Upfront 2003: Soft Drinks

While a flavor of the month, literally, is common in Japan, new soft drink rollouts had been slow-going in this country. Sure, there was a new diet drink here, a new juice there, but nothing like the new-product frenzy that has ensued of late. This year, cold vaults at a convenience store near you will continue to be as crowded as a fraternity in a phone booth, with forthcoming launches of tropical-flavored Sprite Remix, orange-flavored Mountain Dew LiveWire and possibly Vanilla Pepsi.

These new innovations come after last year’s successful rollout of Vanilla Coke and not-nearly-as-successful debuts of Pepsi Blue, Dr Pepper Red Fusion and dnL.

“Without these introductions, there’s no growth in the category whatsoever,” says Debbie Wildrick, category manager for beverages at Dallas-based 7-Eleven. “Unique beverages like Mountain Dew LiveWire and Code Red can bring some of the younger generation back into carbonated soft drinks.” Last year, Coca-Cola managed to grow its market share 0.6 percent on the back of Vanilla Coke to give it 44.3 percent of the carbonated soft drink category. Pepsi fell 0.2 percent to 31.4 percent.

Two-year-old Mountain Dew Code Red, which kicked off the whole innovation frenzy, is still going strong with 93.5 million cases sold last year, making it the No. 13 carbonated soft drink. Vanilla Coke was the No. 15 drink with 90 million cases sold, per Beverage Digest. Pepsi Blue, conversely, sold only about 17 million cases.

With these new introductions comes significant ad spending. Last year, Pepsi shelled out $27.5 million on Pepsi Blue and $6 million on Code Red, says CMR. BBDO New York crafted both efforts. Coca-Cola ponied up $23 million on Vanilla Coke ads, created by The Martin Agency, Richmond, Va.

Despite the swirl of attention new brands bring, both Coke and Pepsi have realized they need to stick with the brands that brought them to the dance. Both cola giants will tout their core brands with renewed vigor this year.

Last year prime-time network spending for carbonated soft drinks was off significantly, down 12.1 percent to $272 million from $309 million in 2001. Coca-Cola Classic pulled back its spending following a handful of ham-fisted ad efforts. Spending on the brand fell 39 percent to $95 million. Brand Pepsi also saw a steep decline of 29.2 percent from last year’s spending of $73 million. Not surprisingly, spending across all media in the category fell 12.9 percent to $618 million.

That trend appears to be reversing, as Coca-Cola burst out of the gates in 2003 with its ubiquitous “Real” campaign, created by WPP Group’s Berlin Cameron/Red Cell, New York. The top cola company has vowed to spend $20 million on cable for its “Do what feels good” Diet Coke ads, via Foote, Cone & Belding, New York. Diet Coke spending has been all over the map the last couple of years. In 2001, it amounted to $41 million, compared to just $16 million the year previous.

That’s not to say Pepsi has been quiet. It kicked off this year with heavy first-quarter spending on the national launch of lemon-lime entry Sierra Mist, including a BBDO-produced Super Bowl spot. Diet Pepsi’s “Think Young. Drink Young” campaign was also promoted during the big game. Pepsi spent $32 million on its most popular diet drink last year, compared to just about zilch in 2001.

The flurry of Pepsi’s new brand work began during the Academy Awards with Destiny Child’s Beyonce Knowles starring in her first ad, shot by Spike DDB, New York. Pop star Shakira also appeared in a new spot from BBDO. Non-carbonated soft drinks like Gatorade and Aquafina saw increases in media spending last year. Drinks “without gas” were up 11.5 percent during prime time, laying out $48 million. The segment saw a 4.8 percent bump to $190 million across all media.

The beverage giants will continue to invest in the exploding non-carbonated arena, as illustrated by the new “Purity guaranteed” Aquafina campaign, via Element 79, Chicago. Coke spent less on Dasani and Powerade last year compared to 2001. However, new creative for Dasani and others is expected later this year.—

Prime-time Network Spending in 2002: $320 million*
Hot Buttons: In the midst of a period of rapid innovation unlike any this country has ever seen, the soft drink giants have vowed not to lose sight of their core brands.

Category: Soft Drinks
PERIOD: Jan 1, 2002 – Dec 31, 2002

Advertiser: Prime-Time Network TV $$$
Pepsico Inc.: $134.5 million
Coca-Cola Co.: $122.7 million
Cadbury Schweppes PLC: $107.1 million

Top Programs for Soft Drink Advertising: Expenditures
NFL Monday Night Football: $11 million
Simpsons: $6 million
Survivor: $5.8 million
Source: Nielsen Monitor-Plus