Pepsi Spire’s Launch Fuels Competition and Innovation

Pepsi's range of the Spire. There are three different sizes and versions (1.1, 2.0, 5.0) to help customers cater to their consumers' needs.
Pepsi’s range of the Spire. There are three different sizes and versions (1.1, 2.0, 5.0) to help customers cater to their consumers’ needs.  From left to right: Pepsi Spire 1.1, Pepsi Spire Ice Dispenser, Pepsi Spire 2.0, Pepsi Spire 5.0 counter top unit, Pepsi Spire 5.0 freestanding unit, Pepsi Interactive Vending Machine, and Pepsi Smart Cooler.

Since 2013, Pepsi has been testing an interactive fountain unit similar to Coca-Cola’s Freestyle.  It looks like the testing is complete and they chose to launch the interactive fountain dispenser as Pepsi Spire (after trademarking Pepsi Touch, Pepsi Fusion, and Pepsi Smart Cooler).  The Pepsi Spire comes in three sizes offering restaurant customers up to 1,000 beverage combinations, here’s the media release from Pepsi.  It is currently available in over 50 locations in the U.S.  Spire’s launch comes nearly five years after Freestyle, but Pepsi has taken this time to tweak issues that were present during Coca-Cola’s launch: customer frustration and social integration.

Pepsi launched Spire with three different sizes, relative to Coca-Cola’s Freestyle launch in only one size.  This will certainly be pleasing to restaurant owners.  One of the initial concerns for Coca-Cola’s Freestyle was that some restaurant may not have strong enough customer traffic to justify the available flavor combinations.  This would exclude the Freestyle’s availability for smaller restaurant.  Having smaller units with fewer combinations solves this problem.  This leaves only the top flavors and most popular combinations available for the smaller unit (40 combinations for Pepsi Spire 1.1), and offers the broadest assortment for the largest unit (up to 1,000 combinations for Pepsi Spire 5.0).

Pepsi also understood that the “maker” movement is both interactive – and social.  Despite no direct mention of social media integration, Pepsi has demonstrated the ability to incorporate the usage of mobile phones, Facebook, Twitter and other social platforms with their equipment.  While it is widely understood that most dining experiences are social, Pepsi found a way to make this experience more inclusive with your peers.  Pepsi’s smart equipment also has the ability to provide the restaurant customer with popular beverage combinations at that location, further integrated social and local demographics.

Pepsi Spire 2.0 – the interactive fountain unit integrated with smart equipment to provide popular beverage combinations as well as real-time insights for restaurant owners.

The launch of Pepsi Spire has spurred Coca-Cola to improve the Freestyle.  Coca-Cola recently introduced a mobile app allowing users to share their drink combinations with other users and pre-mix drink combination to scan at the Freestyle unit.  Coca-Cola also announced two smaller Freestyle fountain units coinciding with the Spire’s launch.  To minimize market news and maintain a competitive landscape against the Pepsi Spire, Coca-Cola’s Freestyle has also introduced smaller Freestyle units that dispense 35 drink combinations or 80 drink combinations.

The Pepsi Spire’s adoption rate should be relatively quick given their unit size flexibility as well as their own customer exclusivity contracts.  Beyond customer push tactics, consumer trends and social integration will help pull the Pepsi Spire into more on-premise locations.

The Cola War heats up again with the arrival of Pepsi Spire, this time on the fountain unit frontier.

POM Wonderful and Coca-Cola sue each other

Courtesy of foodindentityblog.com.  Is the Minute Maid juice label misleading?
Courtesy of foodindentityblog.com. Is the Minute Maid juice label misleading?

The food & beverage landscape may undergo significant changes shortly if a lawsuit between POM Wonderful & Coca-Cola is decided in POM’s favor. POM is suing Coca-Cola for misleading packaging for its Minute Maid Pomegranate Blueberry juice.  The labeling suggests that the beverage is a 100% fruit juice flavored with a combination of five fruit juices.  The beverage contents are primarily apple and grape juice, containing only 0.3% blueberry juice, 0.2%. pomegranate juice, and 0.1% raspberry juice.

The crux is whether one organization can sue another for misleading labeling that was deemed permissible by the Food & Drug Administration.  The FDA has decided that the beverage contents and the name itself satisfies their labeling requirements.  That said, the governing body allows companies to name the product based on the flavor even if trace amounts were used to produce the flavor.  Volume quantification is not necessary for the product contents.  Linda Goldstein, a partner with Manatt, Phelps and Phillips prefaced the following to AdWeek (full article here):

“Depending on how the Supreme Court rules, the ramifications could be broad. This is a huge case for the food and beverage industry.  No one has asserted that Coca-Cola violated FDA rules and law. The issue is whether the FDA regulations are the floor or the ceiling. Pom says it’s the floor and that the label can still be misleading.”

Should this case be decided favoring Coca-Cola, the food & beverage industry’s product labeling practice is kept intact.  POM will have made an even larger name for itself and Coca-Cola will carry on business as usual.  In the end, this could serve as a win for both Coca-Cola and POM Wonderful despite the court ruling in Coca-Cola’s favor and everyone paying exorbitant legal fees (the case has been around since 2008).

If the court ruled in POM’s favor, this sets the stage for increased vigilance toward product package labels.  Beyond the direct impact where Minute Maid must augment the product label, other food & beverage products currently on the market will be availability for scrutiny.  According to Goldstein in the AdWeek article, the fact that it could lead to a class action litigation suggests that many products do not satisfy the labeling requirements.  The precedent would be set that an organization can reduce the competitor’s advantage by scrutinizing their packaging claims.  Will this ultimately lead more companies to sue other companies for the sake of labeling challenges?

The genesis of POM’s lawsuit was Coca-Cola’s introduction of this Minute Maid Pomegranate Juice at a lower price point relative to POM’s products.  Given Coca-Cola’s distribution and marketing muscle, it’s understandable that POM would want to level the playing field as much as possible.  However, be careful what you wish for.  POM is also currently in appeals with the Federal Trade Commission over their own misleading advertising claims (full article here).  Through all of this, both beverage organizations’ focus has been on reducing the competition’s advantage.  Let’s hope that they return to their core business functions sooner rather than later: selling refreshing beverages.

Powerade’s 2014 World Cup Campaign Highlights Real Heroes

Courtesy of endomondo.com
Courtesy of endomondo.com

I wasn’t following the 2010 FIFA World Cup close enough to notice when advertising started appearing, but it looks like Powerade and other advertisers want to get a head start for the 2014 FIFA World Cup promotions.  With the World Cup starting in June, Powerade has already released FIFA World Cup commercials.  Here’s the full-length 60-second ad found on YouTube that features both professional and amateur soccer players, launched on YouTube more than a month ago.

This commercial happens to be the first time that Powerade has featured amateur soccer players in a global campaign.  The Powerade advertisement includes five amateur soccer players selected from the U.S., Spain, and Brazil.  These individuals star alongside Spain’s Andres Iniesta, who famously put scored the winning goal in the 2010 World Cup.  Since the tagline is “There’s Power in Every Game”, it makes sense to include other soccer players at different competition levels to help forge a stronger connection to the sport and to Powerade.

Similar to the Procter&Gamble “Thank You Mom” campaign where mothers of Olympic athletes were highlighted to add more context, bringing in amateur soccer players helps humanize the athlete and focus on how they train and prepare.  More importantly, it shines a light on the different adversities athletes must go through in order to attain success.  The spot brings this adversity even closer to home, weaving a story line where the amateur soccer players and Iniesta encounter similar  events during the course of their soccer game.  As one player is tripped during a game, so is Iniesta during one of his games.  As another player is training or resting to prepare for a soccer match, so too is Iniesta.

As a global campaign, there is customization that caters to the local geography.   Powerade has created different backstories for each of the amateur athletes to run in key geographies.  Each player has a different theme that Powerade showcases to help them find their inner power and overcome a challenging situation.  They are featured in a two-minute video where the athlete discusses the challenges they’ve had to personally overcome.  The feature ends with a callout to publicize the theme each athlete represents.  With the U.S.’s Nico Calabria, the common characteristic is “Power in Purpose”.  For Brazil’s Haboubakar Amadou Conde, this theme is translated as the “Power in Determination”.  Spain’s Erik Flores is presented as the “Power in Confidence”.  With Brazil’s Marcelo Lyras, it becomes “Power in Preparation”.  And for Spain’s Karlota Planas, the characteristic is “Power in Pushing Yourself”.  These videos indicate that “Power” is represented differently for each athlete, and conveys the message that everyone defines their motivation in a unique way.

In some ways, soccer is an escape from their personal struggles.  Within these feature videos, Powerade describes additional themes that athletes must “Power Through” to get to their current state.  Athletes continue to defy expectations and failure, in addition to overcoming challenges that deter them from pursuing their goals.

Here’s one of the struggles that Powerade highlights, that of Haboubakar Amadou Conde.  Conde had to overcome language barrier, failure, and homelessness in order to continue playing soccer.

As companies continue leveraging on emotion in their marketing campaigns, the key to success  lies in execution.  If executed perfectly, the beverage brand can foster a strong and genuine connection with many viewers.  I believe this campaign to be well-delivered and creates the emotional link Powerade wants to create.  Check out the Powerade YouTube channel for the other feature videos.