Everyone Wins With Up-Sized Fanta

BevWire recently noticed that Coca-Cola’s Fanta flavors has made some subtle changes to their packaging.  The take-home 1.5L bottles were upsized and replaced with 2L bottles to align with the rest of their take-home offerings like Coke, Diet Coke, Sprite, and so on.  I believe their packaged cans were also 10 to a case before, and now those have been increased to 12 cans per case.  Not sure what led to this decision, but it should be viewed as a good move all around.  Manufacturer, retailers, and consumers alike should all be happier at the end of the day.

The increased 500ml for Fanta will provide cost savings for Coca-Cola.  They no longer have to source a different shape & size for their take-home bottles.  With the exception of the Canada Dry Green Tea Gingerale, all of Coca-Cola’s take-home bottles all take the iconic Coke contour shape.  This will also provide for stronger brand recognition as a Coca-Cola beverage product since this bottle shape is patented, and only Coca-Cola products can be bottled in this format.  The cost savings also transfer onto the production floor.  The up-sizing for both bottles and cans means that the automated assembly lines do not have to refitted to bottle and package different sized products.  Delivery to customer also also made easier as the case stacking inside the delivery trucks are are uniform.  Pretty much a no-brainer for the beverage organization, which leads me to wonder…why was this not done in the first place?

At the retailer level, the shelf sets don’t appear to be affected (see image above).  The pricing also does not really change since it must line-up with the rest of the 2L take-home bottles.  Ultimately, it’s business as usual for the retailers.

Among consumers, this may be an unexpected bonus when they intend to buy this refreshment.  Coming in-store and to the beverage aisle, the shopper may very well expect to pick-up a 1.5L bottle of Fanta and instead find that Fanta has given them an extra 500ml.  Will this lead to stock-up behavior?  Possibly.  There will also be some form of short-term gain when larger value is perceived (in this case, more Fanta for the same price).

The next step for the Coca-Cola would be the align their single-serve Fanta bottles with the rest of the single-serve assortment.  The Fanta bottle contains 473ml, while the rest of the beverage manufacturer’s single-serve portfolio houses 591ml.  With the cost savings seen for the take-home adjustment, wouldn’t there be even more cost savings if the changes were applied to the entire Fanta assortment?  Retailers wouldn’t notice too much of a difference in terms of stocking, but this may lead to a short spike in sales.  Your move, Coca-Cola – just putting the idea out there.

Coming Soon – Five More 10-Cal Soft Drinks From Dr Pepper

Some months back I wrote about how Dr Pepper was releasing a 10 calorie version of their popular soft drink in select markets, trying to create their own niche market by targeting men specifically (link here).  It looks like the launch was successful, as they are now planning on expanding their 10 calorie portfolio to include five other beverages: A&W, Canada Dry, Sunkist, 7up, and RC Cola.

Larry Young, the beverage manufacturer’s chief executive was quoted,

Chief Executive Larry Young who said, “Now they [consumers] can come back, drink our ‘Ten’ products and enjoy the full flavor of our brands and not worry about the caloric intake. You have to keep the doctor happy.

While Dr Pepper 10 successfully targeted men and gained significant media exposure with their recent campaign, will these five other sodas have the same positioning?  Should the 7up 10 calorie offering or the A&W 10 calorie offering target men specifically?  Or would the company exclusively target women with these 10 calorie products?  Dr Pepper came under fire for making fun of female consumers when they released Dr Pepper 10 nationally, so having history repeat itself in such a short time – even all in over-the-top good humor – may not be a good idea.  However, the free media and the conversation starter of whether the drink was for men only cannot be under estimated.  At the very least, Dr Pepper 10 may have gained trial when shoppers bought the beverage to see if it was really anything special, so it can be considered successful in that regard.  If given the chance to repeat the same marketing strategy, Dr Pepper may have chosen differently so female consumers are not alienated.

That said, it’s also unlikely that the company will be targeting men specifically for the five other 10 calorie beverages.  The more 10 calorie offerings that are specifically targeted at men, the more probable that Dr Pepper earns a reputation as a men’s only beverage organization and cutting off the company from half of the potential customers.  Something else to keep in mind would be that females are the shoppers for the family unit and if the beverages does not appeal to the female shopper, the end consumer (the husband or son) will likely be drinking something else that she approves of, and the 10 calorie beverage will remain on store shelves.   So while the research indicates that men do not want to be associated with the word “diet”,  keying in on males when females are the main shoppers are not likely to help them move product unless the shopping list has “Dr Pepper 10” written on it.

How should Dr Pepper target and position these upcoming products?  Is there a specific age group or ethnographic that they should go after?  Or should it be aimed toward the general calorie-conscious consumer, regardless of age, gender, or ethnicity?  Since Dr Pepper’s initial advertising platform for the Dr Pepper 10 raised the profile for their 10 calorie offerings, there is no need to continue on this line of positioning if it alienates shoppers from them.  Their upcoming focus should be on the product’s benefits.  The 10 calorie sodas should focus on the sweeteners that give them the 10 calories and the closest taste profile to the full calorie versions.

Since the news of the line-up expansion broke not too long ago, Dr Pepper may be in the infancy stages of releasing these other products.  Let’s hope that they gain media exposure for the right reasons this time.

Coca-Cola Launches New Smaller and Slimmer Minicans

Coca-Cola has recently made a decision to launch the 222ml 90 calorie slim-line mini-cans to replace their 100 calorie 237ml minicans.  Unlike the 237ml mini-cans, the slim-line minis will only be available in Coke Classic, Diet Coke, Coke Zero, and Sprite.  That leaves out Canada Dry Gingerale, unless it is confirmed that they will also be making the gingerale in the 222ml cans as well.

These cans are an interesting development on multiple fronts.  For one, this new package size will attract the attention of  calorie-conscious consumers – those that want the beverage but still within a low-calorie setting.  Much like how 100 calorie snacks were the craze a few years back, the same calorie controlling options has slowly permeated the beverage industry.  Not that low-calorie beverages are anything new, but these extra 10 calories has strong psychological implications for consumers.  Consider how 99cents is considered drastically less expensive than one dollar because it is just under the dollar threshold.  Similarly, 90 calorie beverage alerts the consumer psychologically that they are taking in minimal calories – once you reach 100 calories, you are in a whole new calorie threshold.

Another interesting point is the packaging itself.  The cans themselves are not only slim and petite, but the also simple with red and white.  That said, the message that consumers see is the white script of the brand/product, and the nutritional information when the turn the can around.  This product reinforces the Coca-Cola brand equity as they condition consumers to only rely on the color to locate and pick up the product.

Third of all, what happens to Canada Dry Gingerale?  The 237ml Canada Dry Gingerale sells fairly well as store clerks indicate to me that it moves faster than Coke Zero, Sprite and sometimes even faster than Diet Coke.  Does this mean that they continue making the 237ml Canada Dry and stock it on the same shelf space beside the new 222ml Coca-Cola products?  Or does some other manufacturer now make this package for Canada Dry?  Or worse yet, is this a package that will be discontinued?

In any case, it is noted that the positioning of the new slim-line mini-cans are targeting young mothers and primarily Canadian women over the age of 30.  Print advertisements along with point-of-sale displays will start showing up in grocery stores (such as Loblaws, Sobeys, Save on Foods and Walmart) starting in April and continue throughout the year.  That said, for those that really like the 237ml minicans, pick them up while you can because once they’re gone from the shelves, they will put the new slim-line 222ml minicans in their place.

Coca-Cola To Distribute Dr Pepper For $715 Million

In an agreement announced last Monday, The Coca-Cola Company will pay $715 million to continue distributing Dr Pepper Snapple Group (DPSG) brands.

DPSG brands are largely distributed through Coca-Cola and Pepsi, and the one-time cash payments are part of a termination agreement that was triggered when the two companies purchased their distribution subsidiaries this year.  These deals appear to be really beneficial to DPSG, as they are one of the few beverage companies to see growth this past year in the carbonated soda drink category.  As a result of these deals, they save on infrastructure costs by having their products distributed from other companies’ trucks instead of their own.  This will allow them to spend more to market their beverages and hopefully gain more market share.

One interesting piece of information to note is that Snapple will now be distributed by Coca-Cola as part of the agreement.  It may not have mattered too much before when Snapple was a suffering beverage brand, one that was losing customers and market share to competitors.  However, the Snapple brand’s recent revival puts the tea back on customers’ radar with their recent marketing efforts (ie. The Apprentice’s flavor creations, increased distributive reach, new packaging).  At this time, it still stands to be determined where Snapple fits in with Coca-Cola’s other tea drinks – namely Nestea and AriZona – but it shouldn’t be taken lightly by any means.

Canada Dry White Tea Gingerale with Raspberry

BevWire walked into a convenience store the other day looking to pick up a Canada Dry Green Tea Gingerale (far left) and ended up picking up a White Tea Gingerale (left) by mistake.  I thought the red bottlecap was just a packaging update, but turns out it’s another gingerale flavor from Canada Dry altogether.  I must admit, it does taste delicious.  However, what are the chances that other people may have the same problem, picking up one flavor by accident when they meant to get the other one?  The two bottle’s packaging looks almost identical – only differences are the cap colors and the packaging’s edges on the bottles.

Not to diminish or take anything away from this new flavor of gingerale, but what is Canada Dry’s rationale behind a new gingerale flavor?  Didn’t they just eliminate their 2L Tonic Water a year ago because of sku rationalization?  If they were able to launch a new sku, would they not want to bring back the 2L Tonic Water instead of launching a new flavor?  My guess is that the White Tea Gingerale is a stand alone beverage offering (whereas the 2L Tonic Water is mostly a mixer) so this expands the Canada Dry product portfolio to help attract new consumers.  Canada Dry may also have launched it to support the original Canada Dry Gingerale and Green Tea Gingerale, though not sure if there’s any other company out there expanding and innovating on gingerale.

All in all, a great tasting beverage.  However, if Canada Dry did have a chance to release another sku on the market, BevWire suggests re-launching 2L Tonic Water.

Disappearing from Store Shelves: Canada Dry Tonic Water

BevWire recently learned that Canada Dry’s Tonic Water is being delisted or discontinued.  A store clerk at the local supermarket said that they can no longer order in this product because it wasn’t being made anymore.  This is really interesting news because Orangina was taken off cold channel shelves earlier this month, and now another product from this company is being taken away.

BevWire understands that some companies are cutting down the number of SKUs they bring to the market, but why cut something when it actually sells?  Is this brought about because private label tonic water is the number 1 seller in the market, while Schweppes is number 2?  Quite possibly.  Tonic water is a generic mixer with other beverages so the margins may not be as high.  And since Canada Dry is not in the top 2, there is no point to remain in the market.  Furthermore, customers may believe there is little or no differentiation between Canada Dry’s Tonic Water and a private label tonic water, and thus weaken the product’s sales.  If Canada Dry is indeed exiting tonic water, they will likely focus their efforts on what works best for them – Ginger Ale, Club Soda, and their recently launched Green Tea Ginger Ale.

What’s going on with Orangina?

Why has Orangina been disappearing of store shelves and coolers and has not been readily replenished?   BevWire has received word from an inside source that both the 296ml and the 591ml bottles will cease distribution from their current distributor.  Orangina is licensed by Canada Dry Mott’s Inc in Canada, but Canada Dry Mott’s Inc is part of Dr. Pepper Snapple Group (DPSG).  In Canada, DPSG does not have their own distribution network and therefore piggyback on a variety of distributors for their products.  Dr. Pepper, Crush, 7Up, and Schweppes comes through the Pepsi Bottling Group.  A&W, Canada Dry, Orangina, comes through Coca-Cola Bottling Company.  Hires, Snapple, Welch’s, Mott’s, Clamato and a variety of other products are licensed to other distributors.  Could Orangina, which is currently being distributed by Coca-Cola, be switched over to Pepsi for distribution?

BevWire believes this product to be somewhat of a cult favorite.  Orangina’s success can be attributed to both its great taste and great attention to detail.  The bottle is uniquely shaped with tiny bubbles, given the consumer the feel of orange or lemon peel.  And it comes in a glass bottle rather than plastic bottle therefore not comprising the taste.  Let’s hope that Orangina remains in the Canadian marketplace, as this beverage has a substantial customer base and loyal fans.