Pepsi Next Changes Its Packaging

Pepsi Next undergoes a facelift, changing the packaging from blue to green.  Courtesy of facebook.com.
Pepsi Next undergoes a facelift, changing the packaging from blue to green. Courtesy of facebook.com.

Pepsi Canada ushered in 2015 with a packaging change to Pepsi Next.  Previously packaged in light blue, the product packaging transitions to green and harmonizes with the Pepsi True product packaging in the U.S.  This change is logical since Pepsi True (in the U.S.) and Pepsi Next (everywhere except the U.S.) are formulated the same way: both versions are sweetened with stevia and contain fewer sugar and calories.  While this packaging change harmonizes Pepsi’s cola representation in many markets, two questions remain.  The first being what should Pepsi do to simplify their cola portfolio in the U.S., should they discontinue Pepsi Next so consumers are not confused with the many versions of Pepsi available?  The second question is whether more harmonization is on the horizon, where Pepsi keeps only one brand name (Next or True) across all marketing areas?

Related Post: U.S. Cola War Continues with Pepsi True Launch

Pepsi Next was launched to much fanfare in the U.S. and kickstarted with a Super Bowl commercial featuring Beyonce.  Despite the amount of marketing support and retail space Pepsi dedicated to this launch, sales of Pepsi Next has not set the world on fire.  Many consumers still find the aftertaste hard to stomach as a result of the artificial sweeteners.  It would make sense to discontinue Pepsi Next since its performance fell short of expectations.  While discontinuing Pepsi Next helps Pepsi True secure retail shelf space, this will be a tough decision for Pepsi.  The mid-calorie soda launched in 2012 – roughly on the market for two years – and rationalizing the drink so quickly after its launch could damage Pepsi’s reputation for flawless product launches and create trust issues within their customer relationship.  Since Pepsi True was introduced in 2014, discontinuing this product would undoubtedly create trust issues and severely damage Pepsi’s reputation in the marketplace.  Regardless of difficulty, it’s important that Pepsi simplifies the U.S. cola portfolio.  Rationalizing Pepsi Next would be easier than Pepsi True.

Related Post: Pepsi Next May Find More Success in Canada (Than The U.S.)

Pepsi Next's new packaging, in green. Image courtesy of facebook.com
Pepsi Next’s new packaging, in green. Image courtesy of facebook.com

Pepsi would also have to address the product name of Next or True if it wants to achieve the greatest marketing scale and build the strongest brand equity.  If cost was the sole consideration, keeping the Pepsi Next brand name is least costly since Pepsi True is only available in the U.S., whereas Pepsi Next is sold and recognized across the Americas, Europe, and Australia.  However, the marketing perspective suggests that it would be make more strategic sense to keep the stronger brand name, and the name that translates best across multiple geographies. It’s possible that Pepsi keeps both names, as some products are branded with a different name in international markets.  For example, North American brands Bounty (paper towel) and Becel (margarine) are recognized internationally as Plenty and Flora, respectively.  It would just cost more to Pepsi as they market the product across closely tied geographies, like Canada and the U.S.

Changing the Pepsi Next packaging in Canada to match the U.S. Pepsi True packaging is a good first step toward reducing confusion, but the work isn’t done for Pepsi.  Consumers should be on the lookout for some more changes to Pepsi Next (or Pepsi True if you’re in the U.S.) in the coming months.

U.S. Cola War Continues with Pepsi True Launch

Pepsi True

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

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

Related Post: Pepsi Next May Find More Success in Canada

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

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

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

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

Pepsi Next May Find More Success in Canada

Pepsi Next Canada

After launching in other parts of the world for the past two years, Pepsi Next officially launched in Canada.  Unlike the American version that contains 60% less sugar compared to the regular Pepsi, the Canadian version contains 30% less sugar.  The difference is a function of the sweetener composition.  The American version is sweetened with artificial sweeteners such as high fructose corn syrup, acesulfame potassium, and sucralose.  The Canadian version is naturally sweetened with stevia extract. This difference affects how Pepsi Next is marketed on both sides of the border.  How will Canadian consumers respond to Pepsi Next and its marketing communications?  More curiously, how much of the marketing communication will be customized to the Canadian market?

Pepsi supported Pepsi Next’s introduction with a pre-launch promotion, partnering with the NHL and the Heritage Classic hockey game in Vancouver.  Here is part of the Canadian consumer reaction to the beverage as captured by Pepsi below.  The initial consensus indicates positive response to the beverage.

While mid-calorie soda is still an emerging product area for Canadians, it is certainly on point with what most people are looking for.  Canadian consumers are more health-conscious and more proactive at seeking out healthy food offerings.  Sugar intake and calories per serving are more top of mind for Canadians shopping within grocery stores.  A product that provides the same taste without any bitter aftertaste (like the American Pepsi Next) and contains less sugar helps to lessen the guilty burden.  Naturally sweetened with stevia also helps to increase adoption since artificial sweeteners are also perceived to be less healthy.  Consider Pepsi Next similar to the early successes of the vitaminwater Canadian launch.  The enhanced water brand pioneered a new segment with a health-based product positioning at a time when consumers were beginning to question what they eat and drink on a daily basis.  The beverage met their requirements given its appeal as a great tasting healthy product.  While Pepsi Next is still a soft drink and cannot be considered “healthy” in the traditional sense, it is healthier relative to the other soft drinks.

Following it’s launch, Pepsi Next has ran a TV commercial adapted from the American Pepsi Next “Baby” spot.  The Canadian version included some very noticeable differences.  The key components being the refreshed packaging, the slogan of “Taste It to Believe It”, and of course, the “30% less sugar”.  The call to action of “Taste It to Believe It” is clearly catering to the Canadian audience.  The American slogan is “Drink It to Believe It”.  The customized “Taste” instead of “Drink” speaks toward a different value system between the two countries.  “Drink” implies consuming the entire beverage.  “Taste” obviously imply giving the product a try.  Perhaps the Canadian population may be more cautious at first toward trying a new beverage, but adapting the slogan clearly shows customizing the message toward the Canadian audience.  In order for Pepsi Next to succeed in Canada, this is a great first step.

The truly telling piece will be how Pepsi Next is supported following the launch period.  We know from earlier articles that Dr Pepper TEN and Pepsi Next are not sustaining earlier launch-period sales following reduced media support (article here).  With less attention dedicated toward the product, consumer focus will shift toward other health option.  Pepsi Next can maintain its launch momentum and also continue its early success if it keeps advertising to maintain its awareness levels .  Let’s hope the Canadian marketing team learns from what happened in the U.S. and find more success than its neighbors south of the border.

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.

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.

Super Bowl Series: Coke’s Social Engagement Effort Delivers Mixed Reviews

The third of BevWire’s 4-part Super Bowl Series focuses on Coca-Cola’s use of “second screen engagement” with the 2013 Super Bowl.  Along with the standard participation of Pepsi and Coca-Cola, this year we will also see Kraft MiO and SodaStream.  The Super Bowl Series will take a look at each of these beverage manufacturers’ involvement with the Super Bowl.

Click through the below links to read the other two parts of the BevWire Super Bowl Series.

Part 1: Did Pepsi’s Crowd-Sourced Halftime Show Add Any Value?

Part 2: SodaStream’s Banned Commercial Help Build Brand Recognition

Badlanders, Cowboys, and Showgirls all race toward the finish line for a bottle of Coca-Cola. Coca-Cola wanted viewers to vote at CokeChase.com to determine which group will win.  The winning group will be shown in the Coke ad after the Super Bowl game.

The general prognosis is that this year’s Coke Chase campaign was more successful than last year’s talking bears for the Polar Bowl.  Coca-Cola had released the original Coke Chase spot online before the Super Bowl, and also provided strong media support to hype it up.  There was even a spoof by Pepsi Next of the Coke Chase characters fighting to get a Pepsi Next rather than settle for a Coke.  All this led to a high level of buzz for the campaign, so much that it crashed the website as it experienced an unprecedented surge of site traffic.  AdAge’s Natalie Zmuda has a piece outlining how Coca-Cola decided what to do in real time during the Super Bowl to reconcile this problem here.  The ultimate goal was to have viewers vote for one of the three groups (badlanders, cowboys or showgirls) to win the race and the beverage at the end.  Coca-Cola would tabulate these results during the game and show the winning group getting the Coke following the game.

It was another effort by Coca-Cola to engage with viewers and communicate via the “second screen”, where users watching the television also simultaneously interact with  the advertising company or TV program through their mobile and computer screens.  Interact they did, to the tune of 1.3 million page views and over 900,000 votes for the different competing groups.  Despite these strong numbers, could this be deemed strong engagement by Coca-Cola with the audience this year?  Did most people stay to watch the Coca-Cola spot after the Super Bowl to see who won?  Were the results what Coca-Cola wanted?  See the original video:

My opinion is that the engagement exceeded expectations, and would have been even better had the server crash not occurred.  The amount of votes (900,000) certainly seems low considering the amount of sabotages (7.8 million), video views (3.8 million) and site visitors (1.3 million).  Everything was in the millions and the total votes were only 900,000?  I would expect voting to equal the amount of site visitors, or why else would you go to the website anyway?  If you were intrigued enough to visit the site, surely you would be engaged enough to vote.  However, this represents an enviable problem for Coca-Cola.  Interested viewers will keep on trying to log onto the site to vote, and this can be translated to a longer engagement period than simply logging on and voting in the first place.  The winning video generated about 50,000 views online, but there’s no definite way to quantify how many people saw it live even with the close game.  Here’s the winning video:

Since most people tune out after the game is decided, running a commercial following the game seems less likely to maintain their engagement.  However, voting and page views mattered more than the group wining the Coke at the end.  The end goal was to drive social engagement and  not to have one specific group win over another group.  The page view metric would be equivalent to that of over one million people viewing the original site, and clicking through another 6 commercials to sabotage the two other competing groups.  The winning video did not matter and the Twitter image below proves it: only 77 retweets and 57 favorites.

Note the minimal amount of retweets and favorites? Seems low for a Coke tweet considering the high profile nature of the Coke Chase campaign.
Note the minimal amount of retweets and favorites? Seems low for a Coke tweet considering the high profile nature of the Coke Chase campaign.

All in all, not too shabby for a company that was not the official sponsor of the event.  Think of how Pepsi always tries to insert itself into a Coca-Cola sponsored event (ie the Olympics) and there never being too much heard about them, at least not to the same extent.  Now think of how this was a Pepsi sponsored event and we often heard of Coca-Cola.  And parallel this with how the neon green Nike running shoes stole the spotlight during the 2012 London Olympics despite it being an Adidas sponsored event.

There will be many experts saying that Coca-Cola would have won this year’s cola war battle had it executed better.  This is likely true and will serve as a lesson for another broad scale event.  But being able to drive continuous engagement during a game, and getting over one million of these viewers to visit, vote, and click over six times to sabotage other competing groups is no small feat.  That itself already represents a win for Coca-Cola.

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.

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.