Can Surge give a power boost to Coca-Cola Co.'s e-commerce strategy?
The drinks giant will rely solely on Amazon.com for the relaunch of the 1990s-era citrus-flavored soda in another sign that consumer-packaged good brands are seeking more online sales. Surge, which competes directly with PepsiCo's Mountain Dew, was discontinued in 2002 after debuting in 1996.
Despite the 12-year absence, Surge has maintained a passionate following of fans that have called for a return of the soda. In announcing the comeback today, Coca-Cola pointed to one fan group called the "The Surge Movement," which has more than 128,000 Facebook followers.
"Today marks an important day in The Coca-Cola Company's history, because we have so many firsts to celebrate: first re-introduction of a brand that has been discontinued and revived due to popular demand, first launch to rely solely on social and digital media, and first re-introduction of a brand via e-commerce," Wendy Clark, president of sparkling and strategic marketing for Coca-Cola North America, said in a statement.
In a subsequent post on the company's corporate blog, she added: "If expectations are met, this may be only the first of a variety of efforts we explore to launch niche products through e-commerce relationships," adding that "this will be a great learning experience for us and a refreshing opportunity for fans."
The marketer will sell a limited supply of 12-packs of 16-ounce cans on Amazon with "the potential to expand to other retailers," according to a statement. The 12-packs were selling for $14 on Amazon on Monday, and already generated dozens of customer reviews on the site, including one buyer who stated: "I just spent 45 dollars on soda and I'm not even mad."
The relaunch was first announced on the Surge Movement Facebook page, drawing more than 3,000 likes and 700-plus comments. Coca-Cola launched its own @Surge Twitter account to support the launch. The marketer has also purchased direct response ads on Facebook and Amazon that are expected to run soon. The company did not use an external agency. Overall marketing spending on the launch is expected to be rather limited, with the brand forgoing traditional advertising such as TV and out of home.
"In this new era of marketing, we're exploring segmented delivery of our portfolio to consumers," Racquel Mason, associate VP-sparkling flavors, Coca-Cola North America, said on the corporate blog. "Previously, a smaller brand would never have had a realistic shot at commercialization. Now with Amazon, consumers can order a product like Surge and have it delivered directly to their doorstep. It's the democratization of demand."
CPG marketers, which have lagged other categories in e-commerce, are beginning to take online sales more seriously as more consumers buy groceries online. Online sales of food and beverages will account for only 2.3% of the $304 billion that will be spent on e-commerce retail in 2014, according to projections from eMarketer. But a recent report by the Grocery Manufacturers Association stated that e-commerce could grow to 5% of CPG sales by 2018, or more than $35 billion in sales, and accelerate to 10% "soon thereafter."