I once heard my cousin Debbie, who was in a punk band in the early eighties called “Bitch Bitch Bitch,” say to one of her bandmates, “I need a new guitar, but it’s got to be used; I’ve got to learn from it.” Thinking back, that phrase, although woven into the flannel-and-sweatencrusted recreational hobbies of my rock-star-aspiring cousin, delivered a clear message: Learn from the past. Of course, the fact that you have absolutely no idea who Bitch Bitch Bitch was – and that Debbie now works at Sears – means that she might not be the best role model, but let’s give it a try.
Since this is a magazine committed to innovation, I’d like to take the story about my cousin’s band and use it as a lens into the mistakes of innovations that have occurred even with beverages that have been enormously successful. At this point, everyone’s already written about the organizational disasters that were New Coke, Crystal Pepsi, Orbitz, Bud Dry and others. Everyone’s an expert. Why it didn’t work, what could have been done differently, etc.
Rather than speak ill of the dead, I’d rather reveal some of the dirty secrets of the living. It’s important to take the time and point out that successful beverages are rarely seen as successes in the moment, just like most truly innovative ideas. The Internet kicked around for a long time as a military program. “Cheers” almost got canceled. You get the idea. There are many failures, chance events and personal struggles that are a large part of success. The back story, if you will. Let’s take a look at a few back stories in the spirit of teaching a few lessons about your prospective new liquids.
In 1994, Quaker Oats purchased Snapple from a Boston investment firm for $1.7 billion. In 1997, Quaker sold it for $300 million. From 1994 – 1997, Quaker made a number of moves that weren’t good for business. First, Quaker’s separate Gatorade and Snapple distribution systems didn’t want to play well together. Second, a marketing plan wasn’t written until almost two years after the acquisition. As a part of that marketing plan, brand-building spokesfolk Howard Stern and Wendy the Snapple Lady were fired. Consumers revolted, the brand lost a lot of volume, and it was sold to Triarc at a $1.4 billion loss. Triarc brought Wendy the Snapple Lady and Howard Stern back immediately.
Lesson: Brand equity comes before brand sales. Brand equity is the toolbox for sales; treat it gently, develop it strategically.
No, I couldn’t resist. I had to write about New Coke – but as a success. See, Coke II was a less-noticed part of the aftermath of the New Coke debacle. Debuting in 1992, it was the last packaged version of what had been touted seven years earlier as New Coke. From 1992 until 2002, Coca-Cola sold Coke II in several Midwestern markets, especially Chicago. In fact, bloggers say Coca-Cola Zero is the old Coke II formula in diet form. It turns out that the people who were drinking Coke II were primarily Mexican-Americans and African-Americans who appreciated the sweeter-tasting formula. What were they drinking before? Pepsi and RC Cola were their favored brands.
Lesson: Mass marketing has its limitations, but smaller audiences or communities might give you the spark for the next big idea. All Vodka Everywhere
The decades of the 1970s and 1980s were reserved for the beer wars. The breweries were all over the national networks night after night showing aspirational lifestyles – or beat up jocks – to the masses. Meanwhile, advertising for old buddy vodka remained in the basements with a light coating of dust. Nevertheless, all during the television ban on liquor advertising, vodka companies were getting to know their biggest influencer; the bartender.
Vodka is an easy spirit to mix; it is flavorless and it allows for every bartender (at home or in behind the bar) to be creative, whatever the skill level, and as it focused on its image in the bottle instead of over the airwaves, it more than made up for its advertising dormancy.
Sure, vodka lost share for awhile – but as a result of the on-premise boom it created, spirits have been outpacing beer for the past decade.
Lesson: Think long-term. Start planning for the next big thing now; and be willing to wait for the payout.
Innovation goes in and out of fashion depending on the priorities of an organization. But if it isn’t careful, the same mistakes are always made, regardless of the history. It’s common knowledge that companies repeat what made them successful long after it starts to damage them. By seeing through the romantic nature of a brand or company’s success, straight through to the back story, you have a much better chance of applying those lessons to what you’re doing in the present. Think learning from your mistakes isn’t innovation? How about asking Steve Jobs?
Darrell Jursa has worked for the Coca-Cola Company, several big ad agencies and currently runs Liquid Indulgence, a company that creates alcohol and non-alcohol beverages for established and start-up companies.