Healthier options positioned to quench more than thirst
Last year was tough for the beverage category. In a tanking economy, consumers turned to inexpensive carbonated soft drinks, reversing a move toward healthier beverages that had been the trend for several years. If the economy shows signs of life in 2010, will consumers turn back to better-for-you choices in the beverage aisle? Industry experts are betting on it.
“Assuming the economy makes a rebound and consumer confidence comes back, consumers are likely to switch back to more expensive drinks and single serves,” said Phil Gorham, an analyst for Morningstar.
Sports drinks, energy drinks, functional beverages and enhanced water all are categories Gorham thought are likely to generate category growth in 2010. Those categories suffered greatly last year as consumers watched their pocketbooks. “Premium-priced energy drinks and sports drinks were among the categories that were hit hardest,” said John Sicher, editor and publisher of Beverage Digest.
Gary Hemphill, SVP at Beverage Marketing’s information services division, believed that even though consumers are thinking twice before parting with their dollars, growth opportunities exist for products that offer health-and-wellness attributes and functional benefits. “Consumers will still pay a premium for the products that deliver on the benefits they want,” he said.
Lynn Dornblaser, director of CPG Trend Insight for Mintel International Group, expected to see action from new beverage products that provide a “sense of fun, whether it’s fun flavors, unique positioning or a tangible benefit.” Products touting “energy, sustained energy release, hydration, beauty and the like,” she said, will “invigorate the category.” These products are less about specific types or specific brands and more about ensuring a benefit that it promises—even if that benefit is just a sense of coolness or fun, she said.
Enhanced beverages have been showing strong growth as the products’ appeal becomes more mainstream. Owater, the brand of electrolyte-enhanced, sweetener-free waters marketed by one of the founders of Nantucket Nectars, has had strong growth since the brand was introduced in 2004. “Drug stores are looking to offer their customers healthier options as sales of CSDs and heavily sugared drinks decline. Owater offers both zero- and low-calorie options made with natural ingredients,” said Kim Stewart, a spokeswoman for the company.
Muscle Milk, a brand of protein-enhanced functional beverages from CytoSport, has brought innovation to the category with an emphasis on protein. The beverage contains protein ingredients derived from milk, such as whey, but is lactose-free and fat-free.
“Much like Vitaminwater pioneered the vitamin-enhanced water category and Red Bull pioneered the energy-enhanced category, Muscle Milk is launching and carving out the protein-enhanced category,” said Nikki Brown, a representative for Muscle Milk.
While Owater and Muscle Milk aren’t groundbreaking in terms of formulation, expanding their appeal beyond athletes and hardcore gym goers is news. “The real difference to me is that both products are positioned at mainstream consumers, which does make them stand out from others out there,” Dornblaser said. Both beverages, she said, offer much more advanced benefits than fortified beverages consumers are used to seeing, but they are more accessible to mainstream consumers than some of the more “technical” functional drinks on the market.
“They are both small brands that show promise,” Sicher said. “It’s [too] early to tell if they’ll generate much growth.”
Still, enhanced beverages are a good fit for drug stores. “The Muscle Milk protein portfolio is perfect for the drug store company,” Brown said. “We have 100-calorie options, meal-replacement options, diet options and performance proteins with emphasis on healthy, sustained energy and recovery for active lifestyle consumers.”
Sprite hopes to ‘spark’ creativity in teens
ATLANTA Sprite is giving teens a platform to express their creativity through music and film in the brand’s first-ever global integrated marketing campaign, The Spark.
“Our research shows that fresh ideas and experiences are important social currency for teens,” said Joe Tripodi, chief marketing and commercial officer, Coca-Cola. “Whether its music, film or sport, through The Spark campaign Sprite is providing an original, interactive way for teens around the world to showcase and share their creativity with others.”
The Spark takes its name from Sprite’s newly updated Spark logo, which captures the lemon-lime sparkling beverage’s unique ability to refresh and invigorate. The campaign will launch in markets around the world in 2010 and across four continents including Europe, North America, Africa and Asia. North America will lead the global launch with a campaign that embodies the essence of The Spark.
The new campaign is a fully integrated marketing effort that includes TV, out-of-home, digital and mobile applications.
New report notes increased digital coupon activity by CPG manufacturers
MINNEAPOLIS Digital coupon distribution by consumer packaged goods manufacturers increased by 3.4% during fourth quarter 2009, across the Web sites monitored as part of the Marx Digital ProMotion Report available exclusively from Marx, a Kantar Media solution.
Of the 152 CPG manufacturers that issued coupons in the quarter, 116 CPG manufacturers distributed digital coupons across the retailer Web sites. Twenty-six of these 116 manufacturers distributed digital coupons on two or more retailer Web sites, while 11 manufacturers were active across three or more retailer Web sites. In many situations the manufacturers that were active on print-at-home or e-coupon Web sites were also active on retailer Web sites.
“Digital coupons represent a small but growing percentage of total coupon distribution and are gaining traction across an expanding group of CPG manufacturers,” said Mark Nesbitt, Kantar Media president.
Additionally, the average face value per unit increased in 8-out-of-9 major CPG categories which included cereal, dry grocery, frozen products, health care, household products, other packaged goods (i.e. seasonal items), personal care, refrigerated foods and shelf stable beverages. Of the categories, other packaged goods, shelf stable beverages and personal care categories had the greatest increases in average face value per unit of 250%, 44.7% and 30.2%, respectively. Refrigerated foods was the only area with a decrease, declining 22.4%, versus the year-ago period, to 45 cents.
“Coupons are a proven tactic for creating purchase intent and driving planned shopping trips,” said Bob Cristofono, Marx VP sales. “Manufacturers and retailers are developing new ways to engage with consumer and shoppers through multiple platforms including retailer Web sites.”