Magazine article Marketing

New Age Dawns for Soft Drinkers

Magazine article Marketing

New Age Dawns for Soft Drinkers

Article excerpt

It's the real thing -- a redefined adult soft drinks market. Paul Meller finds out why drinks giants are racing to unveil a New Age of drinks

A decade ago smart thinkers across the drinks industry saw a burgeoning mass market opportunity. Alcohol consumption was in decline and there was nothing cold, wet and adult in character for people to switch to.

So in the mid-80s brewers launched low- and no-alcohol beers. Perrier led a mineral water revolution. Coke and Pepsi launched diet versions of their global brands in 1982.

And in 1986 Grand Metropolitan hit on the idea of setting up a division that specialised in selling soft drinks for adults.

That division, Callitheke, is now up for sale, as reported in Marketing last week. Sales of its leading brand, Aqua Libra, have reportedly fallen, coincidentally as the brand began mass market advertising. Low- and no-alcohol beers have long since vanished, almost without trace. Their demise is well catalogued.

Yet mineral water and low sugar carbonates are booming. The idea that the drinks marketers had hit on was sound. It was the marketing behind the failures that went awry.

Earlier this month, Coke's marketing chief Sergio Zyman went some way towards offering an explanation for these differing fortunes.

"This is no longer a marketplace of categories," he told a hushed gathering in a New York conference centre.

"For a long time this business operated as categories or product segments that floated as separate molecular particles of various sizes," he said.

"But there has been a kind of cold fusion, the particles have fused together into a continuum that goes from tap water on the one end of it to alcoholic beverages on the other end."

The mistake the brewers and GrandMet made was to apply niche marketing techniques to what is becoming a mass market.

Callitheke's portfolio of exotic alternatives to beer and wine are priced far above other alcohol substitutes. According to analysts they need to charge the premium because unit costs on the products are so high.

"Aqua Libra's launch idea was sound at the time," agrees Britvic sales and marketing director Michael Utteridge. "But like the other Callitheke brands it never had enough critical mass to really take off."

It's not often that a market is totally redefined. But that is exactly what Coke's Zyman believes is happening. …

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