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NEW YORK (AdAge.com) -- It turns out that if you slash marketing, you hurt sales.
For years lemon-lime sodas have languished while cola line extensions and emerging categories such as energy drinks and enhanced waters took precedence. Now, Sierra Mist, 7Up and Sprite are all poised to benefit from an influx of marketing dollars as their owners rush to prop up the second-largest carbonated-soft-drink category and target consumers who may be susceptible to a soda that at least seems lighter and healthier.
Since 2005, marketing investment has dwindled for Sprite and Sierra Mist, the No. 1 and No. 2 sodas in the category, respectively. Each brand slashed measured media spending by about 80%. In 2009, Coca-Cola's Sprite spent just $8.6 million, while PepsiCo's Sierra Mist spent $9.4 million, according to Kantar Media. That makes it a poor second cousin to cola: In 2009, brand Coke spent $234 million, while Pepsi received $136 million in measured media, according to Ad Age's 100 Leading National Advertisers report.
And as spending declined, the lemon-lime category, which accounts for roughly 10% of the $74 billion carbonated soft-drink market, has gradually lost market share and volume. It shed 160 million cases between 2000 and 2009, according to Beverage Digest.
"Across the category, investment had declined significantly. It's a function of mirroring what competitors are doing and of everybody being faced with different priorities," said Kristina Mangelsdorf, VP-natural and flavored sodas at PepsiCo. "But at the end of the day, lemon-lime is the second-largest [carbonated-soft-drink] category, and CSDs are the largest beverage category. When you look at it that way, why wouldn't you focus on lemon-lime?"
PepsiCo, along with competitors Coca-Cola and Dr Pepper Snapple Group, all seem to have come to that conclusion. In the coming weeks, both Sierra Mist and Dr Pepper Snapple Group's 7Up will introduce new formulas, graphics and advertising. And both brands say they are cramming a year's worth of investment into the next few months.
Sprite, meanwhile, launched its first new campaign in four years earlier this year. In the first half of 2010, Sprite spent $7.7 million on measured media, nearly matching what it spent for all of 2009.
"When you're doing line extensions, they take a lot of attention, bottler focus, shelf space, cooler space, and in most cases, they have not generated sustained growth. It's been boom, splat," said John Sicher, editor and publisher at Beverage Digest. "The return to focus on core [carbonated soft drink] brands in North America is both smart and overdue."
In addition to focusing on the lemon-lime category because of its size, executives point to other trends spurring investment. They say lighter, clearer sodas are perceived by some to be healthier, making it an opportune time to go after consumers who may have shied away from soft drinks for health reasons. And Ms. Mangelsdorf also pointed out that lemon-lime sodas are popular with the fast-growing Hispanic population.
PepsiCo is eliminating Sierra Mist in favor of Sierra Mist Natural, which is sweetened with sugar instead of high-fructose corn syrup. The move, which has been in the works for about 18 months, is two-fold. Research showed that brand loyalty in the lemon-lime category is lower than it is in the cola category. And the natural food and beverage category is exploding.
"There's not a strong reason to choose one [lemon-lime] brand over another. ... And when we asked consumers what would re-engage them in soda, 'natural' was the No. 1 concept," Ms. Mangelsdorf said. "The notion of a mainstream lemon-lime soda felt like a huge territory."
Ms. Mangelsdorf expects the shift will make Sierra Mist "extremely competitive" with Sprite, adding that the brand should easily exceed its previous peak performance figures. (According to Beverage Digest, Sprite is more than four times larger than Sierra Mist, with a 5.5% share in 2009 compared to Sierra Mist's 1.3% share and 7Up's 1% share).
Goodby, Silverstein & Partners created Sierra Mist's new graphics, as well as the campaign, which breaks Sept. 20. It will include 15- and 30-second spots, as well as digital, radio, print and out-of-home.
Sprite and 7Up contain HFCS, though the former also markets Sprite Green which uses Truvia, a "natural" sweetener.
7Up, too, is increasing its investment. Jonathan Rogers, brand manager for 7Up, said in the last four months of this year, the brand will be spending what it would normally spend in a full year. According to Kantar Media, 7Up spent about $25 million on measured media in 2009.
Brands We'd Like to See More Of
It's been years since consumers have seen much marketing from the lemon-lime brands. Likewise, venerable brands such as Fresca, Mug Root Beer and Tab have skirted most consumers' radars for awhile. Realistically, these brands won't be the recipients of major marketing funds anytime soon -- though Mello Yello and Squirt are actually poised to receive some attention -- but that can't stop us from hoping.
Originally a diet, grapefruit-flavored soda, it now comes in flavors ranging from black cherry to citrus lime to peach. The last marketing effort behind the brand was in 2005, when Fresca received a makeover, involving new packaging graphics. At the time, marketing from Campbell-Mithun positioned the brand as a "uniquely sophisticated" soft drink.
The brand hasn't been advertised since the early 1990s, but in December, Mutt, Portland was brought on board. This summer new retro packaging began hitting shelves, and out-of-home, radio and digital ads are on tap. Distribution is also being expanded from the Midwest and Southeast to the Northwest and Northeast.
Mug Root Beer
Launched: Early 1950s
Marketing efforts focus on loyal users and require little investment. For example, last year, it sent branded Brew BBQ kits to bloggers in advance of Father's Day. The brand ranks among the top 25 carbonated soft drinks, at number 21.
Owner: Dr Pepper Snapple Group
Distributed nationally, this grapefruit soda is actually preparing for a "big marketing push," according to a spokeswoman. Launching before the end of the year, it will include radio and out-of-home on the West Coast, as well as a co-packaging partnership with Jose Cuervo. A packaging redesign is also planned. The brand ranks among the top 25 carbonated soft drinks, at number 25.
Though Tab was the company's first sugar-free cola, its decline began with the introduction of Diet Coke in 1982. Loyalists can still find Tab in select markets -- one of our editors recently snagged one at a Stop & Shop in New Jersey -- though there hasn't been any marketing behind the brand since the early 1990s.