Under Exec VP-Principal Operating Officer/North America Douglas Ivester and Senior VP-Chief Marketing Officer SergioZyman, Coca-Cola is looking hip, willing to take risks-and naive about the ease and speed with which a behemoth can conquer the rapidly changing, $6 billion New Age beverage category.
"We have said that we are going to accelerate both the frequency and the velocity of our new-product introductions, and Fruitopia represents our initial effort," Mr. Zyman said.
The usually secretive executive hosted the splashy New York press conference last week to introduce the Fruitopia line of eight juice drinks with cosmic names like Lemonade Love & Hope and the Grape Beyond.
Indeed, Fruitopia is Coca-Cola's first new-product introduction since Chairman-CEO Roberto Goizueta pledged late last year that the usually conservative company would become more agile in introducing trendy drinks with short but profitable life spans.
"I think they're understanding the future of the beverage industry," said Leonard Marsh, ceo of New Age beverage leader Snapple Beverage Co.
The new approach recognizes that colas still account for the bulk of soft-drink sales but that growth is coming primarily from newer niches. Those include ready-to-drink iced teas, sports drinks and juice-based beverages.
Sales of all New Age bever ages are ex pected to grow about 50% this year. Traditional carbonated soft drinks, by com parison, will re main flat at about 3% sales growth.
Having set its course, Coca- Cola is sparing no effort or ex pense to launch Fruitopia. The company will spend $30 mil lion this year on funky, kaleido scopic advertis ing for the line.
Coca-Cola hopes Fruitopia and its existing New Age prod ucts (like Pow erAde sports drink) will snare a 30% share of the $6 billion U.S. New Age beverage market within three years.
That lofty goal may illustrate a basic misunderstanding about New Age beverages.
"I think that's overly optimistic," said Snapple's Mr. Marsh. "It's an extremely fragmented market."
The term "New Age" originally referred specifically to Clearly Canadian and similar all-natural bottled beverages, mostly clear in color with hints of fruit juice. Since that segment began to decline last year, "New Age" has evolved into a catch-all term for anything that isn't a traditional carbonated soft drink.
If Coca-Cola is to reach its 30% market share goal, "they'll have to do it with teas, isotonics, sparkling waters," not Fruitopia alone, said Michael Bellas, president of New York-based research and consulting company Beverage Marketing Corp.
In the past, Coca-Cola's lethargy foiled its efforts to capture a large share of the new market. It introduced Nordic Mist, a Clearly Canadian-type drink, after the latter's popularity peaked in 1992.
And Coca-Cola admits Tab Clear, a clear cola-New Age hybrid, was a mistake.
Even Fruitopia, being introduced under Coca-Cola's Minute Maid banner, took two years to develop. That's longer than many products exist in the fast-moving world of carbonated soft-drink alternatives.
Pepsi-Cola in 1992 declared itself a "total beverage company." One of the first products to roll-out nationally under that mandate is Ocean Spray Lemonade. Marketed under a joint venture with Ocean Spray Cranberries, Pepsi-Cola will give the lemonade its first national marketing effort, via BBDO Worldwide, New York, this year.
But by accident or design, Coca-Cola's timing might be right for Fruitopia.
Juice drinks represent "one of the newer battlegrounds in the New Age market" and are growing faster, though from a smaller base, than ready-to-drink teas, Mr. Bellas said.
The first three Fruitopia TV spots, created by Chiat/Day, New York, feature kaleidoscopic images of fruit with funky graphics and international music.
"Welcome to Fruitopian life," is the theme of the offbeat campaign that refers to body, mind and planet. One spot, for example, suggests: "This is what citrus consciousness can do to your tongue. Imagine what it can do for your soul."
Advertising Age critic Bob Garfield said of the spots: "Is there really any nostalgia for the embarrassing pop psychedelia of the '60s? And does that fit into the phony all-natural preoccupations of the '90s? I'm skeptical. The kaleidoscopic effect in these spots is eye catching, but between that and product names like `strawberry passion awareness,' it's a little more yogi than I can bear."
Still unclear is whether Chiat or McCann-Erickson Worldwide, New York, will buy media. Chiat handled media planning for the launch; Mr. Zyman said media buying will go to "whomever can buy it most effectively."
Although McCann has lost all creative clout on the business, it has maintained a stronghold on global media buying. To help bolster that relationship, the agency has appointed William Cella, 43, to the new post of exec VP-broadcast and programming. He was previously a VP at ABC.
Mr. Zyman told Ad Age last week that Coca-Cola has completed a restructuring of its agency compensation system. The new system is believed to scale back compensation to Coca-Cola's media buying agencies internationally, making funds available to pay Chiat and other creative shops recently added to the marketer's agency roster.
Most recently, Mr. Zyman awarded D'Arcy Masius Benton & Bowles, New York, responsibility for Coca-Cola's Fanta brand in Latin America.