Odwalla Upsizes and Updates Packaging

Odwalla's updated 2014 packaging.  Courtesy of facebook.com
Odwalla’s updated 2014 packaging. Courtesy of facebook.com

Odwalla’s most recent packaging update has upset some consumers.  The premium juice maker was considered a leader in sustainable packaging by using Coca-Cola’s PlantBottle technology, but the makeover has them abandoning the PlantBottle in favor of the regular plastic bottle used by other beverages (BevNet story here).  This update also sees Coca-Cola’s premium juice brand forsake their color-coded cap system implemented in their previous packaging update – just last year.  Does this imply that the 2013 changes were unsuccessful, and confused consumers?  Will that the recent changes return their competitive edge?

With consistent product packaging for six years prior to the 2013 update, it would seem that their 2013 changes were geared toward attracting new consumers to the Odwalla business.  After all, if the product was fantastic and equally adept at generating repeat purchases, why change it?  Introducing a color-coded cap system was designed to build the juice franchise through educating consumers on their product portfolio.  Green caps denote “superfoods,” red meant fruit smoothies, blue equaled proteins, orange represented juices, purple for quenchers and finally yellow communicated seasonal products.  Do you think six different cap colors for over 20 different juices and smoothies help educate the juice browser, or frustrate them to the point of walking away?  Despite good intentions, this packaging change likely turned consumers away rather than bring them into drinking Odwalla.

Part of Odwalla's updated 2013 packaging.  Courtesy of facebook.com
Part of Odwalla’s updated 2013 packaging. Courtesy of facebook.com

Rectifying this fiasco necessitated the 2014 packaging changes.  Though a stronger competitive set meant returning to the old system wouldn’t suffice.  Everyone (Evolution Fresh, Bolthouse Farms, Naked, and a host of other niche players) had larger bottles compared to the Odwalla 12oz (355ml) bottle.  In order to properly compete, Odwalla brought in a bigger bottle in addition to making it clear.  They also returned to green caps to (hopefully) simplify the consumer’s shopping process.

It’s hard to say if these packaging updates helps restore the premium juice maker’s competitive advantage, though it’s a step in the right direction.  Anything that simplifies the shopping process has a higher probability of getting sold.  What may also help them increase sales is securing produce placement, which is what they are trying to do.  The product section is a stronghold juices made by Bolthouse Farms, Arthur’s Fresh, and POM, so getting product placement in this area will certainly help Odwalla enter the conversation among premium juice purchasers.  Only time will tell if this new, simpler packaging will help move the needle for Coca-Cola’s premium juice brand.

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POM Wonderful and Coca-Cola sue each other

Courtesy of foodindentityblog.com.  Is the Minute Maid juice label misleading?
Courtesy of foodindentityblog.com. Is the Minute Maid juice label misleading?

The food & beverage landscape may undergo significant changes shortly if a lawsuit between POM Wonderful & Coca-Cola is decided in POM’s favor. POM is suing Coca-Cola for misleading packaging for its Minute Maid Pomegranate Blueberry juice.  The labeling suggests that the beverage is a 100% fruit juice flavored with a combination of five fruit juices.  The beverage contents are primarily apple and grape juice, containing only 0.3% blueberry juice, 0.2%. pomegranate juice, and 0.1% raspberry juice.

The crux is whether one organization can sue another for misleading labeling that was deemed permissible by the Food & Drug Administration.  The FDA has decided that the beverage contents and the name itself satisfies their labeling requirements.  That said, the governing body allows companies to name the product based on the flavor even if trace amounts were used to produce the flavor.  Volume quantification is not necessary for the product contents.  Linda Goldstein, a partner with Manatt, Phelps and Phillips prefaced the following to AdWeek (full article here):

“Depending on how the Supreme Court rules, the ramifications could be broad. This is a huge case for the food and beverage industry.  No one has asserted that Coca-Cola violated FDA rules and law. The issue is whether the FDA regulations are the floor or the ceiling. Pom says it’s the floor and that the label can still be misleading.”

Should this case be decided favoring Coca-Cola, the food & beverage industry’s product labeling practice is kept intact.  POM will have made an even larger name for itself and Coca-Cola will carry on business as usual.  In the end, this could serve as a win for both Coca-Cola and POM Wonderful despite the court ruling in Coca-Cola’s favor and everyone paying exorbitant legal fees (the case has been around since 2008).

If the court ruled in POM’s favor, this sets the stage for increased vigilance toward product package labels.  Beyond the direct impact where Minute Maid must augment the product label, other food & beverage products currently on the market will be availability for scrutiny.  According to Goldstein in the AdWeek article, the fact that it could lead to a class action litigation suggests that many products do not satisfy the labeling requirements.  The precedent would be set that an organization can reduce the competitor’s advantage by scrutinizing their packaging claims.  Will this ultimately lead more companies to sue other companies for the sake of labeling challenges?

The genesis of POM’s lawsuit was Coca-Cola’s introduction of this Minute Maid Pomegranate Juice at a lower price point relative to POM’s products.  Given Coca-Cola’s distribution and marketing muscle, it’s understandable that POM would want to level the playing field as much as possible.  However, be careful what you wish for.  POM is also currently in appeals with the Federal Trade Commission over their own misleading advertising claims (full article here).  Through all of this, both beverage organizations’ focus has been on reducing the competition’s advantage.  Let’s hope that they return to their core business functions sooner rather than later: selling refreshing beverages.

POM Wonderful In the Headlines For Good & Bad Reasons

POM FTC Ruling Ad

Pomegranate juice manufacturer POM Wonderful has frequently been in the headlines these past few weeks, and not all are positive headlines.  Earlier this month the juice company extended their product line to include a smaller single serving bottle: the 236ml (8oz) bottle (one of many new articles link here).  Just last week they were involved in headlines for supposedly losing a Federal Trade Commission (FTC) ruling on deceptive advertising; it’s really about perspective as POM Wonderful believes they have won a considerable measure from the ruling (link here).  What does the FTC ruling mean for POM Wonderful now?  Will consumers still see the same advertising health claims from?  And is the 8oz bottle extension good for business, given that size proliferation eventually leads to product rationalization?

On the issue of the FTC ruling, POM Wonderful’s first reaction was to roll out some advertisements celebrating the judge’s ruling.  While they can no longer claim to prevent heart disease or prostate cancer without scientific research, the ruling agreed that there are indeed significant health benefits.  Beyond the first wave of advertising response, POM Wonderful may likely ramp up their health claims to test the limitations of the FTC ruling.  However, there will be a paragraph about how there was scientific research conducted to prove the particular health claim. The real question then becomes whether it will affect how other beverage products are advertised in the media (ie energy drinks with their claims of alertness, or energy shots claiming no crash, etc).

POM line-up

Relating to the introduction of the 8oz bottle, this line extension should fit well with the rest of the line-up.  One might argue for cannibalization, but the 8oz is going after a different consumer segment and a different consumption occasion.  Unlike soft drinks which has sizes like 8oz, 10oz, 12oz, 14oz, etc, the next largest size from the 8oz bottle is twice as large (16oz).  There stands to be more cannibalization between the 16oz and the 24oz bottle than the 8oz and 16oz formats.  Also, POM Wonderful appears to be targeting the health-conscious parent that wants their kids to think and drink healthy.  The 8oz bottle is perfect for kids, where parents can pack the beverage into lunchboxes or even be sold in school vending machines.   Even at such a small serving size, the bottles are resealable so the actual consumer (children) can use the bottle throughout the day.  In terms of grocery location, the 8oz bottle may not lead to product rationalization just yet; it may not even appear in the same location as the other POM products.  At such a small size, the 8oz bottle may appear in impulse coolers or ice barrels near the checkout where thirsty shoppers may want something tasty, small, and inexpensive to quench their immediate thirst.  The added benefit is then that POM Wonderful now has a secondary location to attract the shopper’s purchases.

In all likelihood, the 8oz bottle should sell well individually and not hurt the sales of other products in line-up.  Given that it is a single serve bottle that is targeted at youth, the natural line extension beyond the single bottle would be a multi-pack like 6x8oz bottles or 12x8oz bottles.  We’ll have to wait and see when that time comes, and what type of advertising health claims the communication shows.