UPTURN FOR CARBONATES

That may be putting it too strongly, but I believe carbonated soft drinks will do better in the downturn than most people think. Why?

1. They are an affordable pleasure, light relief in an uncertain world.
2. Anecdotal evidence suggests that, in difficult times, consumers turn to trusted brands from happier times and colas rank highly amongst those.
3. Brands are having to price promote heavily, while retailer labels are very inexpensive, all driving extra volume through better value.
4. There are still many emerging markets for carbonates, such as China and India. Their economies are slowing as well as the West, but many markets have a very long way to catch up.
5. And then there is stevia, the subject of my next blog.

BRAND LOYALTY – AMERICAN WAR OF DEPENDENCE

It’s time to plug my blog back into the mains. I’ve been storing up topics, but failing to find time for real analysis. I’ve just seen some astonishing figures about how dependent major brands are on tiny numbers of loyal consumers. For this, I’m indebted to the US Beverage Digest newsletter and a huge study of 1,634 brands by Catalina Marketing. Not a single US soft drink brand reaches the textbook benchmark at 80% of volume being purchased by 20% of shoppers. Only Coke Classic and Sprite achieve over 10%. Pepsi scores 8.5% and Diet Pepsi 4.6%. Snapple comes in at 1.6%. If 1.6% of Snapple shoppers account for 80% of its total sales, they are buying 250 times more per person than the other 98.4%. Think what this means for brand marketers and developers. Satisfying existing core consumers becomes an even higher priority. Hence greater pressure to find out exactly who they are and to connect with them directly. Developing new niche products becomes that much more challenging. Perhaps we’ve known this all along, but these figures certainly focus the mind. In the midst of the current financial wars, US soft drink brands also have to contend with the American War of Dependence.