A look at the disruptive marketing trends for beverage sales
Thursday, April 28, 2016
PepsiCo recently hired veteran CIO Jody Davids to steer the brand's IT strategy going forward. What is particularly interesting is how this strategy will also lay the foundation for the marketing plan ahead. Davids will be taking her 35-year-career leadership skills to enhance IT for all beverages under the Pepsi brand and digitize their growth.
A major challenge facing Pepsi and other beverage brands is not sales, but how to hook millennials who are not as enamored with the standard soda choices. Marketing to them would mean taking on the newer and more disruptive brands — the ones that promise healthier snack alternatives and innovative beverages.
It's no longer about sustaining the brand image but creating a new one, and more importantly reaching out to these new customers through various digital platforms. Anyone would expect the IT strategy to include automation of business processes and analyzing of data for business insights. But it seems Pepsi is planning to spend more on enhancing their digital footprint to court millennials, who use social media and smartphones to engage and interact with brands today.
A glimpse into some of the beverage buyer statistics would show the need for disruptive marketing tactics, especially for brands like Pepsi and Coke that rely heavily on carbonated drinks for their sales. While the refreshment beverage industry has seen a 3 percent growth overall in the past year, carbonated beverages have gone down by 3 percent.
The average amount spent per buyer on refreshment was about $217, but those who focused on natural refreshments were happy to spend about $30 more. These shifts in the food and beverage industries have the potential to disrupt the very DNA of companies like PepsiCo.
These changes are driven by consumer as well as business forces, transformational IT, digital convergence and innovation, transparency of labels and sustainability demands. Most of all, brands have to deal with the intersection of health and nutrition with taste and lightness, something that the disruptive new entrants have been successful at doing.
Take a look at WellWell, a new cold-pressed juice, which is about to debut at Whole Foods. Focused on consumers with an active lifestyle and stressing functional recovery, this replenishing post-workout drink is already generating interest among millennials, beyond athletes and people who lead active lifestyles.
But that's not all the reasons for the interest it's generating. The marketing campaign connects people with the founders — busy New Yorkers seeking a healthier option for a recovery drink — and their unprecedented launch partner, Whole Foods.
Another beverage segment that has seen tremendous disruption is beer. According to most marketers, the reason why craft beer has seen such phenomenal success is because Americans got bored with beer. Just as they were veering off in search of sweeter flavors, craft beer plunged into the scene.
Now, beer sommeliers are all set to tap into a wider customer segment with products like hard root beers. The hard soda trend connects the traditional taste buds with the growing demand for sweet and more flavored alcoholic beverages.
Evidence is in the growing sales figures of fruit beers, which grew 82 percent in revenue in the last year, while cider sales increased by 75.4 percent between 2013 and 2014. All this while the beer industry has lost 10 percent of its market share to wine and liquor drinkers.
When you look at the marketing strategy for these sweeter drinks, you will see they have caused disruption — not just with their innovative products but with their marketing as well. Instead of segregating "girly" drinks from the more masculine offerings, they have blended these lines to make the newer offerings attractive to all millennial customers, despite age and gender.
That doesn't mean all the giants are failing. Brands like Heineken have successfully tapped into the new trends with products like Strongbow, the No. 1 cider brand globally. Despite declining sales in 2015 — the cider market grew by just 10.8 percent compared to 71 percent in 2014 — Heineken is confident this popular beverage is all set to take over the U.S. market like it did in the U.K.
The cider industry is slumping, but Strongbow has managed to grow eight times faster than competitors and against the wider beverage brands. The brand targets educated millennial consumers with details on family-owned and natural roots harvesting, stressing authenticity and coming across as a beverage with history.
PepsiCo and Davids have their work cut out for them, but these examples show how the right marketing strategy and message can be the key to a product's success.
- 8 exercises for strengthening your business writing
- Millions of high school students set for success: Celebrating Career and Technical Education Month
- EPEE: Cooling has an essential role to play
- Digital natives are more likely, more eager to go back to the office
- Writing the letter that gets you more referrals
- 101 bad business buzzwords — and why you should avoid them
- 9 steps to more concise business writing
- The 7 P’s marketing mix of home-sharing services: Insights from over 1 million Airbnb reviews
- Report: 39% of contractors say it’s business as usual during COVID-19
- Study: How ‘empathy lens’ marketing can increase your brand’s profits as COVID-19 continues
- Not ‘The Jetsons,’ but close: Walmart testing drone delivery of COVID-19 testing kits
- How dentists can cope with the broken personal protective equipment supply chain
- Why there’s no such thing as instant coffee
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How