We Already Had A V8

While the prototypical good-for-you drink marked three quarters of a century this year, it had to change. Although it’s managed to stay consistent with its original mission to provide a drink for the consumer who knows that veggies are good but doesn’t have the time to prepare them, V8 pulled itself out of an innovation lull – and into a high-visibility deal with distributors like Coca-Cola Enterprises – by crossing the produce aisle and marrying itself to some sweeter fruit flavors.

In all likelihood, however, it was a forced union. Staying true to its space-age “drink your vegetables” motif had, over the years, left the brand as crusty and old as John Glenn and his fellow Mercury astronauts. The story of how V8 made the move from space age to information age, adding new SKUs that include – heresy! – fruit juices, offers an interesting lesson in how a well-established but ancient brand can keep itself relevant and entice a new generation ?of consumers.

In so doing, the brand managers also made the product into an important part of parent company Campbell’s bottom line. In rolling out V8 Splash, a fruit juice mixture, and more recently and impactfully, V-Fusion, a daring fruit-and-vegetable juice combination, the V8 brand has been revived from its old-age doldrums faster than you can ?say “Cocoon.”

“They’re taking a good corporate band name and branching it out over good-tasting [fruity] beverages,” said Marty Brown, president of the California-based beverage consulting firm, Power Brands. And the market has responded.

Even as second-quarter earnings for Campbell’s fell 3.9 percent in February, according to the Wall Street Journal, V8 put in a strong performance. Information Resources Inc. reported that sales from V8 Splash and V-Fusion were up 12.46 percent and 82.25 percent, respectively, for the past year. V8 Splash sales in supermarkets, drugstores and mass merchandise outlets – excluding Wal-Mart – totaled more than $61.1M for the year ending March 23. V-Fusion’s sales topped $75.1M. CCE reported that its V8 partnership was responsible for 10 percent of the volume growth of its still beverage portfolio in the last year.

“We can’t keep it on the shelf. We are making V8 V-Fusion 24-hours a day,” ?said Juli Mandel Sloves, a spokeswoman ?for Campbell’s, which purchased the brand in 1948.

Not a bad turnaround for a brand that was becalmed in the center-store doldrums. Lately, all the excitement in the juice category has rested in the new produce-centered lines of superfruit drinks like POM Wonderful and Naked, rather than in the shelf-stable aisle. Even the once-innovative Ocean Spray has taken it on the chin, and attempted to branch out into energy drinks, of all things.

But rather than trying to beat the produce-centric superfruits, V8 joined them, and did so while playing on its own halo as an extremely healthy, if not “super,” product.

Today, the company that has been selling a blend of tomato, carrot, celery, beet, parsley, lettuce, watercress and spinach juices for the better part of a century, is now offering on-trend flavors as hip as the hottest beverages out there. In the mood for an Acai Mixed Berry beverage? What about some Blueberry Pomegranate, Strawberry Banana, or Peach Mango liquid refreshment? V-Fusion has a variety for each – with a vegetable base that is barely detectable to the taste buds. And the juice’s color is no longer just tomato red: it spans the rainbow to include purple and orange.

“If you appreciate the core benefit around vegetable nutrition in a beverage, your imagination can run wild,” said Darren Serrao, vice president of beverages at Campbell Soup Company.

Still, it took a long time to start running at all – much to the grumbling of distributors. For years, the company only saw fit to push out marginal line extensions that put the product in the hands of those who were already familiar with the brand, rather than extending its reach through fruit.

And that risk aversion apparently held ?off innovation at the company for a long time, making it seem like a product only drunk on airplanes and at brunch, mixed into a “Bloody Mary” with its eternal ?companion, vodka.
For one industry insider and veteran of Coca-Cola Company and Coca-Cola ?Enterprises – which has been distributing ?V8 since 2007 – the question is: “What took so long”

There’s a good point there. After all, check out these SIZZLING line extensions: Low Sodium! Spicy Hot! High Fiber! Calcium Enriched! No wonder it generated the excitement of a Tuesday night Bingo game.

Everyone loves a good “Bloody,” of course. But for a long time, the core consumer of V8 has been perceived to be as much an enthusiast of blood thinners as they are of cocktails.

When a brand reaches geriatric age, it can either slow down with its consumers – a la Ovaltine – or it can try to stay spry, and that’s finally what V8 has done.

After all, not everyone is keen on the old-fashioned V8 product, a fact even Campbell’s acknowledges. This gap – between those who drink V8 for health’s sake and those who were likely to forsake nutritional health because of the taste – read: KIDS – proved enough of a market segment to prompt V8 to add a splash of fruit.

The goal was to capture the purchasing power of those who don’t like the “zesty, tomato-y taste of original V8,”said Mandel Sloves. Campbell’s even gave this group a name: “red-rejectors.”

“We estimate that these ‘red rejectors’ make up 50 percent of the population and therefore a significant audience that we could reach with a new product just for them,” said Mandel Sloves.

So the innovation of a squeeze of fruit was a solid one. After all, the brand has always had a healthy aura. Consumers ranked V8 as the healthiest brand in the 2007 HealthFocus Trend Report, which provides analysis of food shoppers’ health and nutrition behaviors. Consumers were asked to rate brands – beverage and foodstuff – they believe are “extremely or very healthy by those who are familiar with the brand.” V8 captured 66 percent of the vote, beating 49 other brands for the top slot, including such wellness brands as Quaker, Kashi, Horizon Organic and Organic Valley – all of which tied for second place. Potential competitors to V8, such as Tropicana and Ocean Spray, ranked 12 and 19, respectively. Campbell’s ranked 24.

And it’s worked. Households with kids, adults 25 and over, are the ones buying the V8 fruit lines as core consumers, according to Mandel Sloves. Part of what has attracted the families to try V8 Splash and V-Fusion is the recognition of the original brand name, say beverage analysts. It’s almost like beverage nepotism – picking up a brand on the basis of a parent’s good name.

“Where it’s positioned, it has very, very good, solid brand name recognition,” says Brown. “If you think about a tomato based product, you’ll think about a V8.”

But before to the decision to add the fruit, that may have become as much of a liability as it was an advantage.

Campbell’s wouldn’t provide details on how and when, specifically, the decision emerged to juice up the brand. Nor did it say whether there was any opposition to the move. According to Mandel Sloves, however, there was “great enthusiasm for the opportunity to evolve the V8 brand.”

And decades of effective advertising for V8 – showcasing the healthfulness of vegetables in a bottle – may have also paved the way for new customers to try V8’s fruitier varietals.

“V8 is capturing a whole group of ?consumers who are reinforcing the fact ?that they’re drinking something healthy because it has the V8 label,” said the ?veteran executive.

The next challenge for V8 is to keep up with the demand. Increased production space for V8, V8 Splash and V-Fusion may require capital investment in the near future. According to a transcript from the second quarter press conference in February, Bob Schiffner, senior vice president and CFO at Campbell’s, said: “As far as the capacity is concerned … we are nearing capacity constraints … we will be spending capital starting this year into next year to add additional capacity in beverage.”

Doug Conant, president and CEO of Campbell’s, cited “a strong record of innovation” as driving the performance of the company’s beverage segment at the Consumer Analyst Group of New York Conference in February. In fact, beverages – i.e. V8 – represented the best-performing segment of Campbell’s business in 2007, according to a transcript from the event.

“We have migrated our positioning of V8 from merely a smarter juice choice among many on the shelf to a key weapon in the search for an easy way to consume more vegetables every day,” said Conant. He added: “V8 V-Fusion is ideally suited for consumers who are looking for vegetable nutrition without vegetable taste. As a result of the strength of this proposition, V8 V-Fusion has been the best launch in the shelf stable juice category in the past five years.”

There you go: an overnight success. At 75.