Buoyed by Rising Sales, Dr Pepper Further Ups Ad Spend

Marketing Boost of 25% Helps Canada Dry Increase Volume 10% in First Quarter, Non-Carbonated Drinks Up 6%

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NEW YORK (AdAge.com) -- Dr Pepper Snapple Group is attributing big first-quarter volume gains to heavy marketing spending. The marketer of brands such as Dr Pepper, Canada Dry, 7Up and Mott's boosted first-quarter media spending by 25% and says it plans to increase its second-quarter outlay by about 20%, or $25 million.

Gene Simmons in Dr Pepper's first-ever Super Bowl ad.
Gene Simmons in Dr Pepper's first-ever Super Bowl ad.
In the first quarter, brands such as Canada Dry benefited from a campaign touting it as "Made from real ginger." The brand saw volume jump by 10%. Dr Pepper, which saw volume rise 3%, appeared in its first-ever Super Bowl ad, starring Gene Simmons. The spot promoted Dr Pepper Cherry, which was cited, along with Dr Pepper Heritage, which uses cane sugar instead of high fructose corn syrup, as contributors to the brand's growth.

Overall, the company reported that carbonated-soft-drink volume rose 2% during the first quarter, no small feat given the declines the overall category has been seeing. In addition to growth at Canada Dry and Dr Pepper, Crush was up 22% on expanded distribution, and Squirt grew 8%.

Dr Pepper Snapple Group's non-carbonated beverage portfolio, up 6%, also showed strong volume gains. Snapple volume jumped 17%, Mott's rose 14%, and Hawaiian Punch was up 7%.

"These results demonstrate our ability to grow shares through innovation and through marketing campaigns. And we will continue to drive these investments," Larry Young, president-CEO, said during a call with analysts. "As brand owners, we know that increasing the relevance and awareness of our brands and investing incrementally are key to our long-term success."

Marketing in the works
The company has several major marketing programs in place for the second quarter. The flagship Dr Pepper brand is poised to benefit from a major blitz for "Iron Man 2," which opens tomorrow. The marketer's three-month ad and retail campaign includes 14 collectible cans and a series of TV ads featuring "Iron Man" creator Stan Lee. And, already, the company says the Dr Pepper brand is benefiting from last month's sponsorship of the Academy of Country Music Awards, which generated more than 200 million impressions through a mix of TV advertising and social media.

On the non-carbonated side, a major partnership with NBC's "The Celebrity Apprentice" will give plenty of exposure to Snapple. In this month's finale, the final two celebrities must create and market a new Snapple tea. The finalists will name the tea and design a label as well as shoot a 30-second TV spot and create a print ad.

This year's increased marketing investments come on top of a year where the company muscled up on advertising in the midst of the recession. Jim Trebilcock, exec VP-marketing, led the charge, with the support of Mr. Young, to get aggressive in marketing well-loved brands such as Mott's, A&W and Canada Dry that hadn't seen any advertising investment since the earlier part of this decade. The company also gave plenty of support to its flagship Dr Pepper and Snapple brands. In all, it boosted 2009 spending by 15% to $409 million from $356 million.

McGarryBowen handles creative duties for Canada Dry, Sunkist and A&W Root Beer. Deutsch, Los Angeles, is responsible for the Dr Pepper and Snapple trademarks, while Y&R handles 7Up and Laird & Partners handles Mott's.

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