Welch’s, the food company best known for its grape-based products, is breathing new life into its stagnant fruit-flavored soda line.
In a press release last week, the Concord, Mass.-based company announced a partnership with Global Beverage Corporation, an independent company that was created to lead an expansion of the Welch’s soda line with new flavors and formats.
“Working with Global Beverage is an exciting opportunity for our business,” said Welch’s CEO Brad Irwin in a press release. “Global Beverage’s expertise in the industry and distribution excellence combined with our brand make this collaboration good business, and more importantly will bring consumers access to more of their favorite soda.”
Speaking with BevNET, Global Beverage president and CEO Anthony Pessolano, a former vice president and general manager at Pepsi Bottling Group for over 25 years, explained that the opportunity to acquire the rights to Welch’s soda division in North America, which is separate from the company’s sparkling juices line, was presented to him about a year ago. Before signing the deal, the company did extensive consumer research on the brand; at the time, Welch’s grape and strawberry sodas, which at one point were distributed nationally at Walmart, had downsized to, in essence, a regional brand with limited reach along the East Coast and relatively low priority status amongst Welch’s product offerings.
“My perspective was we needed to invest the time and the money to do the consumer research to see what the condition of the brand was,” he said.
From last summer through December 2016, Global Beverage conducted mall intercept testing and found that while the availability of Welch’s sodas had decreased, consumers retained strong identification with the brand name and the offering itself, recording scores that Pessolano called among the highest he’d ever seen.
“You had that consumer who said they remembered growing up on the brand and had fond memories,” he said. “The other piece, and this is a tremendous credit to the Welch’s trademark, was that there was this extraordinary halo effect to the other Welch’s products. It really had this very powerful twofold consumer affinity where we thought there is something to work with here.”
In reviving a legacy beverage brand that consumers associate to some degree with nostalgia, Global Beverage isn’t seeking to change the formulation, at least in the short term. That means using familiar ingredients — high fructose corn syrup, some artificial colors and flavors — that health conscious consumers are increasingly steering away from, but the brand’s research has Pessolano confident that the demand for flavored soft drinks remains strong.
“This is still a gigantic business,” he said of the sugar-sweetened soda category. He noted that test responses from one demographic in particular — males aged 18 to 34 — were very strong, a group he said “is not historically as concerned about their ability to burn off calories when they are in their mid-20s.” Sugar content and calories were not disclosed, but Pessolano said that the relaunched brand would contain some natural flavors and less than 2 percent Concord grape juice.
For now, Global Beverage is looking to target opportunities primarily in the 20 oz. resealable single-serve bottle segment, supplemented by 12 oz. aluminum cans and 2 L bottles. The line’s redesigned bottles will be rolling out to retail and foodservice outlets in five flavors — grape, strawberry, fruit punch, pineapple and orange — in about five weeks and will be supported by a primarily social media-based marketing campaign.
In terms of distribution, Pessolano explained that the company’s was not looking to utilize DSD or even return to the club stores like Walmart and Sam’s Club. “I’m less interested in traditional large format food where it’s two liters and cans because the reality is that the big companies own that space — it’s very, very price competitive and really difficult to make money,” he said. “We want to be able to focus on the channels that get us up-and-down-the-street in the single-serve category.”
While the company’s focus will be on full-flavored sodas for the next 18 to 24 months, Pessolano hinted that Welch’s next soda innovation would go in a different direction.
“We’ve got some really exciting development plans that are part of our strategic plans that will address some the questions [about sugar and artificial flavors,]” he said. “We’ve seen this movie, we know where we have to take this down the road.”