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Coke takes first steps in bold new US beverage world

By Ben Bouckley , 10-Sep-2012
Last updated on 11-Sep-2012 at 13:39 GMT

Coke takes first steps in bold new US beverage world

As the Coca-Cola Company launches a new range of water flavor enhancers under its Dasani brand from October allowing US consumers to personalize tastes, a top drinks analyst suggests it will take the nation time to get used to uncommon beverage concentrates.

Dasani Drops are a zero-calorie liquid beverage enhancer that allows consumers to mix flavor drops – housed in a 1.9oz (56ml) bottle with 32 servings – into their water in the desired strength. 

Coke is marketing its drops to consumers as a means of providing a “delicious, sweet way to enjoy drinking water throughout the day” and a “flavorful, fashionable accessory for busy moms and health-conscious people alike”.

John Roddey, vice president, water, tea and coffee for Coca-Cola North America, said: “Dasani Drops give people a new way to enjoy drinking water by pumping-up the taste of Dasani with a simple squeeze of the easy-to-carry bottle.”

One small squirt for Kraft...

Yet Coke is not the first firm to enter the growing flavored beverage ‘drop’ space: major stevia brand SweetLeaf (Wisdom Natural Brands) launched flavored stevia drops (pictured below) in the States in May 2011, and Kraft launched a product under the Mio brand (pictured left) last March.

Kraft's 'water enhancer' is sweetened with acesulfame potassium or Ace-K and sucralose, and is close to Coke’s offering in terms of packaging and, potentially, mass appeal.

Subsequently, Kraft launched a premium-priced Mio Energy line extension, with added caffeine, guarana extract and ginseng extracts, taurine and B vitamins. 

Delivers a health kick?

We asked Mintel global drinks analyst, Sarah Theodore, what the rationale was for large beverage brands moving into drops. Was it a case of health and wellness benefits, profit (good margins on a concentrated product in a small pack), or were the large firms tilting at an 'on the go' convenience trend?

"Convenience is certainly one benefit these brands are trying to offer," Theodore said. "They eliminate a lot of the preparation involved in other beverage mixes such as powdered drinks and frozen concentrates."

"But the bigger innovation with liquid concentrates is that they allow for customization in terms of flavor strength, mixing flavors, and what you mix them with. There have not been many options that have allowed that in the past.

Did Theodore believe beverage drops had potential to become a mainstream category? "This is a very new category in the US. Unlike the UK or other countries that have a market for squashes and cordials, there’s little in the way of beverage concentrates in the US," she said.

"So consumers are being exposed to this for the first time and it could take a while to become widespread."

Could soda sales crash land?

Since Sweetleaf's product (left) is stevia-based, it is also marketed as zero calorie, zero carbohydrate and zero glycemic index: a means of helping consumers “kick that daily soda habit” and cut out empty calories from their diets.

14 flavor varieties include English Toffee and Vanilla Creme), and Sweetleaf recommends that consumers add drops to water, but also smoothies and coffee, as well as yogurt and oatmeal.

Arguably, the drops category perhaps originated because big brands saw potential in a slew of more exciting flavored waters – but with some of these aimed at stealing share from soda (SweetLeaf markets it own flavored stevia drops as a healthier choice versus sodas), did Theodore believe Coke ran a risk of cannibalizing soft drink sales with such a product?

"There’s probably more risk of cannibalizing enhanced water sales than carbonated soft drinks, particularly as they add functionality to the drops, as they did with Mio Energy," Theodore said.

"But anything that adds another option in non-alcoholic beverages does encroach on soft drinks. I think the hope is that they will to boost sales of Dasani to compensate for that."

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