Dasani Drops: Serious Competition For Kraft MiO

 Dasani Drops - courtesy of BevReview.com

I’m sure by now most people have heard of Coca-Cola’s entry into liquid flavor enhancer.  If not, Coca-Cola is launching Dasani Drops to compete with the Kraft MiO and is set to enter the U.S. market in October – you can read more about it at BevNet (link here).  BevWire had also previously written about the impending entry of Dasani Drops (link here), which should offer some top level insight to what this piece will focus on.  With a price point that rivals the MiO and more servings per package, Coca-Cola is ready to offer some serious competition to the original innovation.  What is the potential of this segment now that another branded player is entering the category?  Will Dasani Drops take away Kraft MiO’s share leadership and continue to grow liquid flavor enhancers?  Those are just some of the questions that comes to mind with this launch.

Liquid flavor enhancers exist as a natural transition away from the traditional delivery format.  Aside from the trade up story and the extra consumption occasions this product creates, it taps into the consumers today that want a customizable beverage.  The MiO’s Canadian messaging advertises on the fact of customization – that the user can squirt as much or as little of the MiO into their water to their liking.  The basis is that liquid flavor enhancers are geared toward a younger consumer, one that wants to choose the level of sweetness and flavoring in their beverage.  It would be much harder to do that with powder packets with limit the level of flavoring based on the pack size.

The liquid flavor enhancers market is believed to be worth slightly over $100 million dollars – contributed mainly by Kraft MiO sales with some minor contributions from store brands at the moment.  With another strong branded player, the segment is expected to have an accelerated growth rate.  And given the size of Coca-Cola, doubling segment sales double to $200 million may not be completely out of reach.  

Behind Coca-Cola’s distribution strength and their availability in all places with beverages, Dasani Drops may take away the MiO’s share leadership simply by being more widely available.  The immediate consumption and convenience/petroleum channels are just two areas that Coca-Cola will have access to that the Kraft MiO will not.  Kraft products may exist in the convenience store environment, but it will not be located in the same area that the Dasani Drops may be placed – by the beverage coolers.  Even within the grocery store environment, Coca-Cola may benefit by having the ability to exist in both the bottled beverage aisle and in the powdered drink aisle.  Given that both branded products offer the similar benefits and flavors, winning the liquid flavor enhancers segment really depends on which company can achieve strongest distribution at this time.

Price competition may not completely make sense from a category perspective.  However, beverage products are constantly featured items in the grocery channel and retailers may pressure either manufacturer to increase feature frequency and depth.  As long as both manufacturers understand that this is relatively new segment and a product innovation, neither would want to over-promote the segment since it would a longer time to recuperate their investments.  It’s just a matter of time before Pepsi wants to join the fight, and price promotions will be essential at differentiating each brand’s offering.

Kudos to Kraft for innovating and bringing something truly different to the flavor enhancers market, but now let’s see how well they can defend against a beverage manufacturer like Coca-Cola.

3 thoughts on “Dasani Drops: Serious Competition For Kraft MiO

  1. Pingback: Kraft’s Dual Brand Strategy – Crystal Light Liquid | BevWire

  2. Pingback: Analysis: Kraft's Dual Brand Strategy with Crystal Light Liquid - BevReview.com

  3. Pingback: Liquid Enhancer Segment Legitimized With Powerade Launch | BevWire

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s