Gerry’s Insights: Gut Check

This fast-growing gut pop category continues to amaze and confound me at the same time. By now, it seems to be more than just a short-term novelty, meaning one can start to wonder whether it represents a more permanent branch of the CSD category in the same way that energy drinks – which after all are pretty much CSDs with elevated caffeine levels – have proved their durability over three decades now.

One of the more fascinating questions now is how Big Soda reacts to a category that, under the Walmart-coined rubric “modern soda,” in some ways represents a repudiation of those companies’ core brands as old-fashioned. The latest evidence is that those companies in fact are embracing the category and exploring whether it’s actually a fit with those same core brands, maybe as a way of restoring their image of functionality from a century ago and conferring a more contemporary aura across these key brands.

Coca-Cola was first into the fray with its Simply Pop that riffs not off one of its CSD brands but rather a core juice brand. PepsiCo reportedly was ready to launch a gut pop under the Soul Boost brand abandoned from a different category but received an indifferent trade response and acquired Poppi instead; after closing on that deal, it took the bolder step of launching Pepsi Prebiotic Soda with the imprimatur of its core trademark. As I’m writing this, a report has emerged that KO was about to launch

fiber-enhanced entries under its Coke Zero, Sprite Zero and Fresca monikers too. Coke itself wouldn’t confirm the report to my newsletter, Beverage Business Insights, but it didn’t deny it either, so I’m assuming there’s at least a whiff of substance to the report, from an Instagram observer who goes by Snackolator.

Packaging images posted by Snackolator indicate that the CSD-branded gut pops are clad, like Simply Pop, in 12-oz. sleek cans and prominently herald their 6 g of prebiotic fiber content on their front panels. “Taste you love,” the cans assure, perhaps to separate them from the still-polarizing stevia sweetener that Poppi and Olipop employ. No definitive word on timing, pricing, sweetener and other key details as I write this, though they may be out by the time you read this.

This is all fascinating on several grounds. First there’s the branding. Recall that gut pops originally were a close-in extension from kombuchas and drinking vinegars; Poppi itself started out as a drinking vinegar branded as Mother (as in the SCOBY used to ferment kombucha) before rebranding as a soda under the Poppi name. The established kombucha players have learned that their brand names confer no advantages in the gut pop segment: Health-Ade pivoted from Health-Ade Pop to Sun Sip and Brew Dr went out with a new brand called Sipjoy. That suggests that gut pops comprise their own category with distinctive
dynamics from those of booch. That in turn poses the question of whether soda brands like Pepsi-Cola, Coke Zero and Fresca that are associated with indulgence, but definitely not with health, will do better at resonating in this segment than the booch brands did. (The paranoid theory, of course, is that these entries’ function is as much to blur the distinctiveness of gut pops with conventional CSDs and thereby undermine a category that poses a potential threat to CSDs. After all, some of their marketing has directly attacked CSDs.)

That’s the branding conundrum. Then there’s the M&A aspect, at a time when Poppi’s rich exit has had some rivals salivating at the prospect of striking their own lucrative deals. Among the Big 3 soda marketers, PepsiCo presumably is well set now, between acquired Poppi and internally developed Pepsi Prebiotic. Keurig Dr Pepper has been betting on the Bloom Pop spinoff from its very successful Bloom Energy allied brand, though its propensity for mustering

Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a daily e-newsletter covering the nonalcoholic beverage sector.