Summer 2006 Soft Drinks in Review

Another summer is in our rear-view. As usual, it went too fast, like a cold drink on a hot day. Now, it’s time to take a look back and review the good, bad, and ugly of the beverage industry’s peak season:

Coke’s New Products – Coke Blak, Gold Peak, and Godiva Belgian Blends went national over the past few months – not that many consumers noticed. Coke is continuing its game of “catch up” with the rest of the industry, but, unfortunately, these products simply haven’t brought anything original and/or innovative to the marketplace. Coke needs to launch something unique, and quick.

Pepsi’s New Products – Pepsi fares a bit better than Coke. Their Ben & Jerry’s products are nicely done – if you like liquid ice cream – but it will be surprising if they don’t get called out on their high calorie and fat content. Pepsi Jazz was nothing to write home about – is it Pepsi’s final attempt to try and find some new dollars in the CSD category?

Green Tea Energy Drinks – We like the trend toward sparkling green tea energy drinks. Using green tea gives a product more credibility and mainstream potential than something like Horny Goat Weed or some other exotic herb that consumers are not familiar with. It makes the energy drink’s flavor more familiar to consumers who are new to the category or who simply can’t stomach the taste of other energy products. While there are several small players in this space, it’s the entry from AriZona that could really help launch this segment.

Energy Drinks – As the energy drink category matures, new entries continue to pour in. Aside from the green tea blends, the most interesting move was BAWLs Guarana’s entry into the 16 oz. can market with its textured can. Otherwise, it’s more of them same – lots of knockoffs. The summer’s most unique entries were from companies trying to create new subcategories: Products such as Hydrive, Purity “Be Well,” Naked Energy and Phat Phruit are hoping that consumers are looking for crossover products. These companies have an opportunity to help shape the market, which is still in its infancy.

RTD Juices – The outlook for the juice category is not good, as consumers continue to shy away from high-calorie, high-sugar products. Unfortunately, the most notable story in this category is Cadbury’s new packaging for Nantucket Nectars. The new bottle and label makes the product look bland and boring. This won’t do anything positive for the brand or category.

RTD Tea – Teas, on the other hand, continue to grow in number and potential. Most of these products, such as New Leaf ’s Blue Tea, Solebury Organic, and Kalahari, are debuting in the premium and super-premium categories, which is really where the most innovation is happening. Snapple also tried to enter these categories with its line of white and green teas, but the results were less than impressive, in our opinion.

What’s to come in Autumn? Glaceau has got its money (see pages 14 and 16), AriZona has its momentum, and Coke and Pepsi have distribution. We’re excited about energy, about water, and about real innovation, which we’ll take anywhere we can find it – so long as it comes in a bottle or a can.

John Craven is the founder of beverage-industry watchdog The BevNET.com, based in Cambridge, Mass. The BevNET.com’s goal is to test nonalcoholic beverages — primarily soft drinks — and to provide a written critique of each one on its Web site. With more than 1,100 reviews posted since 1996, The BevNET.com has become an internationally recognized resource for beverage industry professionals.