For decades, iconic soft drinks like Pepsi and Coca-Cola were the big players in the world of beverages. But a push by families towards a healthier lifestyle has driven many consumers to demand better choices when it comes to beverage selection. To meet this demand, a plethora of noncarbonated, non-alcoholic drink choices — from fruit drinks to teas and waters — have established their places on shelves. In fact, major soft drink companies have acquired many of these companies – for example, Coca-Cola owns Odwalla and Glaceau, maker of Vitamin Water; while Pepsi owns Gatorade, Tropicana and recently purchased the Naked brand of natural fruit drinks.
These beverages face a highly competitive CPG category with grocery shelves fi lled with options to imbibe, requiring plenty of marketing innovation to stand out.
“It’s a very fragmented category because there a lots of brands,” says Larry Martin, VP of marketing for juice leader Ocean Spray. “It’s a constant battle because retailers tend to shelve too many brands.”
While the beverage industry overall has performed better than other CPG sectors, it did shrink by 2% in 2008, according to the Beverage Marketing Corporation. However, smaller beverage segments geared towards health, such as energy drinks and fl avored waters, kept growing by percentages in the high single digits last year.
As the beverage industry has evolved, more companies have developed sophisticated digital strategies to drive brand engagement, which integrate into a larger brand marketing approach. These companies have often traditionally relied heavily on mass marketing such as print and TV — and that emphasis is still important, says Martin.
“It’s not going to mean we’re going to walk way from mass traditional vehicles for our brand,” he says. “But digital has become part of the mix – and we’re doing a good job of linking mass media to our in-store activities and digitally so that we’re communicating and engaging customers.”
Digital, though, can be a challenge for any CPG company, says Troy Kelley, chief digital officer for
Arnold Worldwide, which serves as the digital AOR for Ocean Spray.
“It’s a low-involvement category because it’s not a considered purchase – a beverage is not something you’d buy online and you don’t need to research it online,” he explains. “You’re doing everything at retail.”
But a strong digital platform, including loyalty programs and user-generated content, can be well worth the effort. It has the potential to serve as an important loyalty tool, relationship-builder and social media initiative.
“Ocean Spray has really made the investment in content and we’re always trying to drive deeper brand engagement,” says Kelley. “It also opens up a platform for direct messaging.”
With this interactivity comes not only brand awareness and product visibility for beverage brands, but also a database of loyal brand advocates that marketers can contact about upcoming events and partnerships the brand is undertaking.
Through partnerships with other health and wellness and active lifestyle brands, beverage marketers can highlight the overall message of their brand.
For example, Honest Beverages, a smaller brand which offers organic bottled teas, uses an annual partnership and sweepstakes with bicycle manufacturer Janis Bikes to highlight the company’s commitment to health, wellness and work-life balance. The partnership, the company says, offers an integrated approach to brand awareness and data collection.
“Our partnerships create brand awareness but also stimulate display activity at retail, and we always have an online component, so we’re driving people from retail to a contest online,” says Jesse Merrill, the company’s director of marketing.
Many smaller beverage marketers also rely on word-of-mouth, explains Jeff Cioletti, editor-in-chief of Beverage World. “They rely on a lot of sampling in places like Whole Foods, [and success there] really makes or breaks these brands,” he says.
The right target audience is also key for successful beverage marketing, says Kelley. For Ocean Spray, as with many health-conscious beverages, moms are an essential audience as they search for the right products to serve their children. “Moms are the big target for just about all the different CPG vendors,” he says. “Moms are online looking to win for their families, so by delivering something that is good for you and tastes good, you can really speak to the mom target in general.”
Mike Peluso, marketing manager for Nestle Waters and its Pure Life brand, which recently partnered with celebrity trainer Bob Greene and the American Heart Association, agrees that moms are an important target. “Moms are the chief wellness officers of the household,” he says.
Overall, consumer engagement will continue to be key for beverage marketers as brands continue to enter the marketplace and both leading and new brands seek to stand out.
“A commercial can only do so much for consumer engagement,” says Martin. “But, with the Web, we can get consumers to a Web site where they’ll be there longer and be more engaged.”
CAMPAIGNS
Ocean Spray wanted to reach and engage their core target audience of moms with an integrated digital platform created by agency Arnold Worldwide. Arnold had already created the highly successful mass media “Straight from the bog” campaign, which included print and TV ads, as well as a touring “Bogs across America” campaign. The company also wanted to promote a new drink, Cranergy, which targets a primarily female audience.
The Ocean Spray Web site features a “Cranberry Club” that invites comments from members, offers recipes and includes special coupon offers. The club’s membership has increased 50% year-over-year, according to Arnold. In addition, the site also invites hardcore consumers of Ocean Spray, called “Supercran Fans,” to engage further by reviewing samples, offering opinions and filling out surveys. The company’s digital efforts also include leveraging social media, both on the Web site through user comments as well as targeting women-focused blogs.
