Coke tries a Dew me-too, again

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Can Coca-Cola successfully do a Dew?

The world's largest beverage company is briskly working to fill out its product pipeline with diet, non-carbonated and energy drinks, but one segment is giving Big Red the blues: the high-energy citrus variant owned by PepsiCo's Mountain Dew. The No. 4 carbonated soft drink was the only full-calorie brand in the top 10 to grow last year, with volume up 1.5%, according to Beverage Digest. Category leader Coca-Cola Classic volume dropped 3%, while No. 2 Pepsi-Cola fell 2.5%.

Executives at Coke have repeatedly declined to comment on industry reports that the cola king is developing a Dew me-too called Vault. Without offering details, Don Knauss, president of Coca-Cola North America admitted to attendees at the Beverage Forum conference last week that the marketer would test Vault in selected U.S. markets.

This latest answer to Mountain Dew is expected as early as June, but it will come with the added jolt of energy-drink ingredients, according to executives close to the company. It is expected to be handled by independent Mother, New York, which referred calls to the marketer.

"They need to have some point of difference," said one executive knowledgeable about the product, who said the hybrid citrus soft drink/energy drink is intended to provide more of a boost than Mountain Dew. "People will perceive it to be more of a player in the caffeinated/energy-oriented drinks."


"Imitating can be an expensive waste of time," said Tom Pirko, president of BevMark. "Isn't it time to come out with new things rather than copy competitors?"

Over the years Coke has struggled to have a viable challenger to Mountain Dew, which has refined its position with young males from hillbilly brand to dude fuel through extreme sports and videogames. Among the brands that have come and gone are Surge, the acid-green soda and its milder spin-off Citra and Mello Yellow, which is still popular in the Southeast, but never gained mass appeal. Launched in 1997, Surge was discontinued in 2002, and now is being lobbied for revival by

The marketer began mall testing a handful of Vault formulas in states including Kentucky and New York last fall, and controlled market tests at convenience stores and gas stations in the Midwest, according to industry executives. The products have since been pulled, according to these executives.

Even if Coke does open the Vault this summer, it will have a tough time competing with Mountain Dew. After four years of declines, the brand turned the corner in 2004 thanks to a refocused marketing strategy and budget.

"We have heard that Coke is going to again attempt to copy Mountain Dew, and we're confident that it's no small feat," said Angelique Bellmer Krembs, marketing director for the Mountain Dew Trademark at Pepsi-Cola North America.

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