Sparkling ICE Comes to Canada

Sparkling ICE's flavored water line-up.  Will all 11 flavors come into Canada through Sun Rype?
Sparkling ICE’s flavored water line-up. Will all 11 flavors come into Canada through Sun Rype?

Two West Coast companies are joining forces to introduce Sparkling ICE to Canadians.  Sun Rype, a Kelowna-based manufacturer and distributor of beverages and snacks, will become Sparkling ICE’s exclusive Canadian distributor.  Through Sun Rype’s network, the Washington-based flavored water brand gains access to Canadian grocery, drug, and convenience channels.  Both organizations have described this arrangement as a strong strategic fit that makes sense for their respective companies.

Kevin Klock, CEO of Talking Rain Beverage Co., parent company for Sparkling ICE says:

“Canada is a critical first step in our strategic plan to make Sparkling ICE an international brand, and we are thrilled to find a partner like SunRype who aligns seamlessly with our brand message and goals.  We are confident that Sparkling ICE’s brand proposition of bold flavors and zero calories, combined with a best-in-class distribution partner like SunRype, will spell success in Canada.”

Dave McAnerney, CEO of Sun-Rype Products Ltd. explains why this will become a successful joint venture:

“In the highly competitive Canadian beverage market, we are seeing a real trend toward zero calorie, lightly carbonated beverages.”

After securing a strong position in the domestic U.S market, expanding into Canada marks a logical next step in Sparkling ICE’s evolution.  With so many similarities between the two countries, making Sparkling ICE available in Canada certainly solidifies their North American presence.  Another question that may have to be decided is whether the brand makes its entire product line available in Canada.  Beyond 11 flavored of zero-calorie water, the brand also offers 6 lemonade options and 3 iced tea options.  As Klock suggests, this would only be the first step toward building up Sparkling ICE as an international success.   In order to make Canada a true success they should make all products available.  Let consumers vote with their wallets and decide what flavor and product they prefer.  Like many other markets, Canadians would prefer zero-calorie beverage options so long as taste and value are not marginalized.  If Sparkling ICE is truly success in Canada, it gives the company a successful launch case study to implement across other markets.

A subset of the products that Sun Rype manufacturers and distributes in Canada.  Soon, Talking Rain's Sparkling ICE beverages will be distributed by Sun Rype in Canada.
A subset of the products that Sun Rype manufacturers and distributes in Canada. Soon, Talking Rain’s Sparkling ICE beverages will be distributed by Sun Rype in Canada.

For Sun Rype, distributing Sparkling ICE makes perfect sense.  The Kelowna-based company is well-respected and already brings healthy beverages and snacks to Canadian retailers.  Their product assortment gives them experience in dealing with retailers across multiple healthy food & beverages categories, from juices to portable snacks.  Having another healthy refreshment in their portfolio to offer retailers doesn’t hurt, especially one that has phenomenal year-over-year sales results to support it.  Sparkling ICE is a brand that has won recognition as a best new product, and has seen substantial sales growth in the U.S. the past few years.  Selling it to retailers should be less challenging than selling other products that have less awareness or public recognition.

It’ll be interesting to see what Sun Rype and Talking Rain do to bring Sparkling ICE to Canadian retailers and consumers alike.  Success for the zero-calorie flavored water brand in Canada may not be a question of “if” but a matter of “when.”  Their future success hinges on the support that both organizations provide.  With both organizations suggesting the arrangement to provide strategic benefits, you can bet that Talking Rain and Sun Rype will be paying alot of attention to ensure Sparkling ICE wins in Canada.

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Kenzo Designs evian’s 2015 Collector Bottle

evian+Kenzo 2014 designer water bottle.  Courtesy of thedieline.com
evian+Kenzo 2014 designer water bottle. Courtesy of thedieline.com

Every year evian releases a limited edition glass bottle designed by a fashion house.  This year is no different, with evian and the French fashion house Kenzo joining together to release their 2015 limited edition designer glass bottle.  This year’s bottle design features a wavy zig zag pattern in purple and yellow print.  Via popsop.com, Kenzo’s creative directors Carol Lim and Humberto Leon, describe the wavy pattern as the French Alps (purple lines) and the mountain spring water (yellow lines).

Including Kenzo, this marks the eighth year that evian has partnered with fashion designers to launch premium collectible water bottles.  Starting with Christian Lacroix in 2008, evian has also partnered with Jean Paul Gaultier (2009), Paul Smith (2010), Issey Miyake (2011), Andre Correges (2012), Diana von Furstenberg (2013), and most recently Elie Saab (2014).

evian's designer bottles throughout the years, startingn with Christian Lacroix (far right) to Kenzo (far left).
evian’s designer bottles throughout the years, most recently in 2015 with Kenzo (far left).  evian began their fashion partnership in 2008 with Christian Lacroix (far right).

It seems that evian has really carved out a niche for themselves with these collectible bottle designs.  Consumers interested in fashion or otherwise (myself) anticipate the launch of these bottles and pick up a few of them.  After missing on first few bottle designs, I’ll be adding the Kenzo glass bottle to my collection this year.

Here’s some more photos of the Kenzo evian glass bottle design.

evian's 2015 collectible glass bottle, designed by Kenzo.  Courtesy of popsop.com
evian’s 2015 collectible glass bottle, designed by Kenzo. Courtesy of popsop.com
evian's 2015 collectible water bottle, designed by Kenzo.  This one appears to be a plastic bottle.  Courtesy of popsop.com
evian’s 2015 collectible water bottle, designed by Kenzo. This one appears to be a plastic bottle. Courtesy of popsop.com

Coca-Cola’s Reply to SodaStream: Keurig Cold

Courtesy of nytimes.com

Most people by now may have heard of Coca-Cola purchasing an investment stake with the makers of the Keurig machines – Green Mountain Coffee Roasters (GMCR).  For those that haven’t, there’s some quick information from the New York Times here.  As a result of this deal, Coca-Cola appears to be making its first foray into small home appliances and endear itself more closely with consumers.  Experts have called this a great deal for both companies, providing each with mutual benefits.  But is this really the case where both companies benefit?  And what about other companies, should companies like Pepsi, SodaStream, or Starbucks be concerned?  Let’s take a quick look, first at the participating companies and then toward the others that are potentially affected.

For GMCR, this is partnership born out of necessity that will secure their footing in the single-serve beverage marketplace.  Following 2012, Green Mountain’ single-pod (K-Cup) cup patent expired and paved the way for other manufacturers (namely store brands) that could make these beverage pods cheaper.  To ensure survival of this increasingly rich revenue stream (more than two-thirds of the company’s revenues come from these pods), GMCR took to forming licensing agreements.  Coca-Cola was added to a licensing roster that already includes Starbucks, Lipton, Snapple, Timothy’s, Kahlua, and many more.  With a Keurig machine that produces single-serve hot beverages and now one that can product single-serve cold beverages, Green Mountain has certainly done well to ensure its survival.  With Coca- Cola’s reach across the consumer distribution channels, the Keurig machine will see dramatic business growth over the course of their 10-year pact.  Think of what Coca-Cola has done for beverage brands like evian, Monster, and vitaminwater.  An even better scenario would be signing Pepsi to a licensing agreement as well, which will further increase the Keurig’s machine placement among households and strengthen their dominance in making branded single-serve pods.

With Coca-Cola, this is a partnership that further segments the beverage landscape, and answers competitive pressure from new entrants to the ever-changing beverage market.  Coca-Cola is undoubtedly answering SodaStream’s “Sorry Coke and Pepsi” campaign about how the global beverage manufacturer is creating waste through its plastic bottles.  With single-serve pods and small home appliances, Coca-Cola is able to compete in a position similar to SodaStream – providing carbonated beverages at home without the need for plastic bottles.  And Coca-Cola now has an opportunity to exist on the counter shelf within the household, in addition to the refrigerator, pantry and garage.  Think about the ability to remind the consumer to consumer or purchase your product when your products are so pervasive within their household.  The next step to success for Coca-Cola may be investigating opportunities to leverage Coca-Cola Freestyle (create your own beverage mix) with the Keurig Cold, building on consumer insights to provide custom combinations and offer exclusive flavors “voted” by consumers.

Courtesy of belloblog.com. Scarlett Johansson stars for SodaStream’s 2014 SuperBowl spot – “Sorry Coke and Pepsi”.

For SodaStream, this marks their inclusion into the Soda Wars that has primarily existed between Coca-Cola and Pepsi over the past few decades.  If you keep on making eye-catching commercials targeted against the beverage conglomerates, they are certain to pay attention and respond.  This may be detrimental to SodaStream given the extra competition toward securing household counter space, but it also calls for innovation and a return to focus on the product benefits.  SodaStream’s foundation is still their ability to make soda at home, less expensive and without the use of plastic bottles.  Similar to GMCR, SodaStream must innovate and work to secure more licensing agreements.  Beyond Kraft and Ocean Spray, SodaStream may also work to sign on other brands such as Pepsi, Dr Pepper, and many more.

Now that Coca-Cola has invested into single-serve pods, it’s almost certain that Pepsi will respond in some way with their own pod offerings.  They responded in the past to Coke Zero with Pepsi Max and Dasani Drops with Aquafina FlavorSplash, amidst a host of other gap-filling products.  Pepsi surely won’t allow Coca-Cola to dominate the consumer’s counter space when their own offerings are just as robust, so it will only be a matter of time before Pepsi take the Soda War to the small home appliance.  The question is when and with whom.

The dark horse in all this may actually be Starbucks.  Starbucks had trademarked the name “Fizzio” with the intent to produce their own carbonated beverages.  To expand on their own burgeoning beverage empire, Starbucks may need to move up the deadline for when the Fizzio will be launched, or partner more closely with GMCR to serve both hot and cold single-serve beverage pods.

This news of Coca-Cola and Green Mountain Coffee Roasters signing a 10-year agreement has certainly created ripples across the industry.  The impact that has yet to be fully fleshed out with retailers as well, and that itself will be another article in the coming weeks.

evian Replaces Coca-Cola With Red Bull

Courtesy of designtaxi.com
Courtesy of designtaxi.com

It appears that Coca-Cola and evian have both outgrown their distribution partnership.  Come July 2014, Coca-Cola will stop distributing evian waters (read the full story here).  Consequently around that same time, some U.S. cities may see evian being distributed off Red Bull delivery trucks (that story found here).  While Coca-Cola & evian describe the agreement’s termination as an opportunity to refocus on their core businesses, it may simply be Coca-Cola wanting to re-focus on their own water brand as smartwater continues to build sales.  With this adjusted partnership, who wins and who loses?  Coca-Cola, evian, or Red Bull?

It would seem that Coca-Cola is constantly looking at ways to ensure delivery truck space is stocked with as much Coca-Cola-owned refreshments as possible.  Coca-Cola appears to be re-evaluating all their distribution agreements in order to locate new growth opportunities.  It was only two years ago in 2012 that Coca-Cola ended a distribution agreement with Nestea to focus their attention on Fuze – which so far has left consumers upset since Nestea is not as broadly available.  Fuze also appears to have failed to expectations given consumers still prefer Nestea.  Has Coca-Cola been supporting Fuze with the appropriate level of marketing?  This indicates that while in-house products (Fuze, smartwater) may offer better profit margins, licensed products (Nestea, evian) may perform better given a stronger sales record (that was built with Coca-Cola’s distribution network).  Will Coca-Cola look to remove Monster Energy from their distribution infrastructure as well?  While smartwater may have stronger sales than Fuze, the question remains whether smartwater will be able to outperform evian.  If smartwater outsells evian, then Coca-Cola would have benefited from the distribution change-up.  The same logic would apply for all other products that Coca-Cola distributes.

For evian, this change comes at a time when the company is in the midst of introducing new product packaging.  The fact that the premium water brand needs to revitalize their packaging to stay competitive is disheartening.  This is a sign that evian must re-align some aspects of their product (this time it’s the packaging) in order to re-communicate the product benefits to the consumers.  With distribution changes occurring simultaneously, the impact is amplified and more detrimental. Consumers looking to repurchase evian waters may find fewer selection in addition to not recognizing the 14-year-old evian plastic bottle.  Retailers may be less confident in evian, observing so much change in such a short time.  However, Red Bull is a strong partner and is building up their own distribution network.  With the partnership agreement ending in July 2014, this still gives evian a little time to build more infrastructure to replace Coca-Cola’s footprint.  evian appears to be disadvantaged in this new arrangement, given the fragmented nature of their distribution system.  Even if evian could establish the same footprint as before, they still must compete against smartwater for shelf space given the opposite sales trends of these two premium water brands.  Still, evian is part of The Danone Group and would be able to leverage the strength of their yogurt distribution network.  Possibly weaker distribution, but evian should be none the worse off.

Courtesy of asiantrader.biz
Courtesy of asiantrader.biz

For Red Bull, this is an opportunity for them to improve their business through new opportunities.  While their innovation track record outside of energy drinks has been poor, the sales of their energy drinks has been steady and growing.  The fact that the energy drink manufacturer has returned to their roots among product innovation, they have also been creative to find new revenue-growing opportunities.  This is where distribution becomes that great growth opportunity.  As they deliver energy drinks to their retail customers, they can now satisfy more of the retailer’s beverage needs by bringing them evian as well.  While evian is the first manufacturer to explore product delivery through Red Bull, there are other product manufacturers that may leverage Red Bull’s distribution infrastructure in the future.  If Red Bull can expertly manage the evian distribution relationship and help the premium water brand regain sales momentum, then Red Bull stands to have many other growth opportunities in the future.

It would appear that Red Bull and Coca-Cola have more upside than evian in this new arrangement, but upside nonetheless.  It would also be important for other beverage manufacturers to take notice of what is happening here.  Would evian be better off approaching Pepsi to see if they can leverage a partnership with them?  And if you’re Monster Energy, this offers short term gains with more truck space.  Question is, will Coca-Cola one day end their distribution agreement to focus on Nos and other Coca-Cola owned energy drinks?

Coca-Cola Expands “Official” Olympic Drink Portfolio

Courtesy of eprize.com

It’s another year for the Olympic games, this time in Sochi.  For Coca-Cola, every Olympic year is a boon based on the event partnership agreement where they hold the distinction of official Olympic non-alcoholic beverage partner.  As one of the Olympics’ global partners, the beverage giant pays about $100M to monopolize non-alcoholic beverage serving rights in all Olympic venues (other global partners hold exclusivity in their respective industries).  In recent years, the definition of “non-alcoholic beverage” has expanded to include more than just carbonated soft drinks.  Coca-Cola has gained exclusivity to serve sports drinks (Powerade), juices (Minute Maid), and waters (Dasani, vitaminwater) over the past few Olympics games.  The “Olympic Wolrdwide Partner” logo has also started appearing on Coca-Cola’s ZICO coconut water brand lately.  So given the substantial cost, how beneficial is it for Coca-Cola to be a worldwide Olympic partner?  And with the expanded definition of “non-alcoholic beverage”, which product categories are next to gain Official Olympic product status?

Despite a cost of $100M each active Olympic year, Coca-Cola has renewed their Olympic partnership until 2020.  It would appear that this agreement delivers substantive returns.  For one, Coca-Cola has blocked out their global competitor in all product categories that the conglomerate participates in.  No Pepsi-branded soft drinks, Aquafina, Gatorade, or Tropicana can be served within all Olympic-event venues.  Brand visibility is another partnership benefit.  Every game or after-party event that becomes broadcasted will feature a Coca-Cola logo or Coca-Cola beverage product.  Live viewers and spectators may only celebrate with Coca-Cola branded products and nothing else.  Positive associations is another partnership benefit.  Spectators seeing their athletes win also see them hydrating themselves with Coca-Cola products.  These same spectators will associate hard work, performance, and winning all being supported by Coca-Cola.  From a qualitative perspective, these are invaluable benefits that Coca-Cola has been able to enjoy – reduced competition, brand visibility, and positive associations.

Courtesy of designyoutrust.com

With changing taste preferences among spectators and athletes alike, incorporating other product categories as “Official Drinks” certainly makes sense.  Some people will choose carbonated soft drinks, some will want flavored water, and still some people prefer juices.  With coconut water emerging as a beverage category, expansion to include this as an Olympic-approved beverage makes sense.  However, increased exposure of Olympic branding potentially cheapens the Olympic brand with broader availability on all products – not just beverages.  Furthermore, not all products will be suitable to display the Olympic logo on its packaging.  For example, energy drinks may be one category that could be denied Official Olympic product status given possible negative associations despite the category growth.  Within Coca-Cola beverage portfolio, it’s likely that liquid enhancers (Dasani Drops, Powerade Drops) and teas (Honest Tea, Fuze) could gain approval should they apply for it.  Both these categories are enjoying growth and have fewer negative associations portrayed by the media.

Coca-Cola has been one of many key sponsors that has supported the Olympic games through the years, and it appears that both parties are satisfied with the results.  2020 is still three more Olympic games away, but given the goodwill both parties have been generated, it’s very possible that this relationship goes well beyond 2020.

evian Designer Bottles Spur Imitators

evian Elie Saab designer bottle - courtesy of fashionfoiegras.com.
evian Elie Saab designer bottle – courtesy of fashionfoiegras.com.

For the seventh consecutive year, evian has commissioned famous fashion designers to design a limited edition bottle for them.  Following in the tradition of Issey Miyake, Jean-Paul Gaultier, and Diane von Furstenberg, Elie Saab has agreed to design a limited edition glass bottle for evian.  Saab’s unique patterns is described to depict a lace gown, which showcases the strong attention to detail and expert craftsmanship for both Saab and evian.

It appears that evian has forged a strong partnership between their premium bottled water brand and the fashion industry.  With seven consecutive years of unique glass bottle designs and no indication of slowing down, this has become an annual tradition that all beverage shoppers look forward to (this one included).  As all successful ventures spur imitators, it is very likely that other beverage brands will follow in evian’s footsteps by collaborating with artists and designers.  Diet Coke has commissioned Marc Jacobs to design a collectible bottle for them, specifically available in the European markets.  Prior to that, both Diet Coke and evian have both sought out a collaboration with Jean-Paul Gaultier for limited edition glass bottle designs.  And most recently Perrier got into the designer bottles with Andy Warhol collector glass and plastic bottles.  However, in trying to imitate evian, which beverage manufacturer has done it right and which hasn’t?

It seems that Diet Coke has done it right and Perrier has not.  The partnership choices with Marc Jacobs, Jean-Paul Gaultier and Andy Warhol are all great choices.  Despite being artists and designers in different industries (fashion and art), they all represent important facets toward artistic culture.  However, while Marc Jacobs, Jean-Paul Gaultier, and Elie Saab were commissioned to design the bottles in their current years, the Andy Warhol  bottles are a design from twenty years ago.  The difference is that what was current twenty years ago is not necessarily current today.  And the designs with Jean-Paul Gaultier and Elie Saab were a direct collaborative effort with the designers themselves, Perrier’s collaboration is with the Andy Warhol Foundation.

Beyond the design, the other major flaw in Perrier’s strategy has been its packaging itself.  A designer bottle must convey elegance and prestige, which will certainly exist for glass bottles.  Even aluminum cans can have this elegant property when designed properly.  Plastic bottles do not carry this trait.  Plastic bottles carry with it a notion that it changes the taste of whatever beverage it holds with it.  It also carries with it the perception that it was born out of a replacement for glass bottles.  In addition to glass and plastic, see the image below for the various sizes that Perrier has made their Andy Warhol collection available for purchase.  Despite the different product sizes and shapes that Diet Coke can be found in, the designer products were only limited to glass bottles and select aluminum cans.  evian created a special 750ml size for their designer glass bottle.  Neither made it available across their entire portfolio.  Once this has been done, it takes away the prestige factor because it’s not as scarce.

Courtesy of businesswire.com.  Perrier's Andy Warhol collector bottles - available in both glass and plastic.
Courtesy of businesswire.com. Perrier’s Andy Warhol collector bottles – available in both glass and plastic.

Perrier’s final flaw: distribution.  Not that Diet Coke showing up in grocery stores is any better, but the Perrier bottle has been found with the dollar channel.  Does this need any more explaining?  Collectible, and fashionable products rarely make its way to dollar channels or wholesale channels simply because of the channel’s image.  With Andy Warhol Perrier being found there, what does that do for the brand and the product?  I would imagine that it lowers its prestige and elegance.

In the end, it may only be a question of whether the Andy Warhol Perrier bottles actually helped Perrier sell more product.  However, the broader question may be whether this collaborative effort has actually been detrimental toward both Perrier and Andy Warhol.

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.

Lost in Translation: vitaminwater Canadian Promotion Goes Awry

vitaminwater's promotion blunder. Image courtesy of Metro through adweek.com
vitaminwater’s promotion blunder. Image courtesy of Metro through adweek.com

Over the last few weeks, glaceau vitaminwater have come under scrutiny for its under-the-cap promotion that spelled out the words “YOU RETARD” (story link here).  As a bilingual Canada nation that calls English and French as its national languages, certain words may not translate so well.  vitaminwater’s promotional intent was to put one English and one French word under the cap, with the consumer collecting the caps to make funny sentences.  Apparently the problem was that the English list of words and the French list of words were separately approved and no one thought of what the consequences should both words were combined.  These consequences were amplified given that the family finding these words were a special needs family.  Doug Loates (the dad) sent Coca-Cola a letter immediately letting them know of his displeasure toward their campaign and how hurtful it was to his family.  As you see from the letter (below), he has signed it as “an ex-Coke drinker” which likely means that they have lost a customer for life.

As the glaceau business unit goes into public relations defense, what can be learnt in this situation?  The obvious lesson is to develop stronger approval systems when running a bilingual campaign in Canada (as in any other nation with more than one national language). Ensuring that the correct message is not lost in translation is critical and avoids the company any negative PR and embarrassment.  If there was a business team that handles the French marketing and another team that handles English marketing, then these two teams must collaborate more closely to ensure each party is dialed in to what the other team is doing.  Ultimately the national campaign is approved by someone that manages both teams, so that executive should also be aware of the consequences.

Aside from focusing on the directly results of this campaign, one has to wonder why vitaminwater ran this type of a campaign in the first place.  If the intent was to stimulate sales by having beverage enthusiasts collect the caps to create words, is there a prize for the funniest word?  Or was it simply a game for instant gratification by combining words together?  I have not noticed any type of media promotion to build awareness or excitement for this campaign in either case.  vitaminwater may have fared better had they simply piggybacked off of Coca-Cola’s iCoke.ca loyalty program.  After all, with an existing infrastructure where consumers are already knowledgeable of the reward system, this would make it easier to achieve the campaign’s objectives.

The next time vitaminwater runs a marketing campaign that spans the nation, we’ll see whether they have truly learned their lesson.  Will it be regional promotions with stricter guidelines for English- and French-speaking provinces?  Or will it be the same problem?

Coke Letter by Doug Loates
Doug Loates’ letter to Coca-Cola on finding the vitaminwater bottle cap

what happened to vitaminwater?

vw+vw0 canada line-up courtesy of @vitaminwater_bc

Since the explosion of vitaminwater on to the beverage scene years ago, momentum appears to have subsided for the brand and enhanced waters.  It seems that a variety of market conditions has reduced excitement for vitaminwater to just another product on the shelf.  There are certainly more reasons behind the brand’s continued decline, but BevWire will detail three major contributing market conditions.  

Market Condition #1 – vitaminwater has benefited and been obstructed by being a part of Coca-Cola’s beverage family.  As highlighted briefly in an earlier post about Zevia, vitaminwater saw immense benefits from the Coca-Cola acquisition.  The enhanced water brand entered a broader distribution network that vastly improved the brand’s availability.  At the same time, their initial marketing strategy was to be driven by “consumer demand”, relying on key influencers to spread word for the product.  This type of demand ensured that consumers and retailers were willing to pay a premium, and made discounting less unnecessary.  However, as Pepsi’s Aquafina Plus (in Canada) and SoBe Lifewater (in the U.S.) kept on promoting at enormous discounts, vitaminwater was compelled to react.  Without their premium positioning, vitaminwater became just another brand in Coca-Cola’s portfolio that had to fight for promotional dollars.  And with Coca-Cola focused on growing its sparkling business of Red (Coca-Cola),  Silver (Diet Coke), and Black (Coke Zero), a host of beverage brands lost promotional funding.  After initial success in the Canadian market from 2007 to roughly 2010, the vitaminwater has slowly lost market visibility as advertising support shifted more to other Coca-Cola properties.

Evolution Fresh - courtesy of drinks-business-review.comMarket Condition #2 – shifting consumer trends and preferences, highlighted by more juice, tea and energy drink entrants.  Since 2010, we have seen more product releases coming out from the juice, energy drink and ready-to-drink tea segments.  Starbucks was a strong force that expedited this trend.  Their acquisitions of Evolution Fresh and Teavana, along with their Starbucks Refreshers product launch gave them greater market coverage and allowed them to capitalize on the consumer trends.  In energy, the big three of Red Bull, Rockstar, and Monster all had product innovations enter the marketplace.  And also some negative media attention that led to consumers increasingly purchase these products to find out what whether all the extra attention was merited.  With consumers increasingly empahsizing health benefits – and vitaminwater also paying attention to this with their vitaminwater zero production introduction – the natural benefits of juice and tea became top of mind.  Because vitaminwater was relatively less healthy than these other products in the emerging segments, consumers shifted their purchase dollars from enhanced waters to juices, teas, and energy drinks.

 

via forum.smartcanucks.ca – just one of many Aquafina Plus coupons. This one is a fairly reasonable 33% discount.

Market Condition #3 – retailers react to new reality of people’s purchase habits.  Following the economic recession (that some still think we’re in), many Canadians buying behavior has focused more intensively on price.  That is not to say that they are not willing to pay more, but the value-benefit equation is more influential of their purchase decision.  Retailers have long pressured manufacturers for price concessions and finally Coca-Cola gave in to price promotions on vitaminwater in 2010 – around the time its descent began.  What happened next was more price cutting by its competitors to maintain their own sales – Aquafina Plus discounts became much deeper than before.  Ultimately this leads to the current situation, which is reduced segment value.  Since vitaminwater is no longer the premium brand that it once was, retail support started to transfer to other segments.  Shelf space for vitaminwater was compromised, and sku rationalization also start to slowly creep in.

While these three conditions do not represent the entirety of why vitaminwater is losing steam, it summarizes what is happening.  There are both internal and external contributors.  However, all hope shouldn’t be lost on the segment itself.  More competitors will look to redefine the value equation because the market leader is down.  Bottled water sales itself is on the incline.  And other vitamin beverages like Karma, Activate, and even Rockstar Energy Waters look to carve out their own niche in the marketplace.  Liquid enhancers such as Dasani Drops, Kraft MiO, Crystal Light Liquid are also seeing sales gains too.

Just wait to see how vitaminwater will react to the competitive pressure and what they might do to revive the one-time darling of the beverage industry.

MiO Sport: Fit For Any Occasion

Courtesy of funnycommercialsworld.com
The office worker is now a basketball celebrity.  Courtesy of funnycommercialsworld.com

MiO Sport is Kraft’s latest innovation in their liquid enhancers Canadian product line (MiO Fit is what is introduced in the U.S).  While the product has been available since their February 2013 Super Bowl ad, they had not implemented any video promotions in Canada.  Until now.  Re-positioning the product as “MiO Sport”, they have released two commercials to talk about MiO Sport in the Canadian marketplace.

Here’s the MiO Sport commercial “Swish” from early May 2013:

It doesn’t take long for the viewer to guess what is being advertised in these commercials.  Notice that neither of these commercials mentioned anything about it “changing everything?”  It is because they have already educated the consumer on what MiO is and how to use it; the video itself implies that MiO Sport changes everything.  The next step is to show different situations to use MiO Sport.

With regard to the Swish commercial, the commercial follows the same structure as their previous MiO ad spot.  The original video was based in an office setting and featured the same office guy.  Every time the scene cuts from one person talking to another person, something changes.  This commercial’s ultimate message is very similar to the original MiO video: squirting MiO Sport into your water changes everything.  And then you see all the crazy situations of how this regular office worker (definitely not athletic) transforms into an outrageously successful basketball player.  It’s so over-the-top that its believable.  MiO Sport is not advertising that squirting MiO turns you into a successful athlete, rather it is making fun of it.  And that keeps with the brand’s personality.

And here’s their latest commercial “Eye of the Squirter” from July 2013:

Their second commercial “Eye of the Squirter” is different from their previous commercials.  While the main character is still the same person in the previous two ad spots, they are no longer set in the same environment that changes multiple times.  This time it is sporting activities in various environments, such as the track, the swimming pool, and the hockey locker room.   Notice that these sports also have a stronger Canadian tone to them?  While MiO itself wasn’t introduced outright from the beginning, it becomes obvious what is being advertised given the visual cues.  The advertisement’s goal is to show you that MiO Sport is a fitting hydration choice for any activities – even if it is power walking on the track.

Do either of these commercials spur you to hydrate yourself with MiO Sport?  After all, it does appear that MiO Sport is targeting a different consumer segment.  While Powerade and Gatorade are after the serious athlete, MiO Sport is only targeting the casual athlete and the average-fit consumer.  There are more people that match this consumer group than that of the serious athlete.  My guess is that the MiO Sport does have a strong appeal in the Canadian marketplace, and we should see sales taking off soon enough – if it hasn’t already.

It’s also an interesting note that these commercials are not strictly made for TV, rather it is made for YouTube and a version of it is released for TV (a topic I will highlight in a separate post).  If you don’t believe me, feel free to click into all the separate “hidden” commercials that they talk about.