Cadbury executives meet with 7UP bottlers Aug. 17 in Dallas, Texas and formally unveil new enhanced version of 7UP called "7UP Plus" (BD 5/28/04). Also debut new ad campaign for 7UP designed to differentiate it and show consumers -- according to new CMO Randy Gier -- "all things in green bottles are not the same." Cadbury plans stepped-up media support behind trademark 7UP.
Meeting; views. 7UP has been losing volume for multiple reasons, and this meeting was important one for Cadbury Americas Beverages CEO Gil Cassagne who took helm in 2003, as it was first one bearing his full imprimatur. Bottlers enthusiastic: 1) "Best 7UP meeting I've been to in years." 2) "Gil gets credit for a lot of changes." 3) "Great meeting." 4) "Gier will make a difference." 5) "I don't know if (7UP) Plus will work or not, but this is real innovation and these guys deserve credit." 6) "The (media) work is sophisticated and thought-out." 7) "Gil had everyone on message."
New products. Cadbury unveils significant amount of innovation at meeting. In addition to 7UP Plus (photo left), Cadbury will introduce several new products and packages. Hawaiian Punch: 1) new Hawaiian Punch Light with 80% less sugar. 2) all Hawaiian Punch flavors, except Fruit Juicy Red, will be reformulated with 25% less sugar. 3) Pepsi Bottling Group's northeast unit will sell Hawaiian Punch in 8-oz cans. Sunkist: Cadbury later this year will test new products for Sunkist in "energy, health and orange" areas with launch planned for 2005. Packages. Company will debut new "Vintage" 20-oz bottle for A&W (photo right). Also modified 20-oz "splash bottle" for 7UP and flavor brands with portion above label resembling basketball.
Differentiating 7UP; 'lost the edge.' Cadbury executives stress need to differentiate 7UP from Sprite and Sierra Mist and frequently use term "change the game." Cassagne delivers speech -- called "stirring" by one bottler -- noting 7UP was "first uncola" and offered first diet lemon-lime. But adds, "somewhere along the way, we lost the edge. We stopped being unique, different, disruptive." Acknowledges: "In the eyes of the consumer, we became average, and in the consumer world, average is a fate worse than death." Core message. In message echoed by other executives throughout day, Cassagne notes, "consumer believe all lemon-limes are the same. The lack of brand differentiation is why we have to change the game."
Marketing and advertising. Cassagne says, due to money saved from integrating Dr Pepper/Seven Up, Snapple and Motts, "we're significantly increasing our support" for trademark 7UP both later this year and in 2005. Declares, "this means more media spending, sampling, coupon-ing and promotions." Dollars up +20%. Adds, "this is the first year out of the last four that we haven't cut marketing budgets." Says in 2005, total company marketing spend will be up +20%. Senior vp CSD marketing Jim Trebilcock says overall 7UP trademark will get "40% more dollars." New ads, tagline. CMO Gier explains new 7UP tagline -- "the only way to go is Up" -- is designed to stop consumers from "believing that 7UP, Sprite and Sierra Mist are interchangeable." 'Less syrupy.' Gier explains consumers see 7UP as "less syrupy and not as sweet as our imitators." Ads will try to "break the belief that all things in green bottles are the same." Tagline will be used on all trademark 7UP products, but with different "step-up" lines. So, for example, 7UP ads will say: "For less sweet, syrupy taste, the only way to go is Up." 7UP Plus ads will say: "When you add it all up, the only way to go is Up." [editor's note: PepsiCo's Sierra Mist web site states: "How is Sierra Mist different from other Lemon-Lime soft drinks? Sierra Mist is designed to taste lighter and more refreshing ... less sticky sweet or bitter."]
7UP Plus details/thinking. Cassagne tells bottlers -- in implicit slap at Coke's and Pepsi's mid-cal colas -- consumers "don't want only slight reduction" in calories/carbs. Adds they want sharply reduced sugar plus "tangible small wins" re health/wellness. Gier says product shows high purchase intent; post sampling product purchase intent is 76% for 7UP Plus vs 68% CSD norm. Products contains 10% RDA calcium/vitamin C and 10 calories per 12-oz can. Gier shows first ad for Plus, which is designed to provide clear explanation of what product is. Second tier of ads will use "stars" and add "a little glitz." Primary consumer target is adult women. Ads/marketing. Trebilcock says investment in Plus will be "huge." After Aug. 28 launch, company will sample Plus in 10,000 stores in September with goal of reaching 16 mil consumers. 80 mil coupons by Christmas. Ad blitz -- "network roadblock" -- set for Oct. 4.
Straight talk; 'difficult to deal with'; warehouse? Cadbury veteran Mike McGrath -- now president sales -- hits bottlers with some sobering straight talk. Says excitement about 7UP high, "but our customers have concerns about our execution." Warns, "some grocers call us difficult to deal with," in part because of split system. Wal-Mart; warehouse? And in extremely pointed comment, he notes: "At Wal-Mart, we have significant distribution voids. They say, 'if you can't service our stores DSD, sell it to us direct, and we'll service our stores.'" Ahead. McGrath says launch of 7UP Plus needs to "score a knockout." Concludes: "We need 90% distribution in every channel by the end of September."
Results. As in past years, Cadbury executives urge bottlers to increase distribution/display and cite lags vs Sprite. Also declare 7UP brand needs "more consistent daily service" by bottlers. McGrath tells bottlers total 7UP volume YTD down -8.5%. Volume in "base market" bottler territories down -7%. Volume down -12% in territories where bottlers received 7UP last year from Pepsi bottlers which switched to Sierra Mist. McGrath notes none of the Pepsi bottlers which dropped 7UP are doing "nearly the volume" with Sierra Mist as they did with 7UP. But, "conversely, few bottlers that received 7UP are exceeding the volume done by Pepsi bottlers" that had had it. McGrath: "I'm disappointed in the transfer markets."
Interview with Cassagne. BD asks Cassagne: Why do you think 7UP Plus will succeed better than other line extensions? Cassagne: "We don't view 7UP Plus as a line extension. It's a totally new category which we think will meet a current consumer need. Based on what the consumer is telling us, 7UP Plus will fulfill a need in their beverage portfolio today ... We're very excited about the potential of 7UP Plus. This is a product which was developed by consumers ... So, based on that, we're very excited about the prospects of this new category."
From where will 7UP Plus source volume? "7UP Plus will source from a broad spectrum across people's beverage needs. It will run the gamut from water to CSDs." Will it cannibalize Diet 7UP? "We think the vast majority of the volume is going to be incremental, because consumers view this as a totally new, exciting category and offering to CSDs ... We don't see any significant amount of cannibalization from other 7UP (trademark) products."
New 7UP advertising/marketing: consumer focus positioning? "The target demographic of the brand has been refined and redirected. We're going to focus on what the real differential of brand 7UP is vs all of the imitators in green bottles. We think we have a compelling consumer story." Target demographic? "It skews older than the 'Make 7UP Yours' campaign. That campaign did meet our objectives of bringing awareness and relevance to a younger audience. Now with that job done, we believe it's time to move on to a slightly older audience."
Thoughts on U.S. brand divestitures? "We won't be done with work on making those decisions until the end of the year."
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