In the early days of the New Age beverage category, it was always interesting to see what entrepreneurs would try to sell me. As owner of Atlas Distributing in New England, getting into my network was one of the quickest ways to getting on shelves, notices and hopefully purchased by the beverage giants. Needless to say, I saw it all.
Now, as a successful investor in brands such as vitaminwater, Vita Coco and numerous others, I am still privy to all of the latest entrants into the always exciting and interesting beverage category.
My measuring stick is simple. If a beverage falls into any of the four categories below, I’m likely to say no. Or if others have invested, I’m rarely surprised when entrants like the following fail to gain mass appeal:
1. Having an edgy name for the sake of being edgy. Sure, there are lots of fun brand names, but once you stoop to calling your drink Cocaine, you’ve gone too far. Yes, this product explained its benefit (it’s a stimulant), but it’s much too risky for distributors and retailers. Fukola Cola (compliments of the Skeleteens) also falls into this category, along with Love Potion #69. Snapple’sVenom entry failed for similar reasons. Do you really want to drink poison? The cooling effect the drink imparted only exacerbated the feeling that this drink wasn’t something you’d want to consume in large quantities.
2. Including ingredients that are ahead of their time. In beverages, there actually is such a thing as too good of an idea. Before cap-activated beverages (Activate, Karma, On Demand 989) arrived on the scene, a can named Defense had a floating widget aimed at airborne consumers. It used vitamins in the widget and it mixed the vitamins when the consumer opened the can. While it was a cool idea, it had limited appeal. Coke Blak was a dead-on-arrival entry, as the idea of mixing cola and coffee did not connect with consumers. Snapple Elements was a nice product line, but with names like Sub Zero with Siberian Cherry (are there cherries in Siberia?), this product line was ahead of its time. It was packaged in a great-looking glass bottle and moved into an aluminum “cabottle,” or resealable aluminum bottle (again, ahead of its time). Names such as Earth, Rain, Moon and Volcano were creative, as were some of its functional ingredients, but they were too much too soon.
3. Lacking a vision for scale. With any new product, you need to have an end game. Even the best nimble companies make mistakes. For example, what was Red Bull Colasupposed to be or accomplish? Sure, the cola market is the largest in the United States, but consumers did not understand Red Bull’s entry and therefore rejected it. Jolt Cola could have been a breakout brand, I believe. It could have been the American answer to the energy drink category before Red Bull, but a sustainable growth plan never seemed to be in place once interest was established. It’s a shame.
4. Having poor marketing. Of course, there is a matter of having the right product at the right time and failing to market it properly. Plenty of examples exist, but three stand out most clearly. First,ok soda from Coca-Cola identified Gen-X consumers’ desire to have something different, but the drink lacked the customization of today’s Coca-Cola Freestyle machine. Instead, this fruit-flavored beverage ended up turning people off with its offbeat marketing. Second, Godiva Belgian Blends is an example of Coca-Cola (unbelievably) not understanding its partnership with Nestlé/Nestea. The Coca-Cola Company was fully prepared to launch Godiva Iced Coffees, when its partner, Nestlé, discovered the product and promptly told the Coca-Cola Company it couldn’t label it as “coffee” on the front. Third, Gatorade AM was PepsiCo’s attempt to introduce a new day part as to when Gatorade is consumed. Today Mountain Dew Kickstart is working initially (well enough so that PepsiCo is adding SKUs). All told, this was a missed opportunity to grab share in the energy-drink category.
These types of attempts, failures and lessons learned are exactly what makes the beverage category so creative and vital. Most of the people behind these products have as many successes to match their failures, but you can be sure they didn’t make the same mistake twice.
Kenneth Sadowsky is a Senior Beverages Advisor for Verlinvest.
Kenneth was recently named a Top 25 Most Influential Kingmaker in Consumer and Retailer Companies by Forbes.