As expected, after watching Pepsi-Cola Co. build a robust and profitable business out of Mountain Dew, Coca-Cola will launch Surge with $50 million in the U.S. in a direct attempt to cut into Pepsi's heavy citrus brand (AA, April 29). The ads will debut on the Super Bowl Jan. 26.
PAST COPYCAT MOVES
Over the past 25 years, Coca-Cola repeatedly has tried to build on the market leadership of its flagship brand by launching copycat brands in other flavors. But it's hard to find a successful copycat in Coca-Cola's lineup, whether it's Dr Pepper clone Mr. Pibb or Mello Yello-the first Mountain Dew competitor introduced in 1979.
Like Surge, Mello Yello was positioned squarely against Mountain Dew. Last year, selling in limited areas, Mello Yello volume sales were about one-1oth those of Mountain Dew.
In the U.S., Mountain Dew ranks No. 6 out of all soft drinks, with an 80% share of the estimated $5 billion heavy-citrus category.
"If they're going to clone Mountain Dew, I think they're in for an awful shock," said Chet Kane, president of consultancy Kane, Bortree & Associates.
Coca-Cola disagrees, saying there is no saturation of carbonated citrus drinks.
"Based on our research and the superior marketing and distribution strengths of our bottlers, Surge is poised to become the next major non-cola soft drink," said Jack Stahl, president of Coca-Cola USA.
AN ENCOURAGING SIGN
An encouraging sign is that its Sprite brand, after three decades of mediocrity, has blossomed in the '90s and supplanted Mountain Dew as the overall industry's fastest-growing major brand last year.
Also, in the heavy-citrus category, Royal Crown Corp. achieved 200% growth last year with a little-known brand called Kick. RC executives reported that Kick did especially well in markets where Mountain Dew was strong.
Still, Kick only sold 6 million cases last year, vs. more than 500 million for Mountain Dew.
Leo Burnett USA, Chicago, is handling Surge, as well as Urge in Norway; the two will share the tagline, "Feed the rush."
Even if Surge achieves only moderate success, it could provide benefits to Coca-Cola. It will force Pepsi to work harder on Dew, said beverage analysts, perhaps creating opportunities to hammer Pepsi brands in other niches.
Also, Surge will answer a frequent cry of Coca-Cola bottlers that they have been left unarmed in the high-profit heavy citrus category.
In Norway, where there is no Mountain Dew with which to compete, Urge has achieved awareness scores of more than 90% among males 12 to 29 years old since being launched in May.
Market research shows Urge is already the second-favorite brand behind Coke, a spokesman said.