The soft drink industry sees trouble

The soft drink industry must wake up to a new reality.

You see, there are all kinds of business trends that are transforming industries. We’ve already seen what our smartphones have replaced. Streaming media has made CDs and DVDs obsolete. And, as we’ve written extensively, cold breakfast cereal is in its own mess.

The failure to recognize what’s going on and building your brand to respond to market forces will leave you in the dust. Retailers are flat-out ignorant of enacting true change to adapt to a new reality, which includes dead malls.

The soft drink industry is also experiencing massive change. Bottled water has replaced many of our sugar-infested soda drinking habits, with soda sales dropping 1.5% in 2015. The industry itself is responding with ads saying its players will reduce the amount of sugar and offer smaller sizes.

This is, of course, the equivalent of the tobacco industry saying it will have light cigarettes with less tar in them. The industry itself knows that it has a problem, but is trying to stem the tide of consumers leaving it.

However, the soft drink industry is also responding by diversifying their portfolios. The epitome of irony is that those soft drink companies now own most of the most recognizable bottled water brands.

How the soft drink industry can survive.

If I were to make a prediction, I’d say Coca-Cola has the best chance of surviving for one simple reason. It’s the only one with a meaningful and preferred brand. Pepsi once held a direct position against Coke by being about youth, while Coca-Cola was about nostalgia.

Since those heydays, however, Pepsi has been all over the map and must consider a new direction. Today’s youth are veering away from soft drinks. (A 19-year-old son of a co-worker has never sipped a soda in his life.) Capturing the imagination of Millennials is important, but that means all the players need a different strategy. Not just thumb plugging a hole in the dam.

Even Coke’s recent announcement of a selfie bottle won’t do the trick. It’s a gimmick. Big whoop.

A repositioning is in order for all the players. Otherwise, it demonstrates another industry failing to respond to trends in a meaningful manner.

The promise of the five-second ad from Pepsi

It’s no shock to say that we live in a world in which our attention spans have been reduced to seconds rather than minutes or hours. This has become a particular problem for advertisers when online advertising is so easy to skip after just a few seconds. Who really watches a full ad anymore?

Well, if you can’t beat ‘em, then you might as well join ‘em. Pepsi is doing just that with a new round of ads, primarily online, that are five seconds long and feature their bottles with emojis, thinking that those emojis will get across the right emotion in a very brief time.

As an old ad guy, I would normally bemoan this sort of approach because a five-second ad doesn’t allow for any kind of storytelling. For example, the pace of the wordless Matthew McConaughey spots for Lincoln is so perfect because the ads casually tell a story of luxury and coolness powerfully.

The Pepsi ads will make agencies think harder.

However, going with the shorter ads will make advertising agencies think harder about the message they are trying to send. So much of advertising is simply time and money wasted. There are several reasons for this, not the least of which is that few of them have a point. Even if they do, the point is usually not important.

Also, the idea of advertising – that you are getting the consumer to covet your product or service – gets lost in the mixture of what usually turns out to be a 30-second skit. In most ads, you don’t even know who the campaign is for. The logo appears at the end, but it’s easily ignored because the humor of the previous 29 seconds has obliterated it. The ad simply doesn’t fulfill its purpose.

Pepsi’s five-second spots aren’t anything groundbreaking in that the messaging is mundane. It does feed into Pepsi’s brand of fun, but it’s a little childish and I don’t know if people would actually want a bottle of Pepsi with a smiley face on it. (It’s not that different than Coke putting names on its bottles, which didn’t turn into much preference.)

But the promise of these five-second spots is that they are the future, and advertisers would be wise to really dig deep into what message they want to get across.

Ramadan Coke, a lesson in brand equity

A few weeks ago I went on one of my usual tirades.

It was about Coca Cola and its nonsensical campaign called “Share a Coke.” You should take a read of that post, if you haven’t already, before perusing any more of this post.

Mind you, I still believe that “Share a Coke” is a weak idea. However, Coke’s recent campaign in the Middle East is a case study in knowing your brand equities.

You still know it's Coke.
You still know it’s Coke.

Coca-Cola without the “labels”

For Ramadan in the Middle East, Coca Cola is presenting a campaign that has its sights on recognizing worldwide prejudice.

In honor of Ramadan, Coca Cola has opted to scrap the historic white cursive letters on select shipments. What remains on the red can is the flowing white ribbon and a message reading: “Labels are for cans not for people.”

The Ramadan Coke campaign also includes a television spot that features a group of men, all of mixed nationalities, attempting to guess what each other looks like while in a dark room.

Coke’s brand is still on the cans.

In its campaign for Ramadan, Coke has embraced the power of its brand imagery. Even without the wording, the can still looks like a Coke. That’s because, in the market of soda drinks, Coke owns red, especially with the white accent ribbon.

I’ve witnessed this tactic in several other campaigns by brands with iconic imagery. Aflac, for example, produced a TV spot with a duck waddling around a room trying to quack the word “Aflac,” but never quite doing do.

Arm & Hammer also toyed with this stratagem in several print ads that simply featured a giant, bald head, minus any apparent logo present.

The results can be mixed. The Aflac one doesn’t quite work because Aflac, as a brand, doesn’t mean much emotionally. (It stands for the market of supplemental insurance). And the ad is basically a joke with a wink to the audience.

But the Coke version is arresting and memorable, not to mention, commendable.

Removing the brand name from its cans, even if only for a singular event, is as daring and fearless move by Coke. It is smart act of branding that demonstrates that Coke owns some of the strongest brand equities in the marketplace – and knows it.

Share a Coke has become trite

For most of my life I have enjoyed Coke over Pepsi.

I always found something so refreshing about cracking open a fresh red can and pouring its contents over ice. It had a sweet, indulgent taste that Pepsi just never had, in my opinion.

OK, I'm done with Share a Coke.
OK, I’m done with Share a Coke.

Coke, to me, always had the greater product – the taste was better. Or at least, that’s what I’ve always thought. (More on this later.)

But then something stepped in the way of my favorite carbonated beverage: an increasingly stupid campaign on its can called, “Share a Coke.”

Names on Coke bottles were once clever.

If you’re not familiar with the “Share a Coke” campaign, it began with the folks at Coca-Cola printing personal names on the labels of coke bottles and cans. This drummed up some interest on social media outlets where people would post pictures with themselves and a Coca-Cola bottle that sported their name.

It was a bright concept because, unlike other soda campaigns, it was about the soda drinker, not the drink. Plus, you could order bottles from Coke with specific names on them. Consequently, many analysts deemed “Share a Coke” campaign a success.

Coke is now overdoing “Share a Coke.”

It’s an uncomfortable thing to witness someone trying too hard to be hip. That’s kind of how I feel with Coke’s newest incarnation of “Share a Coke.”

Just yesterday, I was drinking a can of Coke Zero while hanging with my daughter. About halfway through my can, she looked at me and began laughing, then said: “Sup Bro.”

“Sup Bro?” I was confused.

“Bro. It’s written on the can, Dad!”

I took a look at the other cans in the fridge that had other idiocies printed on them: adventurer, sidekick and better half, and immediately rolled my eyes.

How stupid.

I suppose all the bros in the world are going to seek out these cans and take selfies with them for Instagram.

Coke’s brand is in trouble. With the latest update of “Share a Coke,” especially, Coke has displayed that it no longer gets why people like myself drink it: because of what the brand of Coke means.

(Sidenote: Pepsi often wins in blind taste tests. But Coke wins when drinkers are not blind. It’s the Coke brand that makes us think it tastes better.)

I can assure you that it isn’t because of some inane pronoun printed on a can.

Keurig: A case study in brand focus

Get ready. Keurig will be transforming the soda industry the same way it did with coffee.

Keurig, which introduced the K-cup single-server coffee pod years ago, has inked a deal with the Dr. Pepper Snapple Group to do the same for sodas. That’s right, you’ll be able to make your own soda just like you now make your own coffee.

It’s seems impossible to catch on, but that’s what people said about the K-cups, which introduced unparalleled convenience along with a fresh cup. In the case of sodas, Keurig is expected to unveil a cold brewing system later this year, and this agreement sets the stage for another revolution.

A brand with focus.
A brand with focus.

This seems to be response to Keurig’s losing the patent on K-cups back in 2002, along with its coffee machines now being duplicated. Keurig was the supreme example of a brand that was first to market and held that position by defending its brand. But competition has grown stiffer since the patent ran out, meaning Keurig felt vulnerable and was looking for other areas of growth.

To my mind, however, Keurig isn’t in the danger some think it might be. It still dominates the one-cup coffee industry because it has a brand focus, vocalized by its mission statement: “We take a fresh approach to beverage-making, passionately believing all consumers deserve to drink for themselves.

Now, mission statements tend to be bland at most companies, meaning everyone ignores them and they just make execs, HR and internal communications feel good about themselves. They are usually ineffective in giving companies guidance.

But this one is actually a brand promise: “…believe consumers deserve to drink for themselves.” That’s a powerful statement and it gives Keurig the focus it needs to stay on task. It’s positioned against the market (coffee shops), aligns itself with a consumer value currently in the market (consumer is in control) and Keurig has the ability to fulfill that wanted value.

That’s why its movement into the soda market will, I think, be a success. It has brand permission to play in this market in this way, which will make the new systems credible to consumers.

Keurig understands that if you have a singular focus as a brand, it will drive everything you do, including any innovation or initiatives into new markets. Other companies should take heed.