Category Report: Non-alcoholic Beverages

In the densely populated land of non-alcoholic beverages, it's the occasion that counts now. Sodas aren't necessarily competing against other sodas, nor do juices only battle other juices. In-store, the marketing message is targeted to the consumers' needs -- throwing a Super Bowl party? Thirsty after a workout?"The trend with grocery partners is in definitely looking at usage occasions. Before it was 'here's Coke, here's Pepsi,' now it's 'what is the occasion?'" says Lewis Goldstein, director of licensing and merchandising, Cadbury Schweppes Americas Beverages, Plano, TX. "The competitor is about the usage occasion. At a 'soda time of day,' in that occasion, the competition is with another soda, coffee and energy drinks." Deirdre Sadler, visual project manager for retailer Cost Plus World Market, Oakland, CA, is also leaning more toward events. For New Year's Eve, what are the special sodas she can cross-merchandise with other products? She'll do the same with birthday parties, weddings and other occasions where beverages are a natural tie-in. While she can't give details, she says the retailer is revamping its gourmet area in 2008. This will affect displays, as she looks to create a more branded experience and a shop within a shop. The Coca-Cola Co.'s Steve Hyland, director of retail merchandising, agrees that CPG brands are looking more toward linking their beverages with occasions. Take tailgating: A shopper walks in, and if there's one display bundling all the items needed -- snacks, products to grill, condiments, sandwiches and beverages such as Coke, Diet Coke and Coke Zero -- the consumer doesn't need to walk the entire store. Hyland calls this a solution-based display.Bundled displays of this sort in supermarkets, which tend to be temporary, can originate from Coca-Cola, multiple CPG companies working together and approaching the retailer, or the retailer deciding to do it, usually offering coupons for all of the bundled products. Displays like this have tended to work so well that many consumers no longer travel up and down the aisles, instead choosing to shop a store's perimeter. While that may be good for those brands fortunate enough to receive perimeter placement, other brands can suffer from lack of visibility.Aisle AttractionGoldstein says, as a category captain, retailers are looking to Cadbury Schweppes for help in not only guiding the consumer for different beverage occasions (flavors, health, athletics, parties), but in making the beverage aisle exciting and welcoming.To lure shoppers down the soda and juice aisles, companies may want to look to their neighbors in the coffee aisle, where Seattle-based Starbucks has created its Center Store Café. While the company utilizes temporary displays to market seasonal offerings and limited-edition items, it hopes to permanently enhance the aisle with its new concept."This transformation will lead to creative touches from how the shelves are designed to how the coffee is organized on them," says Wendy Piñero-DePencier, vice president, global consumer products. "Inviting colors and distinctive wood and iron-work will now showcase the finest coffee blends and accessories. The premium coffee aisle will now be a visual experience for the customer. The Center Store Café can take various forms to suit the retailer's preference and space availability. This module allows for differences in taste to be highlighted at each individual retailer."Piñero-DePencier says the company is on track to convert more than 2,000 grocery stores to the Center Store Café and expects more than 4,000 stores to participate by the end of the year. "Already we are seeing the results of improving the customers' experience," she says. "Initial sales for the total aisle of coffee showed dollar increases of 9% and the premium segment of coffee went up 26% in the Midwest, with similar results showing in other areas. 72% of shoppers say that the Center Store Café has improved their impression of the store and they are now more likely to shop the aisle."But getting them down the aisle is only the first step -- packaging still needs to close the sale. Yet with many retailers instituting clean-store policies, brands are limited as to what they can do in the aisles. For Cadbury Schweppes' Snapple brand, the company is testing in-line shelf units. Glides on the shelf keep the SKUs separated, not only making it easier for reps to efficiently sort bottles, but also easier on the consumer to see all available flavors. "If the consumer can't find the diet kiwi strawberry, they aren't going to hunt for it," Goldstein says.Coca-Cola's Hyland says there definitely needs to be more of a laser-focus on the in-store message and sometimes your package is the only option. He cites Tab Energy as one of the company's products that has done a great job of breaking through the clutter and reaching its mainly female demographic. The hot pink can stands out against a sea of mostly black-packaged energy drinks.For many brands, less-is-more packaging is helping them gain attention. "Packaging is pretty simplified right now," World Market's Sadler says. "There is a lot to be learned from Coca-Cola red. More simplified packaging that is very recognizable gets more awareness."Kelli McCusker, chief marketing officer for Izze Beverage Co., Boulder, CO, agrees. "Consumers have less time, so you need to catch their attention quickly and convey your message in a concise, easy-to-understand way. We employ the use of simple, vibrant colors in a less-is-more approach to breaking through," she says. "For us, the colors also communicate our 'true to the fruit' message. Color helps consumers to recognize the Izze slice whether it is on the packaging or P-O-P. The simplicity of our packaging and the Izze slice logo has allowed us to have impact on-shelf. A block of Izze four-packs is artful in and of itself."Color is also captivating for Seattle-based Jones Soda Co. "Our product is about as colorful as you can get in the beverage world," says Joshua Russell, P-O-S and trade show manager. "We just look for our package and displays to help highlight the product."The black and white packaging, including photos sent in and voted on by customers, highlights each soda's color. "The customization of our package really reaches out to everyone," Russell adds. "You feel a connection to Jones when you see all of the different photos on the bottle and even the four-pack. The different photos on the bottles really beg for attention. You want to see them all, to know the story behind each one."Educate ThemSimplicity is also key for Starbucks. Piñero-DePencier says the iconic white package, also found in Starbucks stores, helps the brand stand out from the others "in the sea of color that the coffee aisle has become." Also important to the brand, and to many other CPG companies these days, is using P-O-P and packaging to educate consumers."Attractive displays that not only make shopping easier but also engage the consumer in education about what they are buying -- from its origin to its nutritional value. These facts are aiding their brand choices and encourage exploration," she says. Piñero-DePencier adds that consumers want to know the story behind the product, including beverage origin and any corporate social responsibility.Azusa, CA-based Naked Juice Co. recently launched Naked Juice Probiotic, making educating the consumer on the product benefits even more important. As Rachel Kenney, education manager, says, "Probiotics are fairly new to the U.S. market, so we used a pull-down display that offered more information than traditional forms of P-O-P. Because our consumers take an active role in their health, they really want to understand the product they are about to consume, so education is important."Positioning itself as a super-premium brand, Kenney says permanent displays are better suited to the product. And with the juices and juice smoothies having no added sugar or preservatives, she considers the fresh produce section to be the brand's biggest competitor. With seven juice "families" ranging from antioxidants to energy, Kenney says the packaging itself creates a billboard effect on-shelf, helping it stand apart from other beverages. Each bottle clearly shows all fruits plus any added benefits so consumers can search by flavors or by product benefits. Neck hangers have also been used to call attention to the probiotic line.The increased use of super fruits such as cranberries and pomegranates in juices, and even sodas incorporating vitamins, makes the packaging and P-O-P that much more vital in conveying these benefits. "In the past, it seemed the focus was on what isn't in it, such as caffeine-free, now it's what does it have in it?" Coca-Cola's Hyland says. In 2007, the company launched Diet Coke Plus, which contains various B vitamins plus zinc and magnesium. While Jones Soda has a few recipes with pomegranates, Russell says so far the P-O-S is geared toward the overall brand and not specific ingredients. However, when the company transitioned its entire line (excluding the sugar-free items sweetened with Splenda) in early 2007 from high fructose corn syrup to pure cane sugar, the bottles were updated to read "Jones Pure Cane Soda," instead of "Jones Soda Co." Russell says the switch was made for the health of consumers and the overall taste.When Izze expanded its brand in May 2007 with the rollout of the low-calorie Izze esque, it needed the new line to look similar to the original sparkling juice but expound on its benefits. Out-of-Aisle Still HotOf course, no matter what the benefits are of a particular beverage or how hard the packaging is working in the aisle, all say the most desired product placement is still off-shelf, whether an endcap, lobby or somewhere on the perimeter."We're gearing toward big floor displays," Jones Soda's Russell says. "We need reasons for stores to get us positioned just inside the front door, and fun, colorful displays are the best way to achieve that."For both Coca-Cola and Cadbury Schweppes, more flexible displays are increasingly important. Coke's changeable graphic dump bin is clear on all four sides and has a small footprint, and front graphics can be changed based on the line or promotion.Hyland says the bin is typically in the lobby or entrance, wherever a retailer is putting new products. It can hold both still and carbonated beverages. The company is also updating its endcap displays, giving it the ability to hold all brands in its portfolio. In the past, there might be a traditional red Coke rack and it could hold 2 liters and 12 packs. Now signage is able to change, and 16 ounces, 1 liters and multipacks can take their place next to the 2 liters and 12-packs. Similarly, Cadbury Schweppes' Snapple brand is testing some end units that hold all sizes and flavors of Snapple, plus any new ones to come.When it comes to squeezing into small spaces -- such as c-stores -- cooler clings, floor decals, ceiling hangers and pole toppers can help attract attention. "The racks and coolers are your standard fare, but we've tried to spruce them up a bit with our product shots or flame look," Russell says.Coca-Cola is looking at marketing strips and illumination to cut through the convenience store clutter.Create InvolvementPromotions and contests are also helping some non-alcoholic beverage brands stand out. "When we launched Izze sparkling apple, we gave away a trip to New York, which was popular with consumers," McCusker says. "We also had a promotion when we launched Izze esque. We gave away an Electra Cruiser bike online, and in-store we encouraged people to collect caps and spell 'low calorie.'" Consumers sent in caps for an Izze T-shirt.Cadbury Schweppes' Sunkist brand had success targeting its teen market with a go-cart display this past summer. The dealer-loaded display held cases of Sunkist and included a go-cart to be raffled off by each retailer. About 1,500 stores, mainly grocery, participated. Account-specific promotions have been a big hit for Port Washington, NY-based Apple & Eve and Northland juices. "For our Northland brand, we initiated the 'Drink to Pink' program, an initiative all about helping women improve their health, in partnership with the BCRF [Breast Cancer Research Foundation]," says Brad Angevine, vice president of marketing."We raised more than $150,000, more than three times what we had anticipated," he says.The partnership was promoted on product labels, neck hangers and other P-O-S. Custom marketing programs were also created with key retailers, such as Price Chopper, Pathmark and Roundy's Foods.A Big Apple Circus promotion has proven so successful for the Apple & Eve brand that it's now in its third year. Store circulars, neck hangers and in-store posters alerted customers to the fact that the purchase of an Apple & Eve product entitled them to discounted circus tickets.Angevine says campaigns such as these help excite and involve retailers while attracting consumer attention.

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