Revisiting the Mid-Calorie Soda Segment

Courtesy of adage.com

Does anyone still remember Pepsi Next or Dr Pepper 10?  Anyone know how well these drinks are performing?  It seems that since their launch last year, not much has been said about these hybrid-sweetener sodas.  Pepsi has been focusing on their core offerings of Pepsi, Diet Pepsi, and Pepsi Max, while Dr Pepper has been left with the task of bringing news and excitement to the entire mid-calorie segment.  So far, it seems that mid-calorie sodas have taken a backseat to regular and diet cola products.  In the past two weeks, there has been some major stories from Advertising Age (link here), brandchannel (link here), and even myself at Canadian Grocer (link here) on how mid-calorie soda is doing.  While manufacturers recognizes the importance of this segment, it’s just not gaining momentum within the consumer market.  So what is wrong with mid-calorie sodas?  What will it take to make these drinks a success?

The jury is still out on whether mid-calorie soda is a success or a failure, but it’s certain that the beverage companies have not been supporting it at the levels necessary for long term success.  It seems that marketing efforts were most prolific during the launch period to gain awareness, but has not kept pace over time when it was most critical to win consumers over: the repeat purchase.  At release, news reports indicated that these drinks endured high rates of consumer sampling.  Pepsi and Dr Pepper gave away these carbonated drinks for free to stimulate trial.  However, the repeat rate has not been mentioned as much.  That is, how many consumers given a free can of mid-calorie soda ended up purchasing these particular drinks later?  Not much apparently.  Reports have indicated that the mid-calorie drinks’ sweetener leaves a bitter aftertaste and has led drinkers to stay away from it.  Therefore, people that were given that free can may have liked it because it was free, but would choose to drink another soda (or an alternate beverage) when they have to pay for it.

Courtesy of Forbes.com

Both sodas companies should have maintained marketing support to focus on championing the benefits of these new products.  Despite the bitter aftertaste, the fact remains that fewer calories are consumed per serving.  Pepsi Next and Dr Pepper 10 should have talked up these benefits relative to other sodas in order to win over consumer perception of a bitter aftertaste.  Instead, they continued on leveraging against the humor (Pepsi Next with their Baby commercials) and gender exclusivity (Dr Pepper 10 with their Manliest Man commercials).  It would have been better to educate the consumer as an alternative to other beverage segments with an identical amount of calories, or other sodas that were sweeter but contained the most calories.

So how can they make these beverages and the overall mid-calorie segment a success?  Or are these drinks primed to quietly disappear like so many other beverages before their time?  Does anyone still remember Coca-Cola Blak?  Or Pepsi XL? Or Orbitz?

Advertising and promotions.  Both Pepsi and Dr Pepper should keep up their mid-calorie advertising efforts to maintain brand awareness.  It seems like an obvious solution to ensure mid-calorie sodas stay alive long enough to see their potential through.  However, in organizations where performance is judged by quarterly performance and not much else, there is no room for tweaking unless it’s on-the-fly.  The interim period from when a new mid-calorie sweetener will be introduced is very crucial for manufacturers to preserve their shelf space.  These beverages must be afforded marketing support and in-store promotions to drive repeat purchases.  Without consumer incentives to stimulate purchases, retailers will have no choice but to remove slow sellers from the aisle.

The fact remains that health groups have picked out carbonated soft drinks as a strong contributor to obesity.  Consumers are also more focused on the sugars and calories they put in their bodies.  Mid-calorie sodas taps into these trends very well.  These soda innovations contribute less to obesity (relative to their full calorie counterparts).  It will also meet the needs of calorie-conscious individuals that want less sugars.  Whatever the case, mid-calorie sodas are here to stay and are crucial for the survival of the soda segment.  If not Pepsi Next and Dr Pepper 10 this time, it will be something else in the near future.

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Dr Pepper Ten Goes Classic with “Manliest Man”

Courtesy of adweek.com
Courtesy of adweek.com

It could just be me not having as much time to watch TV and commercials, but there has been much less headlines about Dr Pepper Ten recently, as Coke and Pepsi continue to advertise and command viewer’s attention.  That said, it made me curious to find out what the latest Dr Pepper Ten was, and whether they continued their trend of “Still Not For Women” theme.  From their latest commercial below, you’ll see that they’ve decided to bring back memories of the 1980s, by providing visual references to beer and cigarette commercials from that era.  Examples are not limited to the following: eating tree bark, “fishing” for Dr Pepper Ten, and canoeing with a bear.  After watching the full commercial below, we’ll take a few moments to understand the communication and also step back to understand why Dr Pepper Ten has not been dominating the air waves as much.

The commercial’s classic “faded” feel and over-the-top theatrics make the whole episode light-hearted and certainly catches your attention  Gone are the “It’s Not For Women” taglines and average Joe rugged male actors, replaced with another representation of the manliest man.  At the root of it all is the message that the soft drink has ten calories and it’s OK for men to drink a low calorie beverage.  So while the commercials vary from time to time, the messaging remains intact.  Dr Pepper Ten has just embraced more comedy and toned down the female alienation aspects.

Moving on to the less obvious question of why there has been less Dr Pepper Ten commercials of late, it’s best we take a quick look at their latest earnings release.  From the Nasdaq blogger’s opinion, overall Dr Pepper business appears to be trending down, while Dr Pepper Ten doesn’t appear to be performing extremely well either.  From this perspective, because the core and extended offerings are declining, logic would apply that reversing these declines would be centered on the core offering – Dr Pepper.  The Dr Pepper youtube channel would seem to indicate as much, since most of the recent uploads center around their “/1” campaign.

While performance declines are not limited to only the carbonated segment, fixing their core offering in this segment is paramount.  Overall beverage consumption trends are shifting toward healthier options, so holding on to their piece of the shrinking carbonated soda pie is important.  Therefore, it makes sense to focus Dr Pepper’s efforts and dollars on the main product, than on the extension offerings.

Dr Pepper Highlights Individuality in “/1” Campaign

Starting today, Dr Pepper will be launching an extension to their previous T-shirt “I’m a Pepper” campaign.  The new campaign titled “/1” highlights the character’s uniqueness and that they are indeed one of a kind – 1/1 – truly unrivaled in what they do.  Dr Pepper’s advertising agency conducted research to ensure that those numbers represented in the video are statistically accurate, and that these people are peerless in what they do (how many models-turned-boxers do you really know out there?).  Dr Pepper says that the characters featured are real-life people and while they may not be world famous, these individuals are renowned within their respective fields (boxing, roller derby, and air guitar).

It’s worthy to note that this campaign extends to focus on Diet Dr Pepper as well.  Traditionally their commercials and features have been separate, but they have chosen to include Diet Dr Pepper as well in this campaign.  Dr Pepper TEN likely was left off because the messaging of “Not For Women” is on solid footing right now.  As seen from the commercial below, Dr Pepper wants to highlight your individuality in choosing not just Dr Pepper, but also Diet Dr Pepper

So would you rate these commercials as successful?  Do they get your attention? Does it make you pick up a Dr Pepper when you are at the supermarket or convenience store, especially when Coke or Pepsi also also available for your purchase?

I think it does…with some caveats.  While the messaging is solid and connects with the viewer, it still has a strong chance to get lost among all the other commercials that are playing.  Not to mention that Coca-Cola and Pepsi have more money to spend on advertising;  the chances of you being bombarded with soda commercials are quite high and remembering Dr Pepper over a longer time period are quite low.

Dr Pepper’s series of commercial stands apart from how other soda companies have advertised their trademark beverages.  Coca-Cola talks about happiness when you drink their carbonated soft drinks (Open Happiness) and Pepsi advertises on living in the moment (Live For Now).  Dr Pepper turns the focus to you, on how you are special and different from everyone else out there.  In today’s society, everyone wants to be known for being themselves, so Dr Pepper has tapped into how individuals want to think which makes it easier for them to identify themselves with Dr Pepper.  In my opinion, this is a stronger message than being happy or living in the moment.

Still, it is a matter of whether this will translate to any form of wins for Dr Pepper.  Are consumers more likely to buy more Dr Pepper because of this commercial?  Will these purchases come at the expense of Coke, Pepsi, or some other non-Dr Pepper-owned beverage brand?  Keep in mind that Dr Pepper also has to compete with other beverage products, like Red Bull, Gatorade, Nestle Water and the like.  At the supermarket or convenience store’s point of purchase, some of these products will undoubtedly be on sale and make that decision to choose Dr Pepper even harder.  It may come down to whether you are willing to pay more to be unique.

So the next time you are purchasing a soft drink – any drink actually – will you choose Dr Pepper because it reminds you of your individuality?

Mid-Calorie Sodas – Successful or Not?

Pepsi Next line-up - courtesy Robin Lee

It’s been over a year that Pepsi Next has first launched in test markets, and almost six months since it’s been available nationally in the United States.  Dr Pepper 10 will also soon be lapping it’s one year national launch in the market place.  These national launches proves that Pepsi and Dr Pepper both believe in the viability of the mid-calorie cola segment.  However, what are the results of this launch, and can it be considered a success so far?

For Pepsi Next, results so far can be considered average at best.   Wall Street Journal reported the Next to have gained 1% market share on US dollars (link here), although product reviews indicate that the aftertaste (end part of the Pepsi Next’s taste curve) is unpleasant and definitely feels like the artificial sweeteners (link here).  In spite of all this, Pepsi has launched two (limited for the summer) line extensions of the mid-calorie soft drink: Paradise Mango and Cherry Vanilla (pictured above).  That said, the launch can be considered a success so far, but the real test is converting these initial trail users into returning customers.

The line extensions and the continued advertising support for Pepsi Next would be much needed in order to help the brand sustain its momentum.  After all, it takes some time for a product to be accepted in the market – remember that it took Coke Zero & Pepsi Max a few years and some trying rebranding and repackaging before it caught on with consumers?  Beyond that, let’s hope for more products to enter the mid-calorie segment, and bring more attention to the category.

DPSG 10sFor Dr Pepper 10, test results have been similar to Pepsi Next.  On the Dr Pepper 10 alone, sales nationally have been strong enough to offset the declines across Sun Drop and 7UP.  And as the one year anniversary  for Dr Pepper 10 approaches, they have already worked on releasing five additional 10 calories colas.  The 7UP 10, A&W 10, Canada Dry 10, SunKist 10, and RC 10 are currently in test markets and some of these flavors should make it national (my bet is on the 7UP, A&W, and Canada Dry).

Overall, it would appear that there are two main players in the mid-calorie segment right now between Pepsi Next and Dr Pepper 10.  Coca-Cola has been reported to be trying a mid-calorie version of Sprite and Fanta in key test markets as well.  This segment will only continue to grow as consumers become more and more health conscious.  However, in order to make it a success, the main issue of taste must be addressed, since consumers likely wouldn’t sacrifice taste for calories.

And beyond that, let’s hope it makes it way up north to Canada so we don’t have to drive across the border to find some mid calorie beverages.