Reduced wholesale prices, intended to deliver a lower everyday price to consumers, took effect about four weeks ago and mark "a major strategic change" for the $550 million brand, said Greg McCormick, director-Minute Maid marketing at Coca-Cola Foods. New pricing is just now showing up on store shelves, said John Clendening, VP-Minute Maid business team.
"We allowed our everyday price to get a little too high," Mr. McCormick said. He described Minute Maid's previous pricing and promotion plans as "very inefficient" and said the brand's new strategy involves a sig nificant reduction in promotional spending with the trade.
The price cuts come as Coca-Cola Foods claims it will more than double
ad spending for the brand this year to close to $25 million.
Minute Maid's total orange juice volume sales dropped 6.4% in gallons for
the first eight months of this year, vs. the year-ago period, according to
A.C. Nielsen Co. Its share declined to 22% from 23.7%. The $3 billion
category as a whole fared better during that period, with volume up 0.8%.
Minute Maid is lowering prices on all forms of orange juice after
suffering declines in all three segments-frozen concentrate, chilled/from
concentrate and chilled/non-concentrate. Minute Maid has long been
dominant in the frozen section, but market forces have been boosting the
prospects of the non-frozen segments. Minute Maid is hurting most in
chilled/non-concentrate, which is also the highest price-per-gallon
Recognizing the consumer trend toward ready-to-serve, Minute Maid had
previously taken steps to catch up there, including new ads and packaging,
and a variety of consumer and trade promotions. But it took its eye off
the major factor of price-remaining less flexible than competitors-and has
suffered as a result.
The losses reflect Minute Maid's own mistakes but also a fundamental
change in the