Creating a blockbuster flavour for cold drinks

Creating a unique flavour and brand of soft drink certainly has its challenges, but the benefits far outweigh the risks of replicating an existing brand flavour.  While the global economy is still struggling to get to its feet, the inclination of the FMCG manufacturing sector is to play it safe and stick to where and what the consumer is buying.

Challenging that thinking has to be that the economy will not be flat on its back forever and affordability of leading brands will reoccur. Cheaper, “lesser” brands will struggle to hold their own as the mega brands introduce incentives, consumer promotions and competitions to lure the consumer back to their favorite original brand. 

Reference to the “lesser” brand is because consumer perceptions, even if the product tastes better, will be inclined to sway in favour preference of the most advertised and more aggressively marketed brand. Kalex knows this all too well, having tested many cold drink flavours in branded and blind taste tests.

So if replica brands are likely never to take the top slot from global mega brands, what is the alternative? The most creative flavour for cold drinks now would be one that isn’t orange, or lemon/lime, or grape or even a cola. It will be something that transcends the existing pallet set of what we find in the retail store fridges.

Truth is that the average soft drink manufacturer has chosen to replicate existing brands, irrespective of the number of identical competitors, simply because the marketing, advertising and brand-building has been done by the market leader. And let’s face it, it is easer slip streaming an existing brand than to create a brand new flavour, make it popular and distribute it far and wide.

But here’s the conundrum. As the market leader is unlikely to create or innovate an-all new flavour from scratch, where will the next market challenger come from? What will it taste like? What would you call it?

When Red Bull first made an appearance on the retail shelves, all it was was coffee in a cold drink. The caffeine or guarana content made it offer something extra to the consumer. Its flavour was not based on coffee, but something completely unfamiliar to consumers (original flavour). And it can be argued that its flavour is not particularly appealing, but people drink it in vast quantities. To give you some idea of how much people drink Red Bull, consider that the brand carries two Formula 1 Grand Prix racing teams in what is arguably the most expensive sport in the world. Red Bull singularly sponsors more extreme sport teams and events than any soft drink on the planet ever has or ever will!

They did this because they devised a unique combination of refreshment and physical stimulation. Comparing Red Bull to Coca Cola for example, Red Bull has a larger young adult market share and achieved this in less time than Coca-Cola’s enviable market leadership track record did, going back more than a century.

And as original as Coca-Cola was in its day, copied and followed by Pepsi, the reality is that there are more cola replica competitors than ever before. It’s a fact that during lean economic times, entrepreneurial innovation and activity grows at extraordinary rates. FMCG manufacturers look to compete on price and distribution in an ever-shrinking market. Stock levels and facings are put under pressure as retailers find themselves needing to provide their customers with value alternatives. And so cheaper replica brands are brought to market, each one fighting for a small slice at least of a massive potential market.

The paradigm however remains. To be a single digit percentage competitor in a massively competitive retail consumer segment will always remain attractive to someone who has achieved more than they expected and as long as income exceeds running costs, the business model and strategy will seem sound.

But even the giants can be challenged to respond. It didn’t take long for even the largest branded soft drink in the world to introduce a so called “energy drink” to fight in the Red Bull sector. However the fact remains, the first original brand to market is likely to dominate that segment, no matter what.

The intellectual challenge to soft drink manufacturers has to be strategic. Where will your replica brand be in 5 or 10 years time? What do you do when you are running at maximum consumer demand for what you have been able to create by copying the market leader? Will they do the classic mega-brand thing and give you an offer you can’t resist, wiping your brand off the shelves once they have control, or will they simply outshout you, drowning your brand in insignificance?

In the late 60’s and early 70’s a cold drink range called Groovy hit the market in South Africa. It comprised of every flavour derivative that existed on the retail shelves (Not dissimilar to Virgin soft drinks). Groovy was cheaper than Coke, Fanta and Pepsi and very quickly the new brand stable stole significant market share from the market leaders.

Supported with clever marketing, Groovy Cola, ginger beer, orange, lemonade, grape and passion fruit hurt even the Schweppes brands that held their own against the might of Coke.

To compete, Coke brought out cans as a competitive packaging alternative and Groovy met the challenge within weeks.

Coke had no option but to buy Groovy out completely. They downgraded manufacturing volumes, forcing consumers to buy the original brands again. When Pepsi challenged Coke by promoting purchase incentives, Coke trundled Groovy Cola out as a “fighting brand” and this buffer strategy to protect the mega brand continued until Pepsi was so severely weakened in the market that it disappeared from South African shelves for some tim

The point is that the value of replica brand value, even in the gigantic cola soft drink consumer market is likely to have a finite threshold beyond which growth will only come from competitors buying each other out, or simply going out of business.

The future of the soft drink market is not set in stone. It is not guaranteed a straight and smooth road into infinity. Truth is that consumers would probably switch to a new original alternative, if someone was just brave enough, bold enough and confident enough to dare try to be the first of its kind, just like Coke was and Red Bull did so much later.

Do you have what it takes? If you do, Kalex would love to chat with you and help develop the flavour combination that will turn the soft drink market on its head!

www.kalex.co.za

With an on-site laboratory, no other flavour supplier can provide the facility to create and perfect a unique consumer soft drink flavour.