Sparkling Performance for Talking Rain

It’s been a 25-year journey for Talking Rain, but the company has finally created a coast-to-coast hit that has distributors clamoring to be part of the action.

In the past two years, after tinkering with functional products behind its functional Twist and Activwater lines and stalwart Sparkling Spring Water product, the Seattle-based company has turned its long-neglected Sparkling Ice product into a monster hit.

In May, Sparkling Ice hit nearly $56 million in sales, according to IRI – up a whopping $13 million from the previous month in the channels that the service tracks. It’s had two years of four-digit growth year-over-year. And that’s not counting accounts like Wal-Mart, where the brand also thrives.

The numbers indicate what the company itself says: that the product is moving broadly into chain accounts like supermarkets, drug stores and mass retailers. And things will move even faster up and down the street, as the brand’s chain accounts mean that it’s being targeted by beer and independent soft drink distributors who may have found a low-calorie carbonated product that’s unaffiliated with the Red, Blue or White systems.

“I think it’s safe to say Talking Rain has a powerful thunderstorm in their portfolio,” noted beverage blogger Gregg Shore recently.

The product is simple – a zero-calorie, flavored, artificially-sweetened carbonated water with eight fruit flavors. The keys to its increased sales are pricing consistency – it rarely strays from the neighborhood of between $1.19 and $1.29 MSRP — with the occasional 10-for-$10 deal – and a recently improved flavor, according to CEO Talking Rain CEO Kevin Klock.

“When it comes to new age, you’ll see guys for a $1.59 and the next day at $.59 and $.79,” Klock said. “We think it’s fair to the consumer to be more consistent, so that when it’s on deal it’s a good value and when it’s off deal it’s still inexpensive. We’ve held the dollar, and we bring a really great value to the retailer because it helps them maintain margin.”

What’s interesting is that the success of Sparkling Ice is something that the company had planned for one of its other brand, like non-carbonated, lightly sweetened Twist or sports-oriented Activwater, both of which carry more interesting packaging and branding elements. Talking Rain honchos who preceded Klock – including talented CEOs Bill Meissner (currently the chief over at Jones Soda) and Kevin McClafferty (now Marley Beverage’s president), among others – put resources and energy into building a nationwide distribution network, presumably for Twist or Activwater to ignite national sales for the company. But while neither product turned into a breakout hit, that network was in place for when Talking Rain retrenched behind Sparkling Ice.

“It’s an enjoyable moment,” Klock told BevNET. “If you look at it, what happened is we spent a lot of time in the summer of 2010 going back and assessing why one flavor of sparkling ice [orange mango] sold so much better than the others… and we went back and focused on making sure the experience was consistent among flavors – and in September of 2010 the growth started.”

Once the flavors were straightened out, grocery availability began to jump – from about 49 percent ACV to nearly 80 percent ACV, Klock said. The brand retails consistently for $1.29 for a tall, skinny 17 oz. single-serve “candlepin” bottle. The distribution is a roughly even mix between Broadline, DSD and direct shipping.

As a result of the increasing demand, the company has expanded into a production agreement with Mountain Valley Spring Water in Arkansas; Mountain Valley agreed to upgrade one of its five bottling lines to accommodate the product in February.

But more recently, in the wake of an announcement by New York Mayor Michael Bloomberg that he would be fining sellers of high-calorie sodas of more than 16 ounces in size, the demand for a reliable go-to carbonated beverage has had at least one high-profile distributor scrambling to reach out to Talking Rain. Other industry figures have been buzzing about the product as well.

“There’s one cool thing here,” Klock said. “It’s our 25th anniversary – sometimes brands take a while to come along; I don’t think the rest of our country knows it’s our 25 anniversary, but locally it’s a big deal.”

If the progress continues it might also be a big deal nationally, soon enough.