Functional Sodas A (QUALIFIED) SMASH

In a moment of accord, our two executive experts both express con•dence that CSD’s with value-added elements will eventually break through in the beverage marketplace. But they’re not so sure that anyone’s found the right formula yet. What’s your opinion? Let us know.

They’ll be a smash… eventually.

Since the dawn of time consumers have wanted to have their cake and eat it too, and this is no different. Consumers want great-tasting refreshment that they don’t have to feel guilty about drinking.The key is breaking down the second,“guilt-free” part into relevant, easily-understood benefits.

CSD makers know their consumers present a unique challenge: consistency. I’ve spent enough time chomping M&Ms in focus groups to know that CSD drinkers aren’t “Flavor Explorers,” they’re creatures of habit, drinking from a set portfolio of brands and flavors. They have always been less likely to look for fringe benefits and are more interested in the basic cost of entry requirements, taste and refreshment.

In recent years, however, CSD loyalists have been inundated with the message that soft drinks – not French fries,not Big Macs, not inactivity – are the root of all evil.And while the basic desire for great taste lies at the heart of their desire to drink CSDs,many will now be looking for functionality,if only to offset the newfound embarrassment of drinking (gasp!) soda.

On the non-carbonated side, functional beverages have been driving total category growth for over a decade. If they’re really serious about succeeding in the functional arena,makers of CSDs should pay attention to the lessons non-carbs have to teach.

To wit:

1. Be clear– not cute,vague or subtle – about the promised function. In the 1990s SoBe burst onto the beverage scene with a lot more than just attitude. The products had functional promises that were so clear, like “Energy” and “Power,” that consumers were more likely to remember their favorite product by function than by flavor. There have already been a few lackluster attempts at functional CSDs, and, without naming names,terms like “plus”are just too vague to gain any lasting consumer enthusiasm.

2. Deliver the bene•t. In this respect Red Bull set the standard, and has been handsomely rewarded for it.Early on,many beverage veterans were skeptical about its chances to succeed in the U.S.,mostly because it tastes like socks.But that hasn’t impeded Red Bull’s success one iota.Consumers don’t drink it for taste or refreshment, but for its promised energy kick. As I’ve personally found with energy drinks, function is more important than the drink’s aesthetic value:in the late 90s,we attempted to launch an energy drink with the intended point of difference that it actually tasted good. Consumers weren’t interested. The pungent taste standard set by Red Bull was strongly linked to the ef•cacy ofthe energy.Think ofit as the Listerine effect:ifit tastes horrible,it must be working. Conversely, one of the things that has slowed SoBe’s growth has been its failure to deliver effects like “Power.”

3. Have conceptual conviction, flexibility and patience. To some, these may be contradictory terms,but they are not.In fact, together,they are the most powerful tool true innovators have. Take Glaceau as a case in point.By the late 90s it looked as ifthe brand was failing. A larger company, with higher velocity requirements and stricter payback guidelines, surely would have thrown in the towel. But the folks at Glaceau had conviction in their concept, the •exibility to change it without destroying it, and the tenacity in the face ofdisappointment to see it through.As a result,they have successfully pioneered a new arena in beverages that taps into the heart of consumer health trends. They deliver a meaningfully differentiated functional beverage that consumers feel good about drinking.

I ultimately believe that just as functional benefits have redefined the face of the non-carb category,meaningful,clearly articulated functional benefits have the potential to re-energize carbonated soft drinks. They’ll be a smash, just as long as those basic requirements, taste and refreshment, aren’t left behind.