Pepsi Launches Liquid Enhancers: Aquafina FlavorSplash

The new Aquafina FlavorSplash line-up: sparkling water and liquid enhancers.  Courtesy of facebook.com
The new Aquafina FlavorSplash line-up: sparkling water and liquid enhancers. Courtesy of facebook.com

It’s been a few years after Kraft MiO revolutionized flavor enhancers, but Pepsi has finally launched their own liquid enhancers under the Aquafina water brand.  Following a beverage portfolio evaluation that lasted nearly 12 months, Pepsi will overhaul Aquafina FlavorSplash to include new sparkling water flavors and liquid enhancers.  On the liquid enhancer front, they will have three offerings: So Strawberry, Berry On, and World Peach.  Pepsi’s offerings are targeted toward a younger demographic primarily aged 13-19 years old (more on that later).  After waiting so long to enter this beverage segment, will Pepsi see success?

With another household name entering the segment – be it Pepsi or Aquafina – liquid enhancers as a segment benefits from more media support.  Like Coca-Cola, Pepsi has their own distribution network as well as their own merchandising and cooler units.  Having your own branded equipment assets are important for consistent communication, and even more crucial to ensure flawless execution.  As we have seen Powerade Zero Drops and Dasani Drops merchandised within Coca-Cola coolers, we can expect Pepsi to do the same with Aquafina FlavorSplash droplets.  This will help Pepsi get prime location space within grocery channels and restaurant establishments to display their newest products.

Aquafina FlavorSplash Berry On flavor.  Courtesy of facebook.com
Aquafina FlavorSplash Berry On flavor. Courtesy of facebook.com

By targeting a younger demographic, Pepsi aims to introduce consumers to their beverages at earlier life stages.  While appealing to the product’s purchaser (moms) is a different challenge, Pepsi hopes teens will be able to influence the purchase decision.  If not, Aquafina FlavorSplash may be something teens can still buy in school.  AdAge’s article detailing the Aquafina FlavorSplash interviews Pepsi’s CMO Simon Lowden, which describes the possibility at getting Aquafina FlavorSplash stocked in high schools as well (article link here).  The younger demographic puts Pepsi’s liquid enhancer in a niche where no other competitive liquid enhanced is targeting.  So far, young adults, athletes, and tea drinkers have been the general target.

The product packaging itself will spur interest, as the candy-colored packaging is brightly colored that will attract the demographic’s attention.  With unique flavor names – unlike the many berry-pomegranates and mango-peaches on the shelf – the flavors should stand out among the competitive set as well.

As a new player enters the segment, retailers and consumers will benefit from all the healthy competition for their dollars and chance to quench their thirst.  Pepsi will see success within this segment, given messaging toward an audience where no other brand is explicitly communicating toward, their own equipment assets that allow for prime product placement opportunities, and a product that is on part with market trends.  Even with all the competition within the liquid enhancer landscape – Kraft, Dasani, Powerade Zero, Crystal Light, and Nestea to name but a few – Pepsi’s Aquafina FlavorSplash should be able to garner healthy sales.

Red Bull Launches New Product: BULL Energy Drink

Courtesy of BevNet.com - the new Red Bull
Courtesy of BevNet.com – the new Red Bull “Bull” Energy Drink.

Thanks to a tip-off from BevNet.com, we learned that Red Bull North America has quietly released a new limited edition orange-flavored energy drink (BevNet article here).  The new 8.4oz (250ml) energy drink is closely linked to soccer, predominantly available in sporting venues where soccer is the main attraction.  After launching beverage innovations in other areas, it appears that Red Bull has returned to exert their influence within energy drinks.  With failed experiments at penetrating soft drinks (with Red Bull Cola) and energy shots (with Red Bull Energy Shots), the renewed focus toward energy drinks is a welcome sign for the energy drink manufacturer.

However, why was this product launched without much publicity?  It took consumers to bring up this launch in order for BevNet to squeeze more information out of Red Bull.  Even a search through google has revealed no information nor any high quality images for this product as of yet.  Is this a new launch plan that Red Bull is trying out, where they offer different flavors in limited duration?  Is this even a good strategy given their strength and associations with “energy”?

Red Bull’s latest launch carries with it the discussion of “Push vs Pull Marketing”.  With consumers searching out more information on the BULL energy drink, Red Bull may have effectively created new consumer demand for this innovation – hence the manufacturer’s “pull” tactic.  Regardless of intent, they have transformed their brand loyalists into advocates for the new energy drink.  And instead of selling it into retailers and sacrificing shelf space for a new extension (the manufacturer’s “push” tactic), the consumer demand may help put this drink in the fridges and cooler vaults at the expense of Monster, Rockstar, or a host of other energy drink manufacturers.  Even if the target was for sporting venues exclusively.  If this is a new introduction strategy that Red Bull is trying, then it has been successful at generating buzz.

The question on whether this is a good strategy is a tougher one to answer.  Even with the product launch deemed a success, the question on how much more successful it would have been with marketing support remains.  Given that Red Bull and “energy drink” are synonymous like Kleenex and facial tissue, or Colgate and toothpaste, or Band-Aid and adhesive bandages, why do they not leverage on the strength of their brand name?  The equity of the Red Bull name carries with it easy access to retailer distribution and a profit premium.  The fact that the product’s packaging bears minor resemblance to Red Bull starts an entirely new discussion on what Red Bull is trying to do here.  Per the BevNet article on the different look of this product, could Red Bull be attempting to create sub-brands or sub-segments within their product portfolio?  Or are they trying to be show off more brand personality with the whimsical packaging?  Certainly thought-starters for a different day.

What we know so far is that after the foray into soda and energy shots, Red Bull has hit home runs with their energy drink product launches.  Red Bull Total Zero and Red Bull Editions should have generated incremental sales to their beverage franchise without much cannibalization.  Should the BULL energy drink become a staple, chances are it will be a success as well.

Happy Canadian Thanksgiving!

Hello folks, Happy Canadian Thanksgiving!  If you had been following me on Twitter (@BevWire) you’ll notice that I have been out of the country for the past week.  As such, I haven’t had much time to post anything.  Keep up to date with what’s going on in the beverage industry through my twitter feed, and return next Monday for the weekly beverage post. 🙂

Canadian Grocer re-post: Partnering to Win in Energy Drinks

Despite media coverage that has focused on the adverse effects of energy drinks over the past year, the category has continued to gain value and deliver profits for retailers and manufacturers alike.  Part of this can be attributed to consumers wanting what they’ve been told is off-limits to them.  The other part is a result of smart category management by retailers and manufacturers.

Retailers are no longer listing any and all energy drink innovation brought to them by manufacturers to capitalize on the energy drink wave.  Instead, they are looking for products that play defined category roles to complement their retail selling strategy.  They are searching for a total category solution that will help drive sales for both the category and the retailer.  They may also be looking for a manufacturer to partner with to drive the strategy specifically for energy drink products.  As such, the previous shelf sets that were littered with fewer facings and broader selection has now been somewhat streamlined to increase product facings of a narrower product assortment.  Carefully defining their specific category strategies has helped retailers decide on how much and what to carry.  For example, Loblaw has a wider product selection compared to Walmart.  While both retailers carry the top products, that is where the similarities end.  Walmart only has the top sellers within those specific brands while Loblaws carries more variety within those energy drink brands and some additional products.  Walmart’s category strategy for energy drinks may be more indicative of a routine purchase, while Loblaws strategy exhibits more of a destination focus.

Manufacturers are also bringing deeper insights to the table to showcase the strength of their beverage brands and how they align with the retailer’s go-to-market strategies.  With key discoveries on consumption habits and similarities with a retailer’s core shopper, the manufacturer is showing the buyers that they have a strong understanding of where category growth is coming from and how to target the most profitable demographics.  A key example may be the energy shot segment’s growth fueled by 5-Hour Energy.  Expanding on their marketing platform of alertness without the caffeine crash, the product has recently been marketed toward seniors that require an energy boost.  Understanding the insight that seniors are not ready to slow down and also crave energy boosts has led to distribution gains within pharmacy centers and shelf space next to winkle cream and nutritional beverages.

The 5-Hour Energy line-up.  Some targeted toward women, others toward seniors.
The 5-Hour Energy line-up. Some targeted toward women, others toward seniors.

As the Canadian retail landscape continues to change, profitability is top of mind for everyone – not just beverage manufacturers.  Collaboration between the manufacturer and retailer becomes progressively important to ensure that the product categories are effectively managed.  If a retailer has not partnered with their core categories’ manufacturers, now is the time to start!