As new year opens, industry executives/bottlers begin to focus on upcoming new products and innovation. Most see busy year from Coke. Pepsi expected to roll out new products, too, but possibly at slower clip, as it was very active in 2001 with Mt. Dew Code Red, Sierra Mist, Dole, etc. Innovation also expected from Snapple.
Coca-Cola I. Speculation builds re line extensions for Coke Classic and Sprite. One Coke bottler says, vanilla Coke "was talked about late last year (and) Coke plans to introduce it in the 3rd quarter in the contour bottle." Other bottler: "We'll see it in August. I've seen a version of the label (graphics). It's got a brown look." Sprite line extension also likely, say system executives. One bottler says, "it will be clear, like Sprite." Other bottler predicts Sprite line extension "later in the year." System executive notes likelihood of Sprite line extension, but downplays word of "Red Sprite." Name? Could name of Sprite extension be "Sprite Remix?" One system executive suggests, yes. Whether or not related, Coke recently files for trademarks on "Sprite Remix" and "Remix." Timing. CCE president John Alm notes during Jan. 23 conference call that most new-brand activity from Coke comes in second half of year.
Coca-Cola II. Minute Maid. Coke's launch of cold-fill Minute Maid lemonade lauded by bottlers. CCE CEO Lowry Kline recently notes product "surpassed all expectations" with 30 mil cases last year. Given that result, bottlers/executives predict more cold-fill products under Minute Maid trademark. Coke bottler: "Pink lemonade will (debut) soon." Bottler: "(Minute Maid) Lemonade does well, I hope to see a diet (version)." Juice content? 3rd bottler: "There's a plan to add some juice content to Minute Maid (CSD). That would help distinguish it from Fanta." Other Coke system executive also says Minute Maid CSD will get some juice content. Fruitopia. Bottler: "You'll see some changes for Fruitopia: new flavors, new graphics, probably by summer." Fruitopia volume down -34.9% in take-home channels for nine months 2001. Source suggests Fruitopia will be pitched more toward young/urban consumers.
Water. Both Coke and Pepsi eye flavored/enhanced water (BD 12/7/01). Coke bottler says "Dasani NutriWater" (BD 12/7/01) could test soon in parts of Ohio/New York. Pepsi system executive says Pepsi will likely introduce "Aquafina Essentials" enhanced water.
Pepsi. Bottlers/executives say "Mr. Green" from SoBe (BD 11/2/01) on the way. Executive of Pepsi competitor: "Pepsi will be introducing Mr. Green in April." Executives predict Mr. Green will be CSD with taste profile similar to Dr Pepper, "but different," says one executive. Pepsi will also introduce Lipton cold-fill lemonade in April and will launch what executive calls "much-improved" Lipton Brisk tea early in year. Dole will add smoothie line: "Smoothers." Also possibly on Pepsi drawing board: re-introduction of Josta guarana CSD with new formulation. Pepsi recently applies for trademark on "Mountain Dew Blue Shock." However, contrary to speculation that Code Red is about to get blue stable-mate, sources -- and trademark filing -- indicate product will be frozen beverage. PBG CEO John Cahill recently says there will be "further cola innovation" this year from Pepsi. Gatorade. PepsiCo's Gatorade unit plans to launch "Ice" sub-line in spring; clear product will be in three flavors. Asked to distinguish Ice from regular Gatorade, Fierce and Frost, executive says in order of flavor strength, Fierce is "strongest, then comes regular Gatorade, then Ice and then Frost."
Cadbury. Bottlers do not expect major innovation for Cadbury's CSD products, though one executive says, "there are some things under consideration." One source says Cadbury will introduce caffeine-free Sun-drop. Cadbury will focus major CSD effort in 2002 on returning Dr Pepper to growth. 3rd-tier bottler: "Most of Cadbury's (innovation) work this year will be with Snapple." Innovation surge expected. Of note, late last year, Snapple applied for trademark on "Elements Water"; introduction planned. Line will be "near water" says informed executive, with vitamins, electrolytes and flavors. Also Snapple will begin use of new 64-oz bottle plus multi-can pack similar to Coke's "fridge-pack." Mistic will launch line of dairy-juice drinks.
Line extensions; trademarks not brands. When asked about future new products, multiple bottler/executives mention line extensions. Both Coke and Pepsi have begun talking less about "brands" and more about "trademarks." In recent bottler letter, for example, Pepsi North America president Gary Rodkin refers to "Pepsi trademark" and cites Diet Pepsi, Wild Cherry Pepsi and Pepsi Twist among products "sharing the Pepsi banner." Bottlers say Coke, too, will start talking about trademarks. Coke bottler says Cherry Coke will be put back into contour bottle this year -- it has been in bolt bottle -- and more tightly integrated with "Coke trademark." In future, Pepsi and Coke will likely attempt to grow "trademarks" with array of line extensions such as Mt. Dew Code Red, Pepsi Twist, Diet Coke With Lemon, etc. System executives cite continuing need to keep providing news and new products under "trademarks." Auto analogy. One industry executive suggests possible coming parallel to auto industry. Says, "several decades ago, there were a few, and a very few, individual items for sale under the Chevy and Ford names. But now, look. There are sedans, compacts, sports cars, SUV's, vans, etc." Adds, "don't be surprised to see our industry go the same way, at least to a degree."
Plus. Vancouver, Canada-based Leading Brands licenses "PEZ" trademark from Pez Candy of Orange, Connecticut to produce/distribute PEZ juice drinks in U.S./Canada. Leading Brands says line of drinks will be "targeted at 8 to 14 year olds." Company says product will utilize "unique package."
Private label? Some industry executives speculate Coke and/or Pepsi might dip toe in private label business in next few years. One cola bottler told BD: "You usually identify us as Coke or Pepsi bottler. For this one, I'll only talk to you if you identify me as 'cola company bottler.'" So, asked about PL, cola company bottler says: "It could never have happened several years ago. There have been discussions, it's a new world." Industry executive: "If (cola company) decided to go after some (PL) business, the bottlers could co-pack it and ship to the warehouses." Second bottler: "It won't happen. Coke and Pepsi have bigger fish to fry." Third bottler: "If there's unused (CSD) production capacity, it might make sense if the economics make sense."
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