Coke Unveils Innovation Slate Including Costa Coffee RTDs
The Coca-Cola Company showcased a slate of new product innovations at this year’s annual National Association of Convenience Stores (NACS) Show, including the long-awaited expansion of the Costa Coffee brand into the U.S. four years after Coke announced its acquisition of the U.K.-based coffee company.
In addition to a new digitally-enhanced in-store coffee stations – including the Costa WMF 1500 S+ countertop machine and the standalone Costa Smart Cafe (think Coke’s Freestyle dispenser but for fresh brewed cold and hot coffee) – the brand is introducing its first U.S. RTD line with Costa Flat White. The new drinks feature iced espresso with a “thin, ‘flat’ layer of steamed milk” packaged in 11 oz. slim cans. The line is available in Signature Blend, Mocha and Caramel flavors and aims to provide a “coffee-forward flavor profile.”
Speaking at the booth, Joe Gaines, director of sales for Costa Coffee, said Coke quietly began to introduce the brand in the American market in 2020, but the pandemic held back expansion in mainstream channels and it instead focused on launching in healthcare, travel and college and university accounts. But now the company is preparing to “pretty quickly” launch Costa in convenience and conventional accounts nationwide, with c-stores expected to roll out in Q2 and club stores also being explored as an opportunity.
Beyond Costa, Coke’s coffee ambitions also extend to its Dunkin’ branded RTD offerings with the new Dunkin’ Bakery Series, featuring indulgent iced coffees like Brownie Batter Donut, Cake Batter Donut and Coffee Cake Muffin— a shift from the bottles used for the brand previously. The line will contain 200 calories per 11 oz. can.
According to Austin, both coffee launches are part of an expanded focus on the breakfast daypart, which he said accounts for 30% of convenience channel visits.
For its CSD business, Coke is keeping its focus on flavor innovation and will building around its core brands with new offerings like Sprite Strawberry Lymonade and a reformulation of Fanta’s flagship orange soda. The company is also relaunching its seasonal “black” Fanta Halloween SKU with a Zero Sugar variety.
Austin noted that LTOs, particularly the Coke Creations series that has included mystery flavors like the “space-flavored” Starlight and “dream-flavored” Dreamworld, as well as a Watermelon Strawberry flavored collaboration with the artist Marshmello, will continue to play an important role in the company’s innovation strategy. The “drop culture” approach to the launches has helped the company to engage Gen Z, he said, with 30% of new growth coming from new consumers, while 34% of existing CSD consumers increased their purchase rates of the Creations products.
Unique flavors are also driving innovation on other Coke brands as well. Vitaminwater will launch two new zero sugar varieties next year: Forever You (coconut lime) and With Love (raspberry dark chocolate).
Finally, sports drink line Powerade, now under the strategic control of BodyArmor, is receiving a refresh, including new formulations, new visual identity and a 2023 campaign featuring athlete partners aimed at boosting the brand’s position as an electrolyte-rich functional beverage.
Black Rifle Expands RTD Business with Reloaded Flavor Roster
Two years after launching its first canned iced coffee line, Black Rifle Coffee Company is looking to drive retail activity with an expanded innovation slate featuring seasonal flavors, new pack sizes and coffee shots.
The company showcased two upcoming LTO flavors including Berry, White and Blue (summer) and Pumpkin Spice (fall) in 15 oz. cans, both of which are expected to launch next year, as well as permanent 11 oz. Salted Caramel, 15 oz. Vanilla Bomb and 6.5 oz. Double Tap Espresso flavors. The full sized offerings will be rounded out with a new line of 2 oz. shots – with formulations currently being finalized – featuring Just Black, Sweet Black and Mocha flavors. Notably, the shots lean into the brand’s trigger happy identity with proprietary bottles designed to look like bullet casings.
Black Rifle shared its booth at the show with CPG strategic management firm Strategy & Execution Inc. (SEI), which has worked with the company to launch and scale its RTD business. According to Pete Popovich, president of sales at SEI, Black Rifle’s canned line is now in about 125,000 doors nationwide – including CVS, Walgreens and Walmart among other chains – with 94% of the country covered by DSD distribution.
SEI also showcased several other brands it has recently partnered with, including Hawaiian water and canned coffee maker Waiakea and zero calorie Mexico-based electrolyte formula beverage SueroX, which is currently launching in the U.S.
Candy Flavored Beverages Keep Coming
In the wake of branded beverage partnerships like C4’s Starburst and Skittles flavors and Ghost Energy’s slate of Swedish Fish and Sour Patch Kids offerings, among others, candy-flavored drinks remained a hot trend at NACS 2022.
Fire Brands, a new company based out of North Carolina, debuted Warheads Sour Soda, a licensed CSD line featuring Lemon, Blue Raspberry, Green Apple, Watermelon and Black Cherry flavors. Founder Mark Ellis said the line launched in June, primarily in the midwest, and retails for $1.49-$1.69 per 12 oz. can. Retail partners including Quik Trip and Hy-Vee and the brand is distributed through a number of Molson Coors and Anheuser-Busch InBev DSD houses.
“Every flavor in the world is already out there,” Ellis said, suggesting that collaborating with a well-known IP helps bring in a built-in consumer base. As well, he said the format also allows the company to sell the sodas as a novelty product in specialty accounts like Spirit Halloween and Spencer’s Gifts, while also doubling as a conventional channel product that can serve as both a kid’s drink and a mixer for adults.
The line wasn’t the only Warheads flavored drink at NACS either. Anheuser-Busch-backed Ghost Energy, which previously launched an RTD Warheads Sour Watermelon flavor, debuted a new Warheads Sour Green Apple flavor.
Outside of co-branded options, classic candy flavors are also helping craft soda brands bring in Gen Z consumers. Canada-based The Pop Shoppe, a legacy soda maker originally founded in 1969 and revived in 2014 after decades off the market, is making its U.S. debut with a slate of CSDs including flavors like Cotton Candy, Bubblegum and Rocket Blast (flavored like a frozen bomb pop). Business development manager Creg Metcalfe said the candy flavors have been in Canada for several years and have been key trial drivers for the company, as the unique offerings attract teens and younger shoppers, as well as older consumers looking for nostalgic flavors.