A new brand in over a decade’s time was unveiled by the one of the largest soft drink companies in the world Coca Cola on Thursday – a line of new sparkling water. The new line of water called AHA will be launched by the company in the United States on March 2 next year and then the company will also look into global launch of the drink.
According to analysts, this move by Coca Cola is in response to a fall in the consumption of soda in the United States. This trend has also forced Coke and its rival Pepsi to make more investments in marketing and advertisement for their legacy drinks of soda brands as well as investigate creation of other healthier drinks for health conscious consumers.
Consumers across the world have been responding favorably to flavored sparkling water or seltzer. According to data from Beverage Marketing, there was a 26 per cent growth in 2018 in the sale of bottled sparkling water by volume to reach 531 million gallons. On the other hand, there was a 4.2 per cent growth last year in the volume of bottled water market and therefore this difference in growth rate of bottled sparkling water market makes it very lucrative even though it is just a small fraction of the overall bottled water market of the world.
The leader in this category once was LaCroix – a brand that is owned by National Beverage. But as upstarts like Spindrift and more established companies enter the arena, the company is now losing market share. For example, one of the brands in this segment that is set to become the next billion dollar brand will be the Bubly brand from Pepsi which was launched in 2018.
The aim of Coke is to position the new aha brand in a different way than the rest of the market. Added caffeine will be contained in two of AHA’s eight flavors, Citrus + Green Tea and Black Cherry + Coffee. However the brand will not be too different because those will be sold in cans and not in bottles.
AHA is not Coke’s first entrance into sparkling water.
“For us, we’re not new to it, we’ve been watching for a differentiated space,” Shane Grant, Coke’s head of its North American still beverages unit, said in a television interview.
In 2014, the Dasani’s line of sparkling water was launched by the Atlanta-based company and the AHA will replace that brand at the retail stores. A sparkling version of Smartwater was also launched by Coke in 2015. The company also plans to various flavors to its nonsparkling Smartwater drinks in 2020.
According to Nielsen, there was a jump of 27 per cent in the retail sale of Coke’s North American sparkling water in 2018. However last year, the company’s net revenues dropped by 10 per cent to $31.9 billion.
“We never rule [acquisitions] out, but we’re fairly focused with this on extending our new brand and creating a new brand, as well as extending in other categories of our core equities,” Grant said.
(Adapted from CNBC.com)