Brand value increases across categories

Part 3 | The Categories
Marketing to win share
Facing these growth challenges in both
the developed and developing world,
brand leaders Coca-Cola and Pepsi
remained locked in a market share battle,
with Coca-Cola positioned as the timeless
iconic brand and Pepsi as the brand
focused on the immediate excitement.
Coca-Cola continued its “Open Happiness”
campaign, using viral social media
to communicate the international exploits
of a Coca-Cola truck that delivered Coca-Cola,
food and good feelings. Pepsi
launched its first global campaign called
“Live for Now,” connecting the brand with
pop culture worldwide, an iteration on the
successful “Pepsi Generation” positioning
of the 1960s.
Insight
Consumers seek
health and mood
benefits from drinks
Health in all its manifestations is a
massive trend. When we reach for a
soft drink, we’re sometimes simply
looking for a convenient form of
refreshment or hydration and we’re
not focused on the healthiness of
what we are drinking. But, in an
increasing number of occasions,
consumers want the beverage to be
a vehicle for other benefits beyond
basic hydration and refreshment,
many of which are health or
mood related.
Lloyd Burdett
Head of Global Clients and Strategy
The Futures Company
lloyd.burdett@thefuturescompany.com
76 BrandZ Top 100 Most Valuable Global Brands 2013
Pepsi was the official drink of Major
League Baseball in 2012. In a dramatic
expression of its ability to leverage its
Power of One philosophy, Pepsi signed
these brands—Pepsi, quaker, Tropicana,
Gatorade and Frito-Lay—to a 10-year
sponsorship deal with the National
Football League (NFL).
Not surprisingly, the most daring
marketing effort last year came from
Red Bull with its sponsorship of Felix
Baumgartner, who gained the world’s
attention with a 24-mile free-fall to earth
from the edge of space. Red Bull moved
ahead of Pepsi as the third most valuable
brand in the category.
Linking drink and food
Coca-Cola paired the brand with food,
including snacks. In supermarkets, it
displayed beverages near pizza, for
example, merchandising Coca-Cola
brands as part of a meal solution.
Coca-Cola also opened its Shopper
Innovation Experience Center during
2012, a laboratory for testing crosscategory
sales drivers. Pepsi developed
liquid meal replacements, combining
its Pepsi expertise with the corporation’s
quaker brand.
The high proportion of drinking occasions
associated with breakfast helped drive
consumption of tea and juices, including
brands like Tropicana, Minute Maid and
the Nestlé offerings linked by the brandlike
prefix Nes—Nescafé, Nespresso
and Nestea. The focus on coffee
quality, innovative coffee machines and
personalized customer service offerings
enabled Nespresso to consolidate its
foothold in Western Europe and expand its
success to almost 60 countries worldwide.
Although breakfast is not a time usually
associated with carbonated drinks,
Mountain Dew, a Pepsi energy drink brand,
recently launched Mountain Dew Kickstart,
a caffeinated—and carbonated—breakfast
drink aimed primarily at Millennials.
The attempt to link drink and food relates
to larger trends, such as the increase in
at-home entertainment, which influences
when and where consumers drink and
eat. The trend affected beer brewers as
well, as all beverage producers depend on
driving liquid volume.
Meeting health and
energy concerns
Soft drink brands responded to the
growing consumer focus on health with
new juices, smoothies and enhanced
waters, including coconut water, which
enjoyed wide distribution in the UK and
parts of the US.
The leading brands marketed cola
products intended to improve healthiness
without compromising taste. Pepsi Max
and Coca-Cola Zero are both aimed at
male drinkers who want good taste, fewer
calories but not the diet label. Dr Pepper
Snapple Group launched Dr Pepper
Ten in the last quarter of 2011, with the
slogan “It’s not for women.”
With the launch last year of Pepsi Next,
the brand attempted to find a mid-calorie
position that reduced calories, while
maintaining taste. In most markets, Pepsi
Next was promoted as containing 60
percent less sugar. Coca-Cola replaced
Sprite, in the UK, with a reformulated
version using a natural sweetener.
Introduced early in 2013, the new Sprite
addresses obesity concerns by reducing
the calorie count of the lemon-lime drink
by 30 percent.
Coca-Cola, owner of Minute Maid,
is developing an orange juice not
from concentrate, and investing in the
technology to create consistent taste despite
the variations that occur naturally. Pepsi
addressed the healthiness issue with its
1998 acquisition of the Tropicana brand of
orange juice not made from concentrate.
The interest in additional energy benefits
drove the performance of Red Bull.
Gatorade marketed Gatorade G Series
Pro Carb Energy Chews, gum-like squares
intended for chewing prior to and during
athletic exercise. But desire for functional
drinks also included products to reduce
energy and encourage relaxation, socalled
dream water to manage stress.
Insights
BrandZ BigData
Strong character
buoys brands
The recession has been a cathartic
experience for many brands, forcing a
rethink in terms of their relevance. Soft
drinks faced a simultaneous challenge—
the increasing consumer concern with
health. It is noticeable that this category
on average is much less “meaningful”
(appealing and meeting needs), but is still
very “salient,” meaning that it’s famous
and stands out in the mind of
the consumer.
The high profile has been maintained
partly by greater definition of brand
character. The overall character “clarity”
score (the depth and distinctiveness
of brand personality) has increased 24
percent since the recession, compared
with an increase of just 8 percent for
all brands. Three notable exponents
of character building are Coca-Cola,
Nespresso and Red Bull.
Source: BrandZ BigData, over 2 million consumer
interviews regarding over 10,000 brands in 30-plus countries
Action Points
1. Be transparent
Being clear and straightforward
is important as Millennials—more
informed about food and health
issues than their parents—move into
household and family formation
life stages.
2. Be proactive
Address consumer health concerns
head-on. If customers are raising
questions about sugar or caffeine,
for example, then take a position.
Communicate about reducing
the levels of those ingredients or
acknowledge them as an acceptable
indulgence in moderation.
3. Be strategic
Discounts and promotions have
conditioned consumers to time
purchases for when a product
is offered at what seems to be
the lowest price. Develop a
merchandising ladder that explains
the value at rising price levels.
Food & Drink | Soft Drinks
Spotlight
Beverage penetration,
consumption vary
widely by country
Liquid milk is the most consumed
non-alcoholic beverage worldwide,
followed by ready-to-drink juice,
bottled water, tea, carbonated soft
drinks and ground coffee.
The penetration of carbonated soft
drinks varies widely, depending on
local tastes and the efficiency of
distribution systems. Carbonated
drinks are highly desired in Mexico,
more than water or juice, while
Indian consumers prefer tea.
Beverage penetration
Liquid Milk
RTD Juice
Bottled water
Tea
CSD
Ground coffee
51%
CSD penetration
Brazil
Mexico
Greece
Spain
US
France
China
Global
UK
India
25%
61%
68%
72%
72%
68%
87%
83%
88%
85%
100%
100%
98%
97%
95%
Source: Kantar Worldpanel 2013 Brand Footprint Report
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