It’s been a monthly ritual of mine spanning quite a few years by now: finding time on a weekend to sit down with a favorite relaxation beverage (lately it’s been Dogfish Head Indian Brown Ale) and write the column you’re reading now. But I’ll confess that, despite having spent nearly two decades following the beverage industry, I’m still a bit uncomfortable in this role. As I tell newcomers to the business who phone me for advice, after two or three months in the trenches, you’ll surely know way more than I do.
So, this month, I thought it would be refreshing, and maybe therapeutic for me, to fess up on some of the things I don’t know about beverages. Questions I wish I had the answers to, but that continue to haunt me. By the way, if you think you do know the answers, by all means send in a comment and let the rest of us in on it.
How valuable is prior industry experience in launching a new brand?
I’ve often discussed my admiration for the dedicated beverage tinkerers who’ve created brands like AriZona, Vitaminwater, Fuze and Monster Energy. Truth is, though, some of the most interesting, and sometimes successful, new brands have come from people from entirely outside the industry – whether we’re talking the coconut water brands Vita Coco, Zico and ONE, or SoBe, or Rockstar Energy, or functional entries like Function Drinks or Ojo eyecare drinks. Meanwhile, as I’ve noted in this space before, second acts by big beverage winners rarely are as successful as the first, even with the benefit of all that added experience from the first go-round. So, then, does experience really help? Could it be that the benefit of knowing the minutiae of how to build a brand is offset by hard-wired patterns of conventional thinking that don’t similarly encumber newcomers to the category? I wish I had an answer to that.
Is it really so vital to get your new brand into the market well ahead of the summer selling season?
The rule of thumb used to be that, if your new product doesn’t get onto store shelves ahead of the peak summer selling season, you’ve basically wasted a year. But I’ve begun to wonder whether that’s really true. If the new mantra for innovative brands is to build them slowly and organically, working out the kinks off-Broadway, so to speak, then is it really so tragic if you don’t launch with a bang, with half a dozen facings in all the key retail chains? Or are you better off launching a bit more modestly, finding nooks wherever you can, making your mistakes on a small scale and, perhaps, building consumer buzz that may get bigger retailers more interested down the line? Is it possible that the off-season doldrums may be a better time to get a look from distributors and retailers than amid the din of peak-season promotions from bigger brands?
Is a dose of cynicism necessary for success on a grand scale?
In my newsletter, I often point to a syndrome I’ve perceived in which there’s money to be made off consumers who’re looking for psychological cover – and it can be flimsy cover at that – for urges they know they really shouldn’t be indulging. So if you want to slake their craving for sweet drinks, throw in some trace amounts of vitamins or antioxidants and give it a name like Vitaminwater – bingo! They’re happy, you’re happy. Starbucks, as I’ve sometimes noted, has built a substantial business around having the grown-up connotations of coffee disguise that what it’s really purveying, with its Frappuccinos, is milk shakes for adults. Meanwhile, beverages with greater integrity – whether in the form of true efficacy or flavor with no sweeteners – can go begging for shelf space and consumers. Call it cynicism or call it concessions to broader tastes, but is this still really necessary to succeed?
Are beverages a high- or low-involvement category?
Over the years I’ve heard various theories as to how emotionally invested consumers are in the beverages they consume. Beer or spirits, yes – those are status badges flaunted in social occasions. But non-alcoholic beverages, in the view of some marketing experts, are a “low-involvement” category – in other words, one in which consumers make their purchasing decisions with a minimum of muss and fuss because they really don’t have much emotionally invested in the outcome. By that logic, it’s silly to aspire to offer much more than refreshing taste, a pretty package and a fair price. But I wonder sometimes – recalling, say, Snapple during its heyday, when consumers deluged its front woman Wendy with calls and letters – whether that’s ever entirely been the case. And these days, when I see the sophisticated way that brands like Guayaki or Sambazon weave together their brands’ health benefits, social causes and environmental initiatives, it’s hard to see why consumers couldn’t be brought to see these purchases as a statement of their own values and personality. So, high-involvement or low-involvement?
I could come up with a dozen more questions like these, but that would only cement the notion that the one issue in beverages with which I’m truly conversant is all the things I don’t know. Or maybe it would just confirm what we likely all already know: beverage innovation is a spooky, unpredictable affair with no infallible rules.
Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.