WKD is hoping to build the category with X, but faces a PR risk
Something wicked this way comes. Last week The Grocer revealed WKD’s plans for a new sub-brand called WKD X, which fuses caffeine with a high alcohol content (7% abv).
In many ways, the drink takes inspiration from the big boys of energy. Just like Coca-Cola’s Monster Energy brand and PepsiCo-owned Rockstar, it comes in 500ml cans and contains similar quantities of guarana, taurine and caffeine.
Yet the NPD flies squarely in the face of nearly every booze macro trend. Brewers, cidermakers, winemakers and even spirits businesses are rolling out lower-abv and lighter drinks.
So why is WKD taking this path now? And what does it tell us about the drinks market?
There’s logic in tapping into the wider aesthetic and format of energy drinks, for one. As our Britain’s Biggest Brands report reveals this week, the likes of Monster and Red Bull have made the largest gains in the top 100 brands.
But WKD isn’t really setting out to compete with those titans. Instead, it believes there is a growing market for “enhanced RTDs” – and one that lacks big branded players.
Battling the Dragon
That much is true. The most similar product to WKD X on the market is Dragon Soop. Sold largely in c-stores, it also contains caffeine, taurine and guarana and rings in at 7.5% abv.
Encouragingly for WKD X, Dragon Soop is flying. Despite not being stocked in the mults, sales of its top five SKUs rose by a combined £3.3m last year. Its Peach & Raspberry flavour alone was up 127.6% [NielsenIQ 52 w/e 11 September 2021].
It shows caffeinated booze is “a very indie-driven market – you’re thinking Costcutter, Spar, market towns and impulse sales on a Friday night for younger guys that will have it at a mate’s or on the go,” says HRA Global MD Hamish Renton.
“Dragon Soop is phenomenal at what it does in those channels. It’s a very versatile product but you don’t see a lot of grocery action,” he adds.
This is exactly where WKD head of brand Alison Gray spots an opportunity. She says WKD X “has a role to play everywhere” in retail, beyond c-stores. “The single-can approach lends itself well to wholesale and convenience – and we have a PMP format specifically to maximise that opportunity – but we’re looking for WKD X to be stocked wherever our consumers shop.”
If it can leverage its existing relationships with the mults, WKD could well be on to a winner. Plus, the brand is also eyeing the on-trade. “Speed of serve and the non-glass format allow WKD X to offer something relevant and new to [pub] licensees,” she says.
Renton also believes this bodes well for WKD. “There isn’t a big brand in that sector – they have spotted a nice bit of white space to launch into.”
However, “my only question is whether WKD is a little too conservative and grown-up for who I think the shopper is. The magic of Dragon Soop is so specific to that age group.”
Renton also points out the launch could be risky from a PR angle. Highly alcoholic caffeinated drinks have caused controversy in the past. Take US brand Four Loko. Before hitting the UK last year, it had faced criticism in the States and changed its recipe in 2010. Dragon Soop has similarly come under fire in Scotland for alleged links to antisocial behaviour.
“Because of the age group and the channel, there is an onus on getting the responsibility right and that will be weighing on their shoulders,” says Renton. That has been noted by WKD, which says the product was developed in conjunction with guidance from industry watchdog the Portman Group.
In any case, WKD does need to find ways to grow outside its core range: of its top five SKUs, only its core Blue and recent Dark Fruit flavour added value in 2021. Its Iron Brew, Pink Gin and Mixed flavours all saw declines (of 10.2%, 43.2% and 4.8% respectively) [NielsenIQ].
If WKD’s track record with innovation is anything to go by, it has a strong chance, says one source: “WKD has tried really hard to remain within the boundaries of relevance.” After all, it “survived while Bacardí dumped Breezer”.
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