While other brands in the category grab the spotlight, Talking Rain continues to hum along on its way to potentially becoming a billion-dollar brand.
As one of the earliest players in the zero-calorie flavored sparkling water category with its flagship line Sparkling Ice, the Preston, Washington-based company may seem a bit dated compared to some of its newer competitors. Rather than dipping into exotic botanicals, artistic labels or brash marketing, Sparkling Ice’s core line uses an artificial sweetener (Sucralose) and natural flavors to deliver familiar fruit-forward SKUs like Fruit Punch and Lemonade. But its approach is clearly working: according to Nielsen data through January 29, Talking Rain has grown 10.6% over the last 52-weeks (outpacing sparkling flavored water category growth of 7.2%), generating around $778 million in dollar sales and putting some distance in market share between it and its nearest competitor, National Beverage Corp.
More than that, the past year has seen the company’s broader vision come into focus, with a balanced strategy of growing through innovation and continuing to execute against business fundamentals.
Speaking with BevNET last week, Talking Rain CEO Chris Hall, who has been in the role since 2018, said the company was coming off a year of “huge organic growth” driven by the core Sparkling Ice line, which now boasts 17 flavors. Aside from some instances of flavor shortages, Hall said the company has managed to avoid out-of-stocks over the past year, and average pricing has remained flat while volume rose 10.5%, according to Nielsen.
That appears set to change, however. Hall noted that Talking Rain’s portfolio is now broad enough to leverage for promotional purposes, so the company is adjusting its promo frequency for this year, as well as working with retailers to consider a possible front-line price alteration for the product, “based on all the pressures that we’re all facing.”
Along with its range of flavors, Sparkling Ice is juggling different formats in different channels. Priced anywhere from $10 to $14 depending on the retailer, the brand’s variety 12-packs are its fastest growing item, underscoring consumers’ interest in premium alternatives to commodity CSDs, Hall said. The next step is going national with its 1 liter bottles, which were tested on the West Coast last year, a move that ticks boxes for consumers seeking multiserve items and retailers looking to boost revenue.
Even in hot innovation segments like energy, Sparkling Ice has continued to punch above its weight. Since the brand introduced its +Caffeine line in 2018, Coca-Cola, Pepsi and Monster Energy have each launched their own caffeine-infused flavored sparkling waters in an attempt to merge the two growing categories. In the meantime, the six-SKU +Caffeine is set to pass $100 million in retail revenue this year, Hall said, and recently moved into 4-packs in select markets. That line will see its first new flavor, Watermelon Lemonade, as well as the introduction of a variety pack, in the coming months as it continues to expand nationally.
At 16 oz. and 70mg of caffeine, the product offers a lower dosage packaged in a format familiar to energy drink consumers.
“When I look at who’s consuming it, it’s really two things,” said Hall. “It’s the Sparkling Ice consumer who’s on the go and wants a little bit more than just the refreshment aspect in terms of functionality. And there’s also the people that we refer to as the variety seeker that could be an energy drink consumer, or they could be a CSD consumer — they’re just jumping around. And now we’ve given them an option to consume on-the-go.”
Talking Rain’s strategy with its ionized alkaline water line AQA (formerly Talking Rain Essentials) is similarly situational. Hall said the brand was not seeking to “go head to head with the major players” but rather to leverage existing manufacturing and distribution capabilities to enter a high-growth sector; “We wanted to… create a brand that we could actually do other other innovation under,” he said. With Essentia being integrated into Nestlé’s distribution system following its sale last year, Talking Rain’s national DSD network is well positioned to fill in any potential gaps with its 1 liter bottles. “We’re trying to go where there’s not a product that’s available,” Hall noted.
However, Talking Rain’s current innovation is coming under the Sparkling Ice banner. The Superfruits line features all natural ingredients, allowing the company to unlock natural retailers which declined to carry the brand’s core drinks because they contain Sucralose. Available in Dragonfruit, Prickly Pear and Blueberry Acai in 12 oz. slim cans, Sparkling Ice Superfruits uses stevia and is currently being tested in a “handful of small markets” in the Midwest, with a wider launch still yet to be confirmed. Along with an opportunity to introduce on-trend immunity benefits with a high-antioxidant drink, Hall noted the project also provided the company with valuable experience in working with unfamiliar ingredients and processes, such as using natural sweeteners and preservatives and cold-filling.
“I would say it’s holding its own, but tobe straightforward on it, this is really just our way to test new ingredients, new technologies, and really prepare the company for the future and just make sure we’re ready for what’s coming,” Hall said.
That approach to innovation was also behind the launch of Sparkling Ice Spiked (4% ABV), introduced in November 2020 just as the category was on a seemingly unstoppable ascent. The line was developed, Hall noted, in recognition that consumers were already using Sparkling Ice as a mixer, presenting the chance to create a differentiated product (zero sugar, ‘bold’ flavor) with high brand awareness. He said the line has succeeded in delivering against expectations, though “a lot has changed during that time, which is fine with us.” The experience showed the brand that it could iterate rapidly, having moved from concept to launch within four months and assembled a complete alcoholic beverage distribution network within 18 months, while also shifting to a natural sweetener during that time.
“I think we did demonstrate our strengths and our ability to move when we need to,” Hall said. “I’d be remiss to say that I’m a little disappointed that this thing isn’t a rocket ship, but I will say we did deliver a great product. It’s just that the category shifted while we were basically getting this up to full speed.”
As for its marketing approach, Hall said Talking Rain is keeping things simple with its new campaign called “Live In Full Flavor,” which highlights the brand’s pillars of “fun, family and flavor.” While that goes through traditional digital channels, it’s also leaning into its array of influencer partners, which includes race car driver Leah Pruett.
With numbers rising and infrastructure in place to keep scaling, Talking Rain has little reason to shake up its flavor-first approach and family friendly branding, even as Hall sees the category evolving to include more functional and hybrid products.
“We’re highly focused on continuing to grow the base business as far as great flavors, and then supporting the +Caffeine line and then really figuring out Superfoods, that’s really our main focus right now.”