NEW YORK -- It has been said that new products are the lifeblood of the beverage industry. But is it possible to have too much of such a good thing? A recent report from Morgan Stanley Equity Research, New York, says yes.
In our view, the main issues surrounding the 2006 plans for the U.S. soft-drink industry are: 1) the degree and intensity of product proliferation; 2) the cost of supporting the new launches while continuing to invest behind core' brands; 3) the cost of the additional complexity for the bottlers, which will include managing the explosion [image-nocss] in the number of SKUs as well as the shelf and cooler space; and 4) whether the non-carb growth can more than offset the continued weakness in CSDs, the report said.
Titled Beverages: As 2006 Soft Drink Pipeline Emerges, Incrementality and Complexity are Key, the report issued October 9 by analysts William Pecoriello and Brett Cooper outlines an expected flood of new products that could be baffling to retailers.
The emerging 2006 new product development plans for the U.S. soft-drink industry reveals not only that the pace of innovation continues to accelerate, but also the emergence of hybrid drinks, products straddling two categories, such as CSDs and coffee, or CSDs and energy drinks, said the report.
The report outlines 20 potential 2006 product introductions from Coca-Cola and PepsiCo, alone, including:
Life Water from SOBE, an enhanced water from Pepsi. Dasani Sensations, a flavored/enhanced water from Coca-Cola. Diet Coke Plus, an enhanced carbonated soft drink (CSD). Black Cherry Vanilla Coke and Coca-Cola Blak (coffee), flavored CSDs. SOBE Gold and Mountain Dew MDX, energy drinks from Pepsi. Vault, Vault Zero, POWERade Advance and Full Throttle Fury, energy drinks from Coca-Cola. Double Shot Light and Non-Dairy Starbucks Coffee, ready-to-drink (RTD) coffee beverages from Pepsi. Far Coast, an RTD coffee drink from Coca-cola. White Tea and Diet Peach Tea from Pepsi. Sokenbicha and Nanairo Acha, teas from Coca-Cola.Meanwhile, 2005 continues to be a bonanza of new beverages rollouts, as well, in a variety of categories. Recent product introductions have included:
Coca-Cola's first extension of its Dasani flavored waters with Dasani Strawberry joining raspberry and lemon. Coke also has rolled out a POWERade line extension called POWERade OPTION, a low-calorie, low-carbohydrate sports drink. San Diego-based United Brands Co.'s rollouts of Diesel, a nutrient-packed energy drink, and 3SUM, a ready-to-drink, alcoholic malt beverage with fresh fruit flavors and a combination of caffeine, ginseng and taurine. Rye, N.Y.-based INOV8 Beverage Co.'s reintroduction of No-Cal, the first diet soda sold in the United States, now available in four flavors. Boynton Beach, Fla.-based Elite FX Inc.'s Celsius, the world's first calorie-burning soft drink. Boulder, Colo.-based IZZE Beverage Co.'s 12-packs of 8.4-ounce cans of its sparkling juices. Cincinnati-based The Health Co.'s Logic Juice 4 Joints, a ready-to-drink supplement with glucosamine and chondroitin. Fort Lauderdale, Fla.-based Javaltion Coffee Co.'s JavaFit, the first functional gourmet coffee. Sacramento, Calif.-based Nor-Cal Beverage Co. Inc.'s Go Girl, a sugar-free energy drink aimed solely at women.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.