Vegetable Beverages Hitting Mainstream

Gatorade Lime CucumberWould you drink a cucumber lime-flavored Gatorade?  How about blueberry mint-flavored water?  An article on Beverage Industry on emerging beverage trends claim that vegetable-flavored beverages are increasingly popular because of their “healthy halo” (article link here).  With everyone focusing on healthier options, it makes sense that vegetable flavors reach mainstream status and consumers seek to take in more vegetables.  After all, berry and other fruit-flavored beverages can only deliver so much momentum.  That said, the article describes that consuming a vegetable-only flavor is still in uncommon and many beverage options are a combination of both vegetables and fruits.  How will this particular flavor trend impact beverage makers?  Will these drinks ever reach a level of popularity to take down mainstream colas, juices, or waters?

Beverage manufacturers constantly monitor flavor trends and Pepsi has locked into this trend since 2011, when they launched a Cucumber Lime flavor under the Gatorade franchise.  Pepsi Japan’s limited-time releases of Pepsi Shiso and Pepsi Ice Cucumber also proves this point.  Since most (if not all) beverage organizations monitor consumption trends, it would not be surprising to see manufacturers build momentum and launch more vegetable-infused variants over the next few years.  It just needs to make its way into the North American market.  And this is beginning to catch on more in the U.S.; research firm Mintel tracked over 100 U.S. beverage innovations with vegetable or vegetable-fruit flavors launching in the past year, representing a 20% increase from 2013.  It still stands to be seen whether these vegetable-flavors will launch under the most popular and mainstream beverage lines like Gatorade, Coke, and Pepsi or launch under emerging beverage brands.  No matter the case, any approved product launch puts sales pressure on other items to perform or risk losing the shelf space.  This flavor trend may not have been successful replacing other products’ sales to justify shelf space though it looks that will soon change.

On the topic of reaching critical mass to take down mainstream product categories, it doesn’t look promising.  This isn’t to say that vegetable-flavored beverages will not reach mainstream status themselves, just that it will not overtake other mainstream categories.  For one, this is a flavor trend that integrates the product under a specific beverage segment; it is not a standalone beverage category in itself.  Consider these vegetable-flavored products to pattern after  Campbell’s V8 juices or Bolthouse Farm smoothies, where they represent a growing portion of a drink category (juices and smoothies, respectively) but are not large enough to overtake juices as a whole or smoothies as a whole.  Regardless, these healthier options will compete aggressively for retail shelf space alongside other beverage options.

Image courtesy of foodbusinessnews.net
Image courtesy of foodbusinessnews.net

The Beverage Industry article also describes other beverage flavor trends, include a growing preference toward sweet and spicy combinations.  Consumers increasingly look for flavors that will satisfy multi-sensory experiences.  Some examples include chocolate gojuchang tea (gochujang is a Korean spicy sauce),  spicy ginger mango juice, and mango jalapeno water.  So be on the lookout, soon enough you’ll see more cross-flavored beverages on store shelves.  Be in sweet and spicy or vegetable-fruit flavored, it will sound exotic but your taste buds and your body will thank you for choosing that over another drink.

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5-hour Energy’s Quest for New Growth

The 5-Hour Energy Shot Line-up
The 5-Hour Energy Shot Line-up

It seems that the craze over energy shots have died down since 2012 and left 5-Hour Energy as the last company standing.  That shouldn’t be a surprise since existing consumers were fiercely loyal to the brand, to the extent that offerings from energy stalwarts like Red Bull and Monster failed to sustain sales in this segment.  After winning the battle for energy shot supremacy, 5-Hour Energy still faced challenges toward reaching a wider array of consumers.  The energy shot manufacturer need to reach other demographics to continue growing.  That spawned line extensions to reach women, as well as sampling events to reach seniors. This past summer, the company ran a “Yummification” campaign to leverage 5-Hour Energy as a mixer (BevNet’s Ray Latif has an in-depth look at the campaign here).  While all companies have growth barriers, what has 5-Hour Energy done differently to overcome these growth challenges?  And beyond its success, what other opportunities exist for them in the foreseeable future?

It would appear that targeting women and seniors are components of an overarching 5-Hour Energy growth plan, and the strategic objective is to increase consumption.  Reach new demographics isn’t all that different from what other companies do, so catering to women and seniors are not all that unique.  What is unconventional is their “Yummification” campaign.  5-Hour Energy recognized that taste was a blockage that would not be solved despite their efforts to highlight product benefits.  The “Yummification” campaign leveraged fans’ creativity in a contest to create recipes for mixing 5-Hour Energy with other beverages (mainly non-alcoholic ones) to lessen the medicinal taste.  As a side benefit, this contest required submissions through YouTube helped generate a lot of media exposure.  Beyond media impressions, the campaign showcase new usage occasions for 5-Hour Energy.  Contest submissions advertised concoctions to refresh the user during athletic training, waking up, and gaming among many others.  Athletic training, waking up, and gaming are occasions typically paired with other refreshments, such as sports drinks, coffee, and juice & water.  Energy drinks – let alone energy shots – seldom enter the conversation as refreshments during these times.  However, it looks like that will change following the success of their “Yummification” campaign.

5-Hour Energy's Yummmification Contest.  Courtesy of blog.5hourenergy.com.
5-Hour Energy’s Yummmification Contest. Courtesy of blog.5hourenergy.com.

Beyond the campaign’s success, it seems 5-Hour Energy has uncovered business opportunities that they were previously unaware of.  Serving as an ingredient as well as a standalone product gives them many more opportunities to sell itself.  Beyond the regular activities to feature the product as a strong standalone product, mixing the shot with other beverages now gives 5-Hour Energy many cross-promotion and marketing opportunities.  5-Hour Energy could try securing displays in the juice aisle to forge a stronger bond with the juices that could be mixed with their product.  Or secure displays in the coffee aisle to convert or steal coffee consumers.  Regardless of displays or other in-store activation tools, many opportunities have emerged to continue delivering growth momentum.

Judging by the potential that this campaign could provide to 5-hour Energy, it’s a surprise it took them so long to come up with it.  It may be the fact that the segment was riding a hot growth trend that nullified the need for marketing support.  Or that negative media surrounding energy drinks required more immediate attention than developing a sustained growth strategy.  Whatever the case, the campaign has now happened and translated fantastic success.  The one downside is that the campaign won’t be repeated, as said by Brandon Bohland, a special markets manager at the company.  Which means that the recipes submitted for the campaign are the only ones that will exist for the foreseeable future, until 5-Hour Energy creates other contests calling for recipe creations.

Visit 5hourenergy.com/yummification to see the videos and recipes for their Yummification contest.

U.S. Cola War Continues with Pepsi True Launch

Pepsi True

It seems the Cola Wars continue to expand across the calorie spectrum.  Where Coke and Pepsi used to spar over full calorie soda (Coke vs Pepsi) and zero-calorie soda (Diet Coke vs Diet Pepsi, Coke Zero vs Pepsi Max), the two beverage giants now go to war over the middle.  The contestants are Coca-Cola Life and Pepsi True, two sodas sweetened with sugar and stevia, with less calories, and green packaging.  That may be where the similarities end in this round though, because this iteration is very different from prior rounds.  Their product launch tactics differ greatly, and this particular fight appears to be highly contained with the United States.

What some people may forget is that Pepsi already has a stevia-sweetened mid-calorie soda on the market – just not in the U.S.  Remember Pepsi Next?  The American Pepsi Next contains artificial sweeteners whereas other countries with Pepsi Next have a stevia-sweetened version.  Unless Pepsi decides to discontinue the existing stevia-based Pepsi Next everywhere, this Cola War will only exist in the U.S.  And it is likely that the Pepsi True launch is primarily relevant to Americans given Pepsi Next’s presence elsewhere.  So in effect, this should be termed more of a Cola “battle” rather than a Cola “War”.  Pepsi Next against Coca-Cola Life in markets outside the U.S., while the U.S. battle will be between Pepsi True and Coca-Cola Life.

Related Post: Pepsi Next May Find More Success in Canada

Both companies are also more cautious in their launch approach.  Coca-Cola Life has experimented in multiple countries outside the U.S. first to measures its market viability, and only recently started rolling out in U.S. regions this past August.  The American rollout isn’t national and they have yet to provide marketing support welcoming Coca-Cola Life to America.  Pepsi True is taking a similarly conservative approach by not even stocking this product in traditional channels.  Pepsi’s mid-calorie soda variant is set to launch exclusively through Amazon, where shelf space is limitless, operating costs are lower, and product delivery does not come from their distributor network.  After all, Pepsi distributors work with limited storage space and a delivery system optimized for sales and profitability; carrying Pepsi Next could mean sacrificing sales of other better-selling products.  To satisfy American distributors, Pepsi indicated that they will reimburse distributors for Pepsi True sales in their regions.

Related Post: Coca-Cola Life Commercial Review: Open Your Good Nature

It makes sense for both beverage manufacturers to take baby steps first.  Launching anything in the mid-calorie segment has been challenging for over a decade.  The 2004 introductions of C2 and Pepsi Edge marketing sucralose as a sugar alternative proved unsuccessful.  The 2012 Dr Pepper Snapple Group TEN-calorie soft drink line-up hasn’t received marketing support to keep up its launch momentum.  Earlier this year, Coca-Cola’s vitaminwater reverted back to its original formula after consumer complaints about its stevia formula.  The beverage industry’s history is littered with more failures than successes when companies attempt to bring mid-calorie refreshments to the consumer.  And as much as Pepsi Next could be deemed a global success, the results undoubtedly vary between markets.

Going forward, the road will only become more difficult.  Consumer perspective toward mid-calorie soda in general has not been overwhelmingly positive.  Taste is always the first consideration and most stevia-sweetened beverages contain a bitter aftertaste.  Consumers have also persisted in choosing drinks that offer health benefits and less calories over mid-calorie soda.  Regardless of consumption trends, soft drinks are still a significant part of the beverage landscape.  Even though the Cola War has evolved, both Coca-Cola and Pepsi will find new frontiers to wage their battles.