Dr Pepper TEN a Casualty of “/1” Campaign

Courtesy of brandmagazine.com
Courtesy of brandmagazine.com

As Dr Pepper invests more support to highlight their “1/1″ campaign for Dr Pepper and Diet Dr Pepper, are they providing less support to Dr Pepper TEN?  The beverage manufacturer continues to feature their core soda offerings and exclude the low-calorie Dr Pepper TEN soft drink.  As much as the company says that this segment is growing, neither Pepsi (makers of Pepsi Next) nor Dr Pepper Snapple Group (makers of Dr Pepper TEN, RC Cola TEN, 7UP TEN, Sunkist TEN, Canada Dry TEN, and A&W TEN) have provided the same media support levels since the 2012 launch period.  Given consumer trends of shifting consumption away from soft drinks, what will happen to these Dr Pepper low-calorie sodas if they are not supported by Dr Pepper?

As seen above, the commercial’s final scene shows both Dr Pepper and Diet Dr Pepper but not Dr Pepper TEN.  The marketing message for Dr Pepper TEN is clearly different from Dr Pepper and Diet Dr Pepper, but it is concerning that there has not been additional support behind Dr Pepper TEN.  With market activity, consumer trends, and expert opinions all suggesting a continued decline toward carbonated beverages, it is understandable to support Dr Pepper and Diet Dr Pepper since it delivers the biggest return.  Conversely, not supporting these two brands will also provide the most detrimental effects to the business.  This is why Dr Pepper and Diet Dr Pepper will continue to receive the majority of funding.

With the low-calorie products receiving less funding, sales decline should be expected.  But by how much?  While the initial repeat levels were above expectations and more than half of all sales were sourced from outside the carbonated soft drink business, these early wins were not sustained.  Dr Pepper Snapple Group’s SEC  10-K filing from February 2014 indicated as much:

Our Core 4 brands, which included the impact of the launch of our Core 4 TEN products, decreased 1% compared to the year ago period. This result was driven by a a 5% decrease in 7UP, a 7% decline in Sunkist soda and a 2% decrease in A&W, partially offset by a 6% increase in Canada Dry. Crush, Squirt and RC Cola declined 7% , 4% and 4% , respectively.

The entire 2013 annual report can be found here.  So while it’s possible that other soft drinks within the 7UP, Sunkist, A&W, Canada Dry and RC Cola portfolio also declined, the fact that these TEN products sales did not balance the other beverage losses indicate that they were also losing sales thselves.  Times are tough within carbonated soft drinks right now, especially when you’re not a Coca-Cola or Pepsi with a broader more diversified beverage (or food) portfolio.  And even these two global conglomerates recently released results that were slightly less positive.

Dr Pepper TEN and the other TEN products still stand a chance at survival, because it is keeping in line with trends toward lower calorie consumption.  However, delivering growth with less marketing support and when everyone is pushing full calorie offerings makes it challenging.  At some point, Dr Pepper Snapple Group will have to make a decision whether they will re-invest in Dr Pepper TEN, or turn their attention toward other initiatives.  Let’s just hope they make this decision sooner rather than later.

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Three More Canadian Beverage Trends For 2014

Many experts had created their own lists for food & beverage trends for 2014, how do you make sense of all of these?  Some are more macro-level and includes a generic view toward food & beverage (like this Innova report) while another taps into consumer needs that drive changing beverage preferences (like this CSP publication).  Euromonitor International’s white paper has also listed five beverage trends pertinent to the Canadian landscape (link here, must process credentials before report can be accessed).  These five trends are fairly on point, but may have missed out on some other additional activity that will change the beverage landscape this year.  Here’s some additional points BevWire has noticed and would like you to consider:

Improved Natural Sweeteners To Grow Zero/Low/Mid-Calorie Sodas

Pepsi Next - courtesy of rft3.wordpress.comDr Pepper & Pepsi had both launched mid-calorie sodas with combination sweeteners in the past two years, while Coca-Cola finally took the plunge last year with Coca-Cola Life.  Although Coca-Cola Life has yet to make its entry into the North America, this is a strong sign that everyone believes calorie segmentation for sodas is a step in the right direction.  Coca-Cola also has received FDA approval for Reb-X – their stevia sweetener developed in conjunction with Pure Circle.  In addition, Zevia & Steaz are also among a host of naturally-sweetened soda manufacturers that are gaining broader exposure and shelf space within grocery retailers.

These factors indicate that natural sweeteners are receiving just as much as attention as their regular calorie counterparts – if not more.  Optimizing a soda formula that removes the bitter aftertaste will go a long way toward restoring sales to this segment.

Aspartame Fears Continue to Depress Diet Sodas

The fear over safety of consuming aspartame came to a climax in mid-2013 as Coca-Cola ran an advertisement to dispel fears over this ingredient (link here).  With a greater focus toward ingredient consumption, consumers are leaving diet sodas for other beverage products.  The soda segment as a whole is facing scrutiny for contributing to obesity, but having extra attention on ingredients within diet soda has led to more consumers choosing alternative beverages such as juice, tea, and water.

With a continued rise in competition from adjacent segments and beverage categories, diet sodas will continue their rapid decline relative to the other soda segments.

Small Home Appliances Crowd the Consumer’s Kitchen Counter Space

Courtesy of sodastream.ca

SodaStream’s controversial in the 2013 Super Bowl ad really put them on the map, as well as put other carbonated soft drink manufacturers on notice.  Consumers also noticed this and SodaStream was rewarded with sales as well as increased availability across Canadian retailers.  SodaStream has also benefited with licensing agreements and partnerships to carry branded syrups like Kraft’s Kool-Aid and Country Time.  Starbucks is making inroads to get on your kitchen counter as well, trademarking “Fizzio” in 2013.  From trademark documents, Fizzio is their at-home carbonation unit that will carbonate water into soda flavors.

Outside of at-home carbonation units, coffee & espresso makers are also seeing a bump in sales.  Keurig, Nespresso, Tassimo and other coffee pod makers offering deep discounts on the coffee machine, attracting your initial purchase in order to have you buy exclusive coffee or tea pods from them in the future.

While BevWire doesn’t have an official list where these trends are being ranked, the rise of natural sweeteners certainly seems to be the most likely to take place in early 2014.  That said, we are only 13 days into 2014 and many things can still happen to change up the trends.  Let’s see how this plays out over the next 352 days.

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.

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?

Coke Follows Pepsi, Entering Mid-Calorie Soda Segment

Sprite Logo

With the recent success of Dr Pepper Ten and Pepsi Next, there’s been some renewed buzz in the carbonated soft drinks category recently.  Now Coca-Cola wants to get into the mid-calorie segment.  BevReview.com has a few links to other articles where sources have confirmed that Coca-Cola will be launching Sprite Select and Fanta Select in five U.S. test markets (link here).

As the linked article notes, both Coca-Cola and Pepsi have tried mid-calorie products before.  Both companies’ products failed to gain traction in the marketplace and were discreetly phased out from store shelves.  Given the technological advances and the successful-so-far products of Dr Pepper and Pepsi, is it time for Coca-Cola to come in with another mid-calorie product?  Will they succeed this time around?  And why try this with Sprite and Fanta, not with the trademark Coca-Cola product itself?

One issue would be to first determine what is “mid-calorie” and how this type of product is unique from the consumer’s perspective.  Arbitrarily, I’m defining this soda segment as with a limit of 70 calories per 12oz (355ml) serving, given Pepsi Next has 60 calories, and Sprite Select and Fanta Select will have 70 calories.  Dr Pepper Ten only has 10 calories per 12oz serving, so they fit the mold (Note: Dr Pepper Ten has 10 calories in both a 12oz serving, as well as 10 calories per 8oz serving, click through link to understand how).  Mid-calorie products are also categorized as those using natural sweeteners to bring the calorie count down below 70, featuring a combination of sugars, high fructose corn syrup, or some other form of sweetener in tandem with the natural sweeteners.  The purpose is to balance out the taste curve: from the moment the liquid hits the palette, all the way to the after taste.

Coca-Cola C2 and Pepsi Edge

Given that mid-calorie soft drinks like Coc-Cola C2 and Pepsi Edge of the early 2000s did not have the technology or cost-efficiencies before to insert natural sweeteners, they failed to catch on in the marketplace.  One decade later, the technology is in place , which makes it possible to give consumers a better-tasting (and better named) product.  The generally positive feedback toward Dr Pepper Ten and Pepsi Next would seem like an opportune time for Coca-Cola to enter the mid-calorie soft drink segment.  Similar to how Coca-Cola’s Dasani Drops may be entering the liquid flavor enhancers after Kraft’s MiO has tested the waters, Coca-Cola may have monitored the consumer reaction to mid-calorie products  (BevWire’s article on the Dasani Drops piece can be found here).  This lets Coca-Cola sit on the sideline to see what would happen without bearing the developmental costs until it’s been a proven success.

While it appears that these products have received positive reviews, it appears that Coca-Cola is still hesitant with this segment.  These reservations makes the pilot testing with Sprite and Fanta that much more important.  Coca-Cola would not want to put the trademark name on something that they don’t fully believe in, only to see it fail like last time.  A second failure with this segment would have implications such as losing brand equity or showing that the soft drink manufacturer does not understand its consumers.

A factor that would aid in their success, as well as supporting the successes of Dr Pepper Ten and Pepsi Next are consumer trends.  Consumer trends have shifted toward a stronger focus on health consciousness.  No longer are consumers willing to sacrifice calories for taste.  However, not all consumers are  prepared to sacrifice taste for zero calories either, which provides the opportunity for the Pepsi Next, Dr Pepper Ten, and the impending launches of Sprite Select and Fanta Select.

In this regard, there would appear to be a market for mid-calorie soft drinks, albeit a small market for now.  The consumer trends and the technological advances will help to make this a success this time around.   If history does end up repeating itself, it would certainly guarantee that Coca-Cola will not be testing any more mid-calorie soft drinks.

Second Dr Pepper Ten Commercial: Just As Manly

Dr Pepper has put out their second commercial and it’s just as male-focused as the first one.  Using other stereotypical testosterone-based examples, such as drill bits, desert target practices, and big TV screens, the commercial further enforces the point that it is a man’s drink.  The tagline remains the same, ending with “It’s Not For Women”.

As Dr Pepper spokepeople and industry insiders indicate that the low-calorie soft drink is a success at gaining new trial users at minimal cannibalization, Dr Pepper needs to remind consumers that it’s a better option than some of the more calorie-heavy drinks – it needs to increase its repeat consumption among men.  It’s main competition right now appears to be defending against the Pepsi Next launch, which was launched nationally in U.S. late last month.  At a point when awareness is high and feedback for Next isn’t completely positive, Dr Pepper inserts their low-calorie offering into Next trial users’ consideration set to let them know there is an alternative out there.  One that may taste similar on the taste curve (full flavor sweetness on the initial palette, followed up sour aftertaste from the aspartame sweetener).

On a pure business and marketing standpoint, it seems as if the launch of the second Dr Pepper 10 commercial came at the best time possible.  Not only because it seems to be a blocker/flanker-type to remind people that Dr Pepper’s low calorie offering is better than Pepsi Next, but also from an expansion and continuity perspective. While they may not reach the same levels of awareness and trials as their first commercial, the product is now available nationally and can translate sales in more U.S. markets (larger market size may equal lower awareness levels, but generate more sales dollars because of the sheer size).  For continuity, it also halos off their first commercial with the same shocking tagline of “It’s Not For Women”, so there will be some viewers that are reminded it is a male-specific soft drink like the first one.

One of the key sales barriers may be that the  grocery shopper of the household is still the mom or wife, not the men that the product is targeting.  It may ultimately serve a purpose similar to the H&M David Beckham 2012 SuperBowl commercial, which targets women to buy the undergarments for their men.  For the most part, the men might now take part in putting the product on the weekly grocery list, or are moved to purchase the product themselves when they make the rare supermarket trip (although not that rare anymore according to Ad Age – article link here).

So why hasn’t Canada received the Dr Pepper 10 yet?  The Canadian market still only has Pepsi Max and Coke Zero competing in the zero-low calorie soda space.  One would suggest that given the healthier trends penetrating the Canadian market and our affinity toward lower calorie alternatives, that Dr Pepper should launch Dr Pepper 10 in Canada.  Alas, the situation is not that simple because Dr Pepper does not have it’s own distribution network here in Canada.  As per their distribution agreement with Coca-Cola and Pepsi, Dr Pepper Snapple Group’s various liquid refreshments come off of both manufacturer’s delivery trucks in Canada.  That said, Dr Pepper 10 may have a good chance to make it on the delivery trucks once the distribution contracts are up for renegotiation, or they find a tertiary distribution network if the contracts permit that.

Until then, Canadians looking to try Dr Pepper 10 will likely have to look toward grocery stores that bring their product in from south of the border, or make the trip down south themselves to find the product.

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

Dr Pepper Snapple Group company logo

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.

Jones Soda 16oz Cans: Good Idea or Bad Idea?

Jones Soda 16oz - courtesy of bevnet.comJones Soda announced recently that they will be releasing their popular premium soda in 16oz (473ml) cans into the convenience channel.  The can packaging will follow closely with their Jones Soda glass bottles: photos submitted by consumers enclosed in a black and white box.  The 16oz cans will be available in three flavors by late October or early November: Green Apple, Berry Lemonade, and Strawberry Lime.  This product launch is unique for Jones and the overall soda category as most products are of the traditional 12oz (355ml) can variety.  Will other CSDs follow and release products en masse in this packaging size if Jones is successful?  Or will this package size fall short of sales targets that suggest it can be a permanently stocked product?

On one hand, this launch makes sense because Jones Soda is seeking out growth opportunities.  Since canned soft drinks are the preferred choice in the convenience channel and the company only produces bottles, Jones Soda would have to come up with a can version of their products in order to penetrate this channel.  However, their category position as a premium soda company somewhat dictates that they must sell their product in glass bottles.  Consumers have the notion that glass bottles preserve the taste and quality better.  If the manufacturer switches from glass bottles to aluminum cans, this is somewhat interpreted as “selling out” by sacrificing quality.  Sales have slowed down for companies that make that switch – just look at Nestea, Sobe and Lipton (among many other examples).

Adding another layer of curiosity is the can size itself.  Their choice of an unconventional size will generate attention and provide a stronger bang-for-the-buck (cost/value) relationship for the consumer.  But some other things to consider include calories and convenience store shelving capabilities.  Consumers are extremely calorie-conscious and often make the effort to read the label and portion control their servings, so when the 16oz can contains 30% more calories than a regular 12oz soft drink, they may be afraid to purchase a product of this size.  Also, most 16oz beverages are energy drinks so an uneducated shopper may confuse the product as an energy drink and not a soft drink. With retail shelf space, most convenience stores with refrigerated vaults  work with a set planogram that limits the space they have to put products – there are size limitations since a taller can will not fit into a pre-set shelf, and if the width is larger than a regular can the manufacturer must provide special racking.  The retailer may ultimately choose to sell the product warm since it cannot fit into their shelving units.

Jones Soda may believe there is a trend of consumer fragmentation, and as a result expand their offerings through package sizes.  Coca-Cola did recently released a new 12.5oz bottle as a result of product-price diversification to appeal to more consumers, so there may be some truth in that.  However, Pepsi had also recently launched their 12oz soft drinks in 16oz sizes as well (Pepsi-Cola, Diet Pepsi, and Dr Pepper were available, to the best of my knowledge) but they did not remain on shelves for long given their popularity.

If Jones Soda is ultimately successful in making this work, the other manufacturers will undoubtedly follow.  However, with the consumption patterns of consumers moving toward healthier alternatives, and limiting calories through portion-controlled serving sizes, these 16oz cans will face  a tough uphill battle.  Let’s just hope it does not follow in the footsteps of Sobe, or Nestea.