AD-WARS · BRAND WARS · BRANDS · EXPERENTIAL & MARKETING · SPORTS BRANDS

[BRAND WARS-FMCG:] PEPSI CASHES OUT ON COCA-COLA PLANS TO LAUNCH GATORADE AS COCA-COLA DECLARES LOSS.

image

             Credits: 2fun2fun.com
Pepsi is going to launch an organic Gatorade, as the company increasingly looks outside of the soda industry for growth. Al Carey, the CEO of PepsiCo Americas Beverages, said that the company would debut an organic version of the sports drink in 2016.

image

Pepsi Gatorade G2 an isotonic sports drink.

The company is also launching a line of non-GMO labeled Tropicana juices in 2016. Carey additionally highlighted recent and upcoming new PepsiCo products such as Mountain Dew Kickstart (a take on Mountain Dew with ingredients like fruit juice and coconut water), flavored Aquafina water and vintage-inspired sodas like Caleb’s Kola, 1893, and Dewshine. Much of the company’s current growth areas are outside of the traditional soft drink market. PepsiCo CEO Indra Nooyi told investors in October that focusing solely on carbonated soft drinks is “a thing of the past.”
It’s #pepsilongthroat (hashtag) campaign had been a massive online success despite a biased point of view from local creatives’ about its TV and Print Ad execution where a caricature of its brand ambassadors like wizkid, Tiwa Salvage and new signee SEYI Shay was totally criticized on “Show-N-tell”.

     Meanwhile  Coca-Cola  Enterprises, Inc. (CCE) which engages in marketing, production, and distribution of non alcoholic beverages has warned that a “difficult operating environment” will hamper both its 2015 and 2016 full-year performances. The company, which in October reported a 15% fall in net sales for the first nine months of 2015, said that net sales in the 12 months of this calendar year will be “slightly negative”. While net sales in 2016 are forecast to be up slightly for the full-year, Q1 will have to deal with transaction costs related to CCE’s tie-up with the German unit of the Coca-Cola Co and Coca-Cola Iberian Partners to form Coca-Cola European Partners. The company noted that it does not plan to repurchase any shares next year, due to the pending transaction. CEO John Brock said: “While we anticipated managing through a difficult operating environment in 2015, the consumer sector and the category have been softer than originally expected. Further, we expect these conditions to continue to impact CCE’s results into 2016.
“While the creation of Coca-Cola European Partners will provide new synergies and efficiencies, top-line growth is expected to remain challenging in 2016,” Brock added.
On the bottom line, 2015 should see operating profits generate “slightly positive growth”, although they are expected to come in down slightly in the first quarter of next year.

Back in March this year, Coca-Cola introduced a one brand strategy where its four product variants, Coca-Cola, Diet Coke, Coca-Cola Zero and Coca-Cola Life were placed under one Coca-Cola master brand instead of being marketed as separate products.
At the same time, the company changed its ‘Open Happiness’ strapline to ‘Choose Happiness’ in the UK to enable consumers to make informed choices  by  more  clearly communicating product differentiation.
The new brand strategy came to fruition after its consumer research showed that half of consumers didn’t know that Coke Zero has no sugar and no calories, with many unclear about the different between Coke Zero and Diet Coke.
Bobby Brittain (marketing director for Coca-Cola UK) told brand journalists that  “We’ve failed to communicate clearly enough the product differentiation. That’s a major wakeup call for us. We need to ensure that we are enabling consumers to make an informed choice.”

To achieve this goal, the company said it would increase investment both in the whole Coca-Cola portfolio and in each of its individual products. It also rolled out new packaging, with each variant given the same design and set of characteristics, such as the iconic Coca-Cola script, ribbon and layout.
Early sales results

Besides launching two TV ads since the new strategy was introduced, the brand also got involved with the Rugby World Cup in August. Throughout the sponsorship, the brand decided to put Coke Zero centre stage.
“It’s unique in the sense that the one brand strategy frees up all of the individual variants to have their own time in the sun,” Brittain said. “For the first time people are seeing Coke Zero as the face of Coca-Cola. This is definitely Coke Zero’s time to shine.”
It focused on the ingredients and “intrinsics” of Coke Zero as the basis for Rugby World Cup promotion rather than the brand’s personality according to Brittain.
He also said that Coke Zero has an opportunity to “grow even faster”, something the company is addressing by “doubling down on investment” and pushing the variant both in TV and communications as well as through in-store promotions

Adapting to healthier lifestyles
Amid growing consumer concern around sugar and the obesity crisis, the brand is facing a tough battle. As a result, Coca-Cola is keen to boost its lower and no calorie variants, and aims to have half of its sales come from lower and no calories variants by 2020. They currently make up roughly 40% of its portfolio. To achieve this, the brand launched ‘Coke Life’ . It meant to offer a lower calorie variant for more health conscious consumers. It has a third fewer calories and sugar than Coca-Cola and is sweetened using a blend of sugar and naturally sourced sweetener stevia.
At the time of the launch, Coca-Cola Europe’s president James Quincey said: “[Coca-Cola Life] complements our existing brands and is well positioned to meet changing lifestyle trends, providing people with a great tasting, lower calorie cola sweetened from natural sources.”
However it faced criticism from some quarters over its positioning as a ‘healthy’ product, with some saying that there was “little to applaud” in the announcement.
Sales figures from IRI show that since the introduction of the new product in August 2014, the Life brand has grown into a £28.9m business , representing 2.43% of the total Coca-Cola portfolio.
The brand said it was pleased with the product’s performance so far. Brittain told reporters in October: “We’re very pleased with the performance of Coca-Cola Life-“Consistent with our strategy, we launched the variant to increase the choice we offer customers, shoppers and consumers and it is encouraging to see that Kantar data continues to show in the first year that over half of the volume switched into Life has come from regular carbonated soft drinks.
“With the launch of Coca-Cola Life and our continued investment focus on Coca-Cola Zero and Diet Coke we are confident we can achieve our commitment that half of the Coca-Cola products we sell will be lower and no calorie by 2020

We say this is not far-fetched for the veteran cola company being faced with a volley of competition like other colas and sugar taxes. If you have any other objective opinions please drop us a comment.

Compiled, edited and posted by: Jimmy Adesanya (Facebook.com/LinkedIn)

For: ©thebrandradio 2015.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s