At-Home Carbonation Reaching Critical Mass

It wasn’t that long ago that all we knew about at-home carbonation soda was Sodastream following their banned SuperBowl ad in 2013.  In the years since, Coca-Cola has joined up with Keurig and Pepsi has partnered with Bevyz to develop home brewing units and syrups.  We can now add another known competitor to the mix.  Sparking Drink Systems (SDS) International has a product called Viberation that produced carbonated soda all within one beverage pod.  It’s entirely possible that other companies are developing at-home carbonation units with its growing appeal.  Consuming carbonated beverages in an environmental-friendly way helps remove some guilt by reducing the plastic waste.  Sugar intake is another problem, but that’s a focus for another day.  As more competitors enter this expansive home-brewed beverage space, what will define their success?

The SDS Viberator, carbonating beverages within a single beverage pod.
The SDS Viberator, carbonating beverages within a single beverage pod.  Modified image via sparklingds.com.

One of the stronger products in the marketplace would be the SDS Viberation.  This Viberation has the capability to produce sparkling and enhanced waters, carbonate sodas, and even carbonate alcoholic beer without a CO2 cylinder.  The elimination of a CO2 cylinder increases the usability of the device, and possibly increase its adoption rate.  At this time, the Viberation is distributed across a variety of regional US-based distributors.  In order for this device to succeed, it must gain more exposure through securing distribution, marketing, and innovation.  Gaining distribution brings the Viberation to consumers that shop in bricks and mortar stores, or online.  Marketing efforts educate the consumer on the product benefits and its unique selling proposition (great-tasting carbonated beverages without a separate CO2 device).  Innovation makes meeting the consumer needs paramount with more flavors and assortment.  All three could end up being done through collaboration.  With a branded player (ie Starbucks? Dr Pepper Snapple Group) helps increase its reach, awareness, and appeal.

SodaStream’s main challenge appears to be part of its business model: carbonation cylinders.  With the competition’s ability to carbonate a beverage without any CO2 tanks, the Israeli-based company is facing an uphill battle to innovate.  Despite their recent marketing efforts at the SuperBowl to gain worldwide exposure, their growing stable of branded syrups, and their international distribution, the product still requires customers to invest in purchasing a CO2 device.  As the market shifts toward “all-in-one” devices, SodaStream’s may need to develop an at-home carbonation unit that can brew soda without a CO2 cylinder.  One of the core challenges SodaStream now faces is understanding whether their business model is still viable given the competitive landscape.  The C2 cylinders is a lucrative revenue stream, but it is also the barrier toward their adoption with more home-brewing appliances available.

The CO2 cylinder presents a great revenue source for SodaStream, but is also prevent fast product adoption. Sourced from coolest-gadgets.com.

Coca-Cola’s partnership with Keurig brought greater attention to this product segment.  Distribution and innovation likely are not challenges for the world’s largest beverage manufacturer.  In fact, these areas exist as its core strengths.  Keurig Cold will have the ability to not only brew Coca-Cola carbonated drinks, but also produce teas, sports drinks, juices, and a host of other Coca-Cola-manufactured beverages.  Marketing may actually be where Coca-Cola’s Keurig Cold device sees the biggest challenge.  The majority of their marketing dollars still reside with bottled beverages, and intensely promoting Keurig Cold will cannibalize their sales.  Another marketing challenge would be Coca-Cola’s ability to create the demand for beverage format when their bottled format is so successful and widely available.  Similar to Kraft MiO entering the liquid enhancers space first and Coca-Cola following, SodaStream pioneered the at-home carbonation space.  The challenge for Coca-Cola within liquid enhancers is not their product assortment, but their marketing efforts to create the demand for the liquid enhancer form of their beverages.  Coca-Cola beverage pods may endure the same fate as their liquid enhancers: broad assortment and distribution but limited marketing funds preventing the product line from reaching its full potential.

Pepsi’s Bevyz partnership will release an at-home carbonation unit to the market sooner than Coca-Cola.  The Pepsi Bevyz Fresh Machine was launched in the U.S. this past May.  Despite first-mover advantage, one of their core challenges appears to be marketing.  The market has not heard of Bevyz, and the majority still do not know Pepsi has developed an at-home carbonation unit.  While the product’s distribution and innovation are strengths, the marketing aspect seems to be the most significant barrier to overcome.  Despite the product’s versatility to carbonate beverages, produce teas, juices, and waters, and even serve as a water cooler, consumers are simply unaware of this machine.  Check out their 2011 Bevyz in Action video below.  Pepsi has been slow to react when Coca-Cola moved first in other spaces, such as in liquid enhancers and intelligent fountain units.  If Pepsi continues to think methodically before acting, they may stand to lose more ground to Coca-Cola and other competitors.

Each competitor faces their own challenge within this home-brewing beverage space.  Roadblocks toward growth include marketing, distribution, and innovation – it just depends on your business stage.  What is certain is more organizations are dedicating resources to small home appliances to help consumers make their own beverages.  This in turn helps the segment approach critical mass toward being available in every consumer’s kitchen counter space.

Advertisements

Diet Coke Reverts to “Just for the taste of it!”

Image courtesy of ispot.tv.

Diet Coke has changed their slogan – again.  After rolling out “You’re On. Diet Coke.” recently and receiving a lot of criticism, they have changed it back to “Just for the taste of it!”  It appears that the weight of the media backlash was too heavy to bear.  Diet Coke’s marketing executives acted once the slogan attracted continued negative publicity, necessitating a change and dissociation from this negativity.  Click the link to see new commercial below, where there is no visible reference to a Diet Coke slogan – only a verbal reference.

Going back to the “Just for the taste of it!” slogan is an interesting choice, seeing that they have returned to this slogan three other times.  This slogan launched alongside Diet Coke’s introduction in 1982, and was subsequently resurrected in 1986, 1995, 2006, and now 2014.  Seems like other Diet Coke slogans just don’t have staying power like the original.  The “Just for the taste of it!” turns the attention back to taste and calories.  No focus on drugs – cocaine or aspartame.

In a time when all brands try desperately to manage their image – especially across social media – returning to the basics is necessary.  Even as Diet Coke has worked hard to establish a strong image as a lifestyle beverage with slogans like “Stay Extraordinary” or “You’re On”, solidifying its foundation remains critical.  Beyond all the dreams and aspirations, it must continue to deliver on the “brand promise” of a great-tasting sugar-free soda.  With this latest debacle, here’s hoping that Diet Coke has indeed learned its lesson.  As soda became linked with obesity and aspartame became linked with adverse health effects, some of Diet Coke’s campaigns veered off course to defend against these claims.  Other Diet Coke campaigns focused on establishing a strong image outside of its product attributes.  Both these types of campaigns made the brand less tangible and may have led people to forget what Diet Coke truly stood for.  And it certainly opened the door for criticism by marketing bloggers like myself.  A re-dedication to its core is essential in reviving Diet Coke.

While no publicity is bad publicity, the staying power of this bad publicity mattered more.  A couple years of advertising the new-old slogan of “Just for the taste of it!” should help re-establish Diet Coke’s image of a great-tasting sugar-free drink.  Who knows, it could be the right time to expand as a lifestyle beverage  at that time.  Diet Coke just needs to find the right balance of their image of being a great-tasting drink and being a lifestyle drink.

Starbucks Brings Teavana Into Coffee Shops

Starbucks baristas now brew Teavana ice teas for Starbucks locations. This is the start of a
Starbucks baristas now brew Teavana ice teas for Starbucks locations. This is the start of a “shake up”. Image courtesy of http://www.ispot.tv.

Not sure if anyone has noticed the latest Starbucks commercial.  The coffee giant is now featuring their Teavana shaken iced tea as a summer drink.  Why is this important?  This TV commercial shows Starbucks baristas making the beverage, and showing the ice teas as available within Starbucks locations.  This is different from their initial strategy for Teavana.  The Seattle-based coffee company stated that Teavana operations would be completely separate from Starbucks, and increase the Teavana standalone locations.  While they continue to open Starbucks and Teavana locations, is bringing Teavana-branded offerings under the Starbucks locations the right thing to do?

Starting with the recent Oprah collaboration, Teavana products have increased exposure within Starbucks locations.  Beyond the handcrafted Oprah products, Starbucks customers would start seeing Teavana tea packages and mugs available for sale.  It certainly looks like the bringing Teavana-branded beverages into Starbucks locations will help increase Teavana’s exposure.  This cross-branding effort strengthens the Teavana brand and opens up more possibilities for Starbucks.  While Starbucks had always served iced teas within the retail establishments, they were never branded.  This changes as they now brand them under Teavana.  The coffee giant has the platform to brand a variety of beverages within their retail locations.  Starbucks has built up Teavana and Tazo for tea, Evolution Fresh for juices, Ethos for bottled water, and Clover for premium coffee.

With more Teavana locations opening up, this provides Starbucks with greater opportunities.  Though the strong smell of coffee may prevent it from being brewed inside a tea establishment (likely the same reason that Starbucks locations only serves Teavana iced teas), water and juices could be strong candidates for increased distribution.  Ethos and Evolution Fresh may only require a cooler for refrigeration and do not emit strong aromas like coffee or tea.

Starbucks’ acquisition of Teavana came with retail locations that created potential scale for the beverage organization.  Now we can clearly see how cross-promotional opportunities exist between Teavana and Starbucks.  As Starbucks has also supported Evolution Fresh in standalone locations, it is highly likely that the organization’s continued expansion will involve Starbucks or Teavana products within Evolution Fresh juice stations as well.

Here’s the Starbucks Teavana ice tea commercial called “Shake Up”.  Though the commercial itself is simple and showing baristas creating Teavana iced teas, the name could be symbolic.  Starbucks continue to position itself to “shake up” the beverage landscape.

Backed By Popular Dewmand Reaches Canada

Mountain Dew Canada brings back Code Red, White Out, and Supernova for Backed by Popular Dewmand Canada.  Courtesy of facebook.com.
Mountain Dew Canada brings back Code Red, White Out, and Supernova for Backed by Popular Dewmand Canada. Courtesy of facebook.com.

It looks like Pepsi likes to recycle American promotions for the Canadian market.  Mountain Dew had used the “Backed by Popular DEWmand” promotion to resurrect popular discontinued flavors, and are now running this campaign in Canada.  Following in the success of Voltage winning the first Canadian DEWmocracy, Code Red, Supernova, and White Out are now returning to store shelves until early August.  Like the original DEWmocracy campaign, consumers vote and choose which flavor they’d like to remain available after August 2014.  No mention on whether the winning citrus soda will become a permanent beverage in Canada.  However, if the 2013 promotion was any indication, there is a strong chance another flavor will join their current beverage line-up come September.

Intelligent move by Pepsi Canada’s Mountain Dew to follow the American playbook to introduce a new product.  The DEWmocracy campaign from 2013 may have generated a surge in sales that would have made it difficult to match in 2014 without any promotional activity.  Repeating DEWmocracy in the following year risks tiring out the Mountain Dew consumer with identical consumer promotions.  Enter the 2014 “Backed by Popular DEWmand” promotion.  The DEWmocracy campaign equity is extended to the current year through the “Backed by Popular DEWmand” campaign without risking promotion fatigue.  Loyalists that previously chose Code Red, Supernova, or White Out can now re-engage with these flavors and vote for their preferred flavor.

The beverage brand also reaps another benefit by indirectly repeating this campaign.  Beyond the voting process, Mountain Dew can further understand the Canadian consumer’s taste preferences.  The four flavors from last year – Voltage, Code Red, Supernova, and White Out – were carefully selected to see which ones would appeal most to Canadians.  While Voltage (raspberry-citrus) was the most popular, Code Red (cherry) placed a close second.  Code Red has been produced by Mountain Dew USA since 2002 and was considered one of the brand’s most successful flavor extensions (via the Mountain Dew wikipedia page).  Based on this information, it is certainly worth giving Code Red another chance in the Canadian market.

Mountain Dew Canada brings back Code Red, White Out, and Supernova for Backed by Popular Dewmand Canada.
Mountain Dew Canada brings back Code Red, White Out, and Supernova for Backed by Popular Dewmand Canada.  Courtesy of facebook.com

With all the focus and support behind the Mountain Dew brand in the U.S., it certainly makes sense for the Canadian team to receive some additional.  Even if Code Red does not win this year, the citrus soda company may return again next year with four new flavors – possibly the Taco Bell Baja Blast flavor.  Once again, great marketing campaign that engages with the brand’s fans that also provides valuable benefits to the beverage.