager must make decisions to cut out flavors or keep only the best selling flavors (to make way for new products), usually 4 flavors of vitaminwater are kept.  So far, spark is not generating as much sales as XXX, focus, multi-V or essential.  Though its still very new to the market, I doubt it will match any of those item’s sales.

Therefore, it is like that there are no volume thresholds that spark must meet in order for glaceau to keep it on shelf, except providing their hydration experts (sales representatives) with incentives to keep pushing this product.

Next time you head into a grocery or convenience store where this product is sold, take a quick count of what flavors of vitaminwater are on shelf, and if spark is among those.  If the two new introductions before spark are not even on shelf, then it’s likely that the particular retailer does not have  an appetite to try any more vitaminwater flavors.

Energy Shot’s New Target Audience: Baby Boomers

5-hour Energy ShotThe Wall Street Journal reported that baby boomers are now the target for energy shots like 5-hr Energy (link here).  At first look it sounds like a bad idea, targeting seniors and baby boomers with energy shots since there is so much negative connotations with energy drinks for the general public, and now it is targeting seniors which may be more susceptible to the health concerns of energy shots.  Yet the American Association of Retired Persons (AARP) has allowed for 5-hr Energy to advertise their product in the AARP bulletins and hand out samples at their events.  In short, 5-hr Energy and other energy shots are supported in the AARP’s marketing position toward seniors.

Should seniors really be positioned as a market for energy shots?  And now that their parents or even grandparents are drinking energy shots, how will this affect the product’s reach toward their core demographics?

As much as this may seem like a shocker, this appears to be a good marketing ploy for Living Essentials (the makers of 5-hr Energy) to position toward seniors.  The category may have peaked, but it is still gaining sales at a decreasing rate compared to the previous year.  With the variety of energy shots that need to be delisted to make space other products, there always seems to be an unexplored market that finds energy shots intriguing.  And advertising the product as a sort of dietary supplement toward seniors hits the sweet spot.  Since everyone is healthier and living  a more fragmented lifestyle nowadays, why deny baby boomers their entitlement as long as they have the energy to do so?  If a boomer needs an extra kick to golf 18 holes and choose to consume something other than coffee, why not 5-hr Energy?  The AARP’s research concluded that there are no specific harmful effects of the beverage, and has thus allowed 5-hr Energy to promote the product as their events.  And positioning to boomers helps the product gain distribution to other areas where they would not traditionally be found, like shelving the product with wrinkle cream and nutrition shakes.

As for the second question of whether the product would lose popularity among the core audience (young adults), I believe 5-hr Energy would be safe.  While the product is essentially identical, the reason behind the usage varies slightly.  The communication message is different for each audience, and the product is found is different places as well.  For seniors, the product is marketed as a dietary supplement, and would likely be foundin drug stores or grocery supermarkets near medicine or coffee powder.  For young adults, the product is positioned as a caffeinated energy boost and found in the beverage aisle as well as near the cash registers.  The product should ultimately be ubiquitous with consumers both young and old without much concern for it being your grandparents’ choice of product.  After all, if grandparents ate asparagus and drank tomato soup, would young adults not eat asparagus or drink tomato soup?  Doubt it.

Good for Living Essentials to notice this trend and stimulate sales growth for their product.  For a category that seems to have peaked and matured after its initial climb to popularity, 5-hr Energy has provided it with a second life.  The next question then becomes which energy drink competitors (ie. Red Bull, Monster, Rockstar, etc) will try to carry over and gain the shelf space along with 5-hr Energy to target the seniors.