Pepsi Raw is no more. Is this just another premium concept falling foul of the recession or is poor execution also to blame? Rob Brown reports
Nothing short of rejuvenation of the cola market that was the aim when Pepsi Raw was launched into the on-trade in February 2008.
But things went decidedly flat decidedly quickly and, having failed to bridge the gap between the niche and the mainstream, last week Pepsi's UK bottler, Britvic, finally ditched the brand for good.
The omens were never encouraging for the so-called "natural" cola. Britvic claimed the £1.5m it poured into the exclusive on-trade launch of Raw at the start of 2008 had been well spent, creating an edgy brand and a growing following among clubbers. Come October historically the quietest time in the soft drinks calendar but also at the absolute low point in the recession it apparently seemed a good idea to take Raw to the supermarkets. The recession had already claimed Coca-Cola's functional brand extension, Diet Coke Plus, pulled from the shelves that August. So was it doomed from the outset?
Tom Ellis, strategy and research director at brand agency 1HQ, certainly thinks so. "A lovely idea but a flawed concept for the current marketplace," he calls it.
Cola drinkers are not interested in ingredient provenance or health claims, he says, and Raw lacked the power to pull the health-conscious from the juice and water sectors. "If Raw did succeed, it was probably more in creating a cool Pepsi variant that could tap into the on-trade market," adds Ellis.
The suggestion is that Raw should have been further nurtured as a niche, underground brand before being flung into the mainstream. While the hip young things in Britain's bars and clubs had bought into the brand, the idea of a soft drink containing cola nut and apple extracts, coffee leaf and raw cane sugar was a far harder sell in the cut-throat supermarket aisles. With 250ml cans retailing for about 95p a pop, the heavily promoted off-trade was simply too tough a (cola) nut to crack. Grocery channel sales stood at £1.16m at the end of August ironically, an 88% improvement, but clearly an unsustainably low figure, with retailers delisting it in droves, and the rollout also appears to have taken the shine off on-trade sales too.
"The on-trade and the off-trade are completely different animals just because you've had success in the on-trade doesn't mean it will translate across," says Simon Gray, founder and managing director of Boost drinks. "Consumers are more willing to pay a premium price in the on-trade where it is less promotionally driven. But in the off-trade it's completely different people see cola as a good value, run-of-the-mill product."
It also needs exposure and the visibility, Gray adds. And these were two things Raw didn't have in the supermarkets.
Starved of promotional investment in the off-trade, retailers dedicated little shelf space to the brand, often siting the few facings above eye-level, meaning Raw was all too easily overlooked.
Backing the brand's off-trade rollout with clearer branding and an above-the-line marketing campaign to trumpet its natural credentials could have made the difference between success and failure, says Sally Moses, consultant at The Value Engineers.
"If marketed correctly carbonated soft drinks with health credentials can find success," says Moses. She cites Coca-Cola's Sprite Green brand in the US. "It looks an edgier drink than Raw and is very clear on the benefits as it flags up the natural sweetener ingredient. It's a lovely example of how a natural drink can be done in a more compelling way. And it remains true to the Sprite brand, whereas Raw cans look like a sepia photo of something and have lost a lot of the Pepsi brand cues."
Consumers used to a lighthearted soft drinks sector became confused by a cola that appeared to take itself too seriously and failed to convey what it was offering, suggests one wholesaler. "The consumer simply didn't know what Raw was," he adds.
Perhaps that is why PepsiCo went for the clearer description Pepsi Natural when it launched a version of the brand in the US in March last year. "Everybody appreciates what diet, light, cherry and caffeine-free are," the wholesaler says. "Raw is meaningless to most people."
But not to people outside the UK. For the time being, at least, no plans have been announced to shelve Raw in Norway, the brand's other key market. So what's different over there?
"European markets are more fragmented than in the UK and you have a much less fixed expectation of what a cola should be," says Miranda Walker, founder of Fairtrade cola Ubuntu, a brand that is performing well in Sweden after its launch three years ago. It is also on course to hit £500,000 in sales in the UK this year, thanks to a loyal student following and growing listings in Waitrose and Ocado.
"Raw was doomed from the start," she says. "In Britain people have a fixed concept of what cola should deliver. The key demands of the cola market are taste and refreshment and I don't think Pepsi Raw delivered on those. That was the fundamental flaw of the product. Pepsi Raw tried to take cola into a new category, it was trying to put more edge into Pepsi than rightly belonged there."
Red Bull Cola another "natural" cola seems to be suffering from similar problems. After its launch in May 2008, it has experienced a torrid past year, with sales falling 43.7% year 0n year to £2.44m.
The UK market is set in its ways, agrees Gray. "It doesn't like a lot of change, especially when it comes at a premium price."
Sweet and tangy, brown and bubbly and cheap drinkers of pop don't have very high expectations of their cola. PepsiCo and its bottler, Britvic, have learned that the hard way with Raw discounter Home Bargains is now knocking out four bottles for just 79p.
Nothing short of rejuvenation of the cola market that was the aim when Pepsi Raw was launched into the on-trade in February 2008.
But things went decidedly flat decidedly quickly and, having failed to bridge the gap between the niche and the mainstream, last week Pepsi's UK bottler, Britvic, finally ditched the brand for good.
The omens were never encouraging for the so-called "natural" cola. Britvic claimed the £1.5m it poured into the exclusive on-trade launch of Raw at the start of 2008 had been well spent, creating an edgy brand and a growing following among clubbers. Come October historically the quietest time in the soft drinks calendar but also at the absolute low point in the recession it apparently seemed a good idea to take Raw to the supermarkets. The recession had already claimed Coca-Cola's functional brand extension, Diet Coke Plus, pulled from the shelves that August. So was it doomed from the outset?
Tom Ellis, strategy and research director at brand agency 1HQ, certainly thinks so. "A lovely idea but a flawed concept for the current marketplace," he calls it.
Cola drinkers are not interested in ingredient provenance or health claims, he says, and Raw lacked the power to pull the health-conscious from the juice and water sectors. "If Raw did succeed, it was probably more in creating a cool Pepsi variant that could tap into the on-trade market," adds Ellis.
The suggestion is that Raw should have been further nurtured as a niche, underground brand before being flung into the mainstream. While the hip young things in Britain's bars and clubs had bought into the brand, the idea of a soft drink containing cola nut and apple extracts, coffee leaf and raw cane sugar was a far harder sell in the cut-throat supermarket aisles. With 250ml cans retailing for about 95p a pop, the heavily promoted off-trade was simply too tough a (cola) nut to crack. Grocery channel sales stood at £1.16m at the end of August ironically, an 88% improvement, but clearly an unsustainably low figure, with retailers delisting it in droves, and the rollout also appears to have taken the shine off on-trade sales too.
"The on-trade and the off-trade are completely different animals just because you've had success in the on-trade doesn't mean it will translate across," says Simon Gray, founder and managing director of Boost drinks. "Consumers are more willing to pay a premium price in the on-trade where it is less promotionally driven. But in the off-trade it's completely different people see cola as a good value, run-of-the-mill product."
It also needs exposure and the visibility, Gray adds. And these were two things Raw didn't have in the supermarkets.
Starved of promotional investment in the off-trade, retailers dedicated little shelf space to the brand, often siting the few facings above eye-level, meaning Raw was all too easily overlooked.
Backing the brand's off-trade rollout with clearer branding and an above-the-line marketing campaign to trumpet its natural credentials could have made the difference between success and failure, says Sally Moses, consultant at The Value Engineers.
"If marketed correctly carbonated soft drinks with health credentials can find success," says Moses. She cites Coca-Cola's Sprite Green brand in the US. "It looks an edgier drink than Raw and is very clear on the benefits as it flags up the natural sweetener ingredient. It's a lovely example of how a natural drink can be done in a more compelling way. And it remains true to the Sprite brand, whereas Raw cans look like a sepia photo of something and have lost a lot of the Pepsi brand cues."
Consumers used to a lighthearted soft drinks sector became confused by a cola that appeared to take itself too seriously and failed to convey what it was offering, suggests one wholesaler. "The consumer simply didn't know what Raw was," he adds.
Perhaps that is why PepsiCo went for the clearer description Pepsi Natural when it launched a version of the brand in the US in March last year. "Everybody appreciates what diet, light, cherry and caffeine-free are," the wholesaler says. "Raw is meaningless to most people."
But not to people outside the UK. For the time being, at least, no plans have been announced to shelve Raw in Norway, the brand's other key market. So what's different over there?
"European markets are more fragmented than in the UK and you have a much less fixed expectation of what a cola should be," says Miranda Walker, founder of Fairtrade cola Ubuntu, a brand that is performing well in Sweden after its launch three years ago. It is also on course to hit £500,000 in sales in the UK this year, thanks to a loyal student following and growing listings in Waitrose and Ocado.
"Raw was doomed from the start," she says. "In Britain people have a fixed concept of what cola should deliver. The key demands of the cola market are taste and refreshment and I don't think Pepsi Raw delivered on those. That was the fundamental flaw of the product. Pepsi Raw tried to take cola into a new category, it was trying to put more edge into Pepsi than rightly belonged there."
Red Bull Cola another "natural" cola seems to be suffering from similar problems. After its launch in May 2008, it has experienced a torrid past year, with sales falling 43.7% year 0n year to £2.44m.
The UK market is set in its ways, agrees Gray. "It doesn't like a lot of change, especially when it comes at a premium price."
Sweet and tangy, brown and bubbly and cheap drinkers of pop don't have very high expectations of their cola. PepsiCo and its bottler, Britvic, have learned that the hard way with Raw discounter Home Bargains is now knocking out four bottles for just 79p.
No comments yet