“Freestyle” Flight Beverage, and a Thought Starter

On my latest flight trip, I decided to step away from my regular drinks.  Normally, I opt for Cranberry Cocktail, Orange Juice or Sprite.  But the flight crew was really comical and interactive, and even made a comment about mixing drinks together.  I decided, “Why not?” and opted to mix the Orange Juice with Sprite.  To which he replied that that mix is fairly common and told me to “Live on the Wild Side.”  So I asked for his suggestion on what would dial up the “wild” factor he was alluding to.

Given that there are finite options on an airplane and I wasn’t interested in paying for alcohol, he came up with the following: Coke Zero and Cranberry Cocktail.  In addition to the Orange Juice and Sprite.  I guess this really turned it into a Cranberry “Cocktail”.  Taste-wise it wasn’t bad because of the mix ratios (about 70% OJ), but it was nice to have a quick Coca-Cola Freestyle moment on the flight.  Here’s my drink on the flight.

Freestyle Flight Beverage - can you guess what's in this? Even though it looks like Orange Juice.
Freestyle Flight Beverage – can you guess what’s in this? Even though it looks like Orange Juice.

So my thought starter as a result of this interaction?

Would there come a day when flights are equipped with more than just the regular assortment of fast-selling canned beverages – like Coke, Pepsi, Club Soda, and Cranberry juice?  How likely is it to get Coca-Cola Freestyle (with over 100 different customizable beverage options) on a flight?  What would it take to make this happen?  Are we currently moving to this state already?

The simple answer to those questions: No.  Based on my observations & understanding, an airline’s beverage assortment is geared toward the top-selling and popular options.  For example, if a Vanilla Coke alternative existed, would it be “turn” fast enough to beat the expiration date?  Despite it having a cult following, this just isn’t a regular beverage option.  Keeping in mind that flight guests typically don’t know what the airline’s beverage assortment consists of.  This means that suggestive selling or flight-attendant input is heavily needed in order to move through slow-turning beverage options.

Operating a Coke Freestyle machine would involve many complicated moving pieces.  For example, how would the syrup be best stored to be protected from denaturing during different altitudes?  Which beverage options should the airline carry on board the plane?  Will they need more syrup cartridges of the popular flavors and less of the more niche offerings?  This also does not solve the problem of slow-turning alternatives.  And let’s not forget the most obvious problem: carbonated tanks.  Forgetting about all the various beverage options and the obvious hazards of carrying carbonated tanks through different air pressure, there is still too much equipment store needed to make this work.  And we haven’t even gotten to the financial part of this alternative.  Ultimately, my thought starter would end up being a non-starter.  Fountain units are not meant for air travel.

Another interesting observation: I never knew that planes had lemon and lime substitutes, but apparently they exist like sugar packets.  Feast your eyes on an image taken in flight (and posted later to BevWire upon arrival) of crystalized lemon and lime packets.  Now that would have been a party if I had added this into my new Cranberry Cocktail!

LemonLimeCrystalized

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Everyone Wins With Up-Sized Fanta

Fanta Upsize

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

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

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

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

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

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.

Coca-Cola Follows Coors, Launches Color-Changing Cans

 

Coca-Cola 2011 Summer Set

Coca-Cola constantly refreshes its packaging so when summer 2011 came around, it was likely that they would have some fancy packaging.  However, what is different about this packaging refresh is that is also contains a “summer ready” indicator, as Coca-Cola has termed it.  What this means is that the can has portion that will change color when it reaches a certain temperature, indicating that it is cold enough and ready for consumption – similar to the Coors Light beer cans.  Using thermochromic inking technology, a small white Coca-Cola contour silhouette will turn to red when the can’s temperature reaches 8 degrees Celsius.

From Denis Ferlatte, Coca-Cola brand Marketing Manager in Quebec,

“The summer season is very important for both the soft drink and beer industries. We need to stand out and innovate to grab consumers’ attention and interest. Moreover, summer, with its warm and sunny weather, is the time to focus on the refreshing aspect of our product. So we came up with this new can.”

The cans were available for purchase starting July 1st, and will only be around (running off inventory and change to winter packaging) until September 5th.  In terms of size offerings, it can be found packages of 8, 12, 18, 24, and 32 (basically all pack sizes).

So is this a real innovation, and does it strengthen Coca-Cola branded products?  It can be considered a small step forward, but definitely not a game changer.  This does show that Coca-Cola is paying attention to the consumer by alerting them that a can of Coke is cold enough for “optimal consumption”, and what better time to do this than in the hot and humid summer months?  Also, by using the silhouette Coca-Cola bottle and changing it from white to red, they are reinforcing their trademark bottle shape and colors.  Consumers simply see the advertised bottle and colors, and automatically make the connection to Coca-Cola products.  In my opinion, this does given Coca-Cola branded beverages an edge, but not a lot.  It may drive trial because of its novelty, but it’s always the price and taste that keeps consumers coming back and they would likely have bought the Coca-Cola beverage regardless of the summer ready indication.

On the other hand, their use of thermochromic ink should be expanded.  Coca-Cola should expand the use of this technology to other Coca-Cola can packaging like the Coke Zero (change from white to black silhouette), Diet Coke (white to silver), or Spite (white to green).  Other than the can packaging, they should use this for their 355ml bottle offerings that are found in certain on-premise establishments like hotels or high-end restaurants.  Consumers have always preferred drinking Coca-Cola (or carbonated beverages, in general) out of glass bottles based on the taste and chill factor – so putting a summer ready indicator will go a long way to reinforcing their leadership and showing that they pay attention to consumer preference.

Will Pepsi follow and add a thermochromic ink stripe?  Given Pepsi’s competitive nature they will likely be adding this technology to their products very soon (maybe next summer).  Pepsi has followed Coca-Cola and re-introduced their 414ml bottle size this summer, so it’s not out of the question that they follow with new color changing ink packaging next year. 

And since Coca-Cola only has it on their core product, I would suggest Pepsi to take this technology and expand its uses to include other products in their portfolio.  And if it’s not too costly, they should take the lead and re-introduce some glass bottles with this thermochromic ink.

Pepsi Slips To Number 3

2010 Coke and Pepsi Market Shares, courtesy of adage.com

A few weeks ago, Beverage Digest posted the latest market share statistics for the US carbonated soft drinks (CSD) category and we found out that Pepsi had slipped to number 3 (see stats here). Industry analysts had predicted that this market share change was coming as Pepsi had lost share in the last few years, as Coca-Cola has stayed the course with their beverage unit and maintained marketing Diet Coke in traditional media (TV/print/radio) while Pepsi started promoting other beverages in traditional media, and invested in other forms of marketing

It seems that as Pepsi sought to maintain a balance beverage portfolio by promoting other beverages (such as Pepsi Max, Sierra Mist, Aquafina Plus10, Mtn Dew, Gatorade, etc) that they forgot to keep promoting Pepsi itself.  Their NFL sponsorship was recently changed from Pepsi to Pepsi Max, Superbowl advertisements followed the same course, and even the main TV commercials started promoting a Coke Zero vs. Pepsi Max cola war instead of focusing on Coca-Cola vs. Pepsi.

Was this the right decision for Pepsi – to focus on other beverages instead of their core product?  Despite Pepsi’s balanced portfolio making them more formidable to withstand declines in any one category if they promote other products, the CSD category is still the largest beverage category.  Even within the CSD category, promoting Pepsi Max, Mtn Dew, and Sierra Mist helps these brands gain traction and spread their risk if any one product sees slow sales.  However, CSDs as a category is in decline, and Pepsi has been declining more than the category.  And according to the Beverage Digest rankings, it’s not just Pepsi that lost market share, it’s also Diet Pepsi.  Your two core products are in decline, while your competitor’s two core product maintain market share in a declining market, meaning they now own a bigger share in the CSD category.  Even Sprite, another core product for Coca-Cola passed Diet Pepsi in the market share rankings.

Although this decline cannot be fully traced back to any one particular issue, I would answer that Pepsi’s decision to experiment  with their marketing and promote other brands was a bad decision.  The core of your business where you make the most money is still Pepsi and therefore you should be promoting Pepsi.  In the largest marketing venues, Pepsi should be promoted and not Pepsi Max.  Though whether they should allocate more spend at the expense of other brands is still questionable, promoting their core product more and through effective traditional media is a must.

Re-Energizing the Lemon-Lime Category

Advertising Age published an article last week detailing the marketing investments of Coca-Cola, Pepsi, and Dr. Pepper Snapple Group (DPSG) in the lemon-line soda category (link here).  Until this was mentioned, I actually had not noticed that there really wasn’t much advertising around Sprite, Sierra Mist, and 7up in Canada.  Sprite always appeared to be advertising because of their partnership with the National Basketball Association, so it doesn’t seem like they had not advertised at all in the past few years.  No Sierra Mist advertising in Canada because of DPSG’s agreement with Pepsi, but 7up itself has not done any advertising in the last few years.  The article reports that marketing dollars for this beverage category had shrunk 80% and the money was being reallocated to other beverage categories such as enhanced waters, energy drinks, and sports drinks.

However, all this is about to change (or in Sprite’s case, has changed already).  Driven by consumer insight that clear sodas are a healthier alternative than colored sodas (untrue, by the way), all three major beverage companies are reinvesting marketing dollars into the category.  In terms of product innovation, Sprite launched Sprite Green in 2009, while Sierra Mist will introduce Sierra Mist Natural later this year for the US.  Both drinks are naturally sweetened beverages (Sprite with Truvia and Sierra Mist Natural with sugar) to keep in line with the consumer trends searching for healthier alternatives.  7up had already reformulated to contain 100% all natural flavors, removing artificial flavors and preservatives in 2006.

Sprite has also launched a global integrated marketing campaign titled “The Spark” which began with Drake’s commercial seen above.  Sprite’s marketing campaign includes a music project as well as a film project, and will be marketed through TV, out-of-home, online, and mobile media placements.  The music project gives teens the ability to mix their own music and save it as ringtones or send to their friends, while the film project encourages teens to create their own mini-film through choosing the setting, plot, characters, and ending.  All these efforts tie in with their theme to “spark” creativity and sharing it with others.

courtesy of adage.comWhat about 7up?  Since Sierra Mist cannot be sold in Canada, consumers’ lemon-lime soda options are limited to Sprite, 7up, or private label brands.  Are there any product or package innovations coming from 7up?  Advertising Age indicated that 7up will be stepping up their marketing and will be spending $25 million in these last four months, but no idea if that translates over into the Canadian market.  I’m curious to see what 7up will do because there may not be a lot of leverage to build upon these remaining 4 months.  Holidays are normally a ramp-up for beverages, but Christmas usually sees Coca-Cola and Pepsi promoting their own core brands.  And with 8 months of the year past already without much brand exposure, what will 7up be spending their $25 million on the remainder of the year?  According to Nielsen market share data, 7up held nearly 6% market share in 2009, while Sprite held less than 4% during the same time period.  Despite the US market being larger, shouldn’t 7up invest more advertising into Canada to protect and increase their market share points since there is less competition here?  If nothing is done, 7up stands to not only lose market share to Sprite, but possibly its market leader status.

Coke Debuts 414ml Bottle Nationwide

Coca-Cola was previously testing to see if a smaller 414ml bottle would work well in the marketplace, and have decided to launch it nationwide.  Guess the bottle was successful enough for them to release it everywhere.  Coca-Cola, Diet Coke, Coke Zero, and Sprite will all be available in this new size.  The beverage is a single-serve bottle, meaning it won’t be sold in multi-packs or fridgepacks (unlike the Dasani fridgepacks which has 355ml bottles).

There’s a lot of questions to be considered about this new bottle size.  Why 414ml and not 450ml or 500ml?  What is the price point for this bottle?  How much will this hurt their 591ml bottle’s sales?  Why not a multi-pack as well?

First of all, 414ml converts to 14oz, so the rationale behind this awkward milliliter size is probably because Coca-Cola will roll this out to the US as well (if not having done so already and just launching into Canada now, but googling “414ml Coke bottle” has delivered no search results).  Since the US beverages are measured in ounces, it makes sense to have a 14oz so the production line can be easily configured to produce this size; they already have the 12oz (355ml),  20oz (591ml), 24oz (710ml), 34oz (1L) bottles.  Why not a 473ml bottle you might ask?  BevWire guesses it has to do with the price point.

The price of a 414ml is $1.29, as advertised by the Chevron gas stations.  This would sort of be considered an inexpensive option since a 591ml runs close to $2 now, and a 355ml can costs $1.  If a 473ml bottle was introduced, then Coca-Cola would likely run out of room to price it competitively and risk immediately cannibalizing their 591ml bottle.  Instead, it looks like Coca-Cola is releasing this bottle to have customers trade up (cannibalize) from their 355ml can sales.  Only 30 cents more, and you get 60 more milliliters plus a resealable bottle.

Why only sell this bottle in singles and not in multi-packs?  It can’t be because the size is too large, since they already have the 710ml in multi-packs.  It can’t be because it’s too small either, because they have the 355ml fridgemates.  Is it because there will be cannibalization here as well?  That’s quite possible but if they can sell it in the single, they should be able to sell it in a multi-pack.

Thing is, it looks like Coca-Cola has released too many different sizes for their core beverages, and when they were previously saying they were looking to reduce their product portfolio, you have to wonder if they considered reducing the different package options.  There are the 355ml cans and glass bottles, the 591ml bottle, a 1L bottle for the heavily addicted, and now the in-between 414ml.

BevWire thinks there will be a lot of cannibalization occurring, from both the smaller 355ml can and the larger 591ml bottle.  What are your thoughts?

Coca-Cola to make more eco-friendly plastic bottle

In a race to be more environmentally friendly, Coca-Cola is planning to introduce to a plastic bottle made partially from plants.  The bottles will be made with up to 30% of plant-based materials, converting  sugar cane and molasses components into polyethylene terephthalate (PET), the material that is used to make the plastic.

Coca-Cola’s first product to use this eco-friendly “PlantBottle” will be the company’s Dasani water brand, and expand to include vitaminwater and certain CSD sparkling beverage brands by 2010.  These certain CSD sparkling beverages are likely to increase Coke, Diet Coke, Coke Zero, and Sprite.  Coca-Cola will provide special on-package and in-store messages to alert consumers of this new type of bottle.

Coca-Cola’s decision to use Dasani as the first brand when introducing this bottle is a good move.  Coca-Cola hopes to promote a healthier perspective, thus choosing Dasani as the first product to launch this new bottle.  By reinforcing this bottle launch with their best-selling beverages, Coca-Cola ensures that the message will reach the maximum amount of consumers.  In addition, these flavors’ wide distribution ensures that more plastic will be saved.

The war between the beverages companies to be more eco-friendly has stepped up.  Among the bigger bottled-water companies, Nestle uses less plastic resin in their water bottles, while PepsiCo recently released an eco-friendly bottle themselves.  PepsiCo has been bottling their Aquafina in these bottles since March.

So far, Coca-Cola says that only sugar cane and molasses can be used to develop this “PlantBottle” but are exploring the use of other plants to create the PET plastic.  Stay tuned for updates on ongoing developments!