2011 LAUNCH FAILED TO TAP $770M 'SUSTAINED ENERGY' MARKET IN GREAT BRITAIN?

'Poof!' CCE's Powerade Energy is gone…like Keyser Söze in The Usual Suspects!

By Ben BOUCKLEY contact

- Last updated on GMT

Powerade Energy: 'And like that...Poof! It's gone' (Picture Credit: Coca-Cola Enterprises)
Powerade Energy: 'And like that...Poof! It's gone' (Picture Credit: Coca-Cola Enterprises)
Coca-Cola Enterprises (CCE) has quietly withdrawn Powerade Energy, which took it took two years to develop, from sale in Britain and one industry source tells us he thinks the launch was ‘foolish beyond belief’

The drink was launched with a fanfare in April 2011, and Stuart Agates, Head of Energy, CCE, said the drink – with glucose, B vitamins and caffeine – offered a “fantastic new sales opportunity for our retail customers”. ​But now 'poof!' it's gone, last year it seems, and no-one seems to have noticed...

“AC Nielsen estimate the category opportunity for ‘Sustained Energy’ drinks is up to £500m [Nielsen data] and we are confident that with this great-tasting and functional innovation from Powerade we can help the Energy sector to continue to build momentum…”​ Agates added in 2011.

But CCE confirmed to BeverageDaily.com today that it pulled the product, and said: "When any new product is brought to market, there is always some risk involved on how it will perform.

"Powerade Energy launched in May 2011 and did not deliver the continued rate of sale needed to make it a long-term success. We decided to phase out distribution of the brand last year and focus on our core energy range, Relentless and Monster.

‘A Remarkably silly thing to say’

Julian Mellentin, editor of New Nutrition Business ​and industry analyst, was unimpressed by Agates' comments, comparing what he said was yet another failed attempt to bridge the sports-energy drinks divide to WW1 generals sponsoring a foolish head-on charge against heavy machine guns, unduly confident they would break through.

“It’s a remarkably silly thing to say. It really doesn’t reflect well on their marketing nous if they look at a set of statistics like that and come to that conclusion, because if they had any know-how they’d see that the market is dominated by a couple of brands that own the consumer’s mind,”​ Mellentin told BeverageDaily.com this morning.

Discussing CCE’s Q2 2013 results last Thursday, analyst Bonnie Herzog from Wells Fargo Securities asked about CCE’s energy drinks sales, which were up 10% in volume and 6% in value in Q2 – driven by Monster – outperforming the broader category that was up 3% in volume, 5% in value.

CCE bets on Burn, Relentless, Monster…

What weaknesses were there in CCE’s portfolio that had offset the strength of Monster, and what was the firm doing to turn these brands around? Herzog asked executives.

CCE executive VP and European Group president Hubert Patricot said: “You would remember that we started also Powerade Energy quite recently. This has impacted a bit of the trend,”​ he said.

“But for the future, we are quite optimistic that the combination of Burn, Relentless and Monster is a good offer to the market in Europe, and we are gaining share with this portfolio.”

But William Douglas, CCE CFO, added that “new energy entrant” ​Powerade Energy was withdrawn from the market in 2012. “And we’re kind of lapping the last quarter of that sales volume in Q2 of last year”.

So how to explain Powerade Energy’s Keyser Söze-style disappearance? N.B. we’re only concerned by fictional character Kayser Soze’s ability to disappear here, as per Kevin Spacey’s character Verbal Kint in 1995 movie The Usual Suspects​, and make no connection between his bad behavior and CCE’s brand.

In 2011 CCE claimed Powerade Energy was the first British soft drink positioned to provide ‘Dual Energy’ to people “undertaking intense physical activity as part of their lifestyle”​.

“The current energy offering in Great Britain consists of two main types of products – Stimulate energy drinks and Revive energy drinks,”​ CCE said at the time, with Powerade Energy pitched at a ‘Sustained Performance Energy’ audience.

‘It’s just Powerade with caffeine’

But Mellentin described the drink as an “awkward”​ sports/energy crossover: “It’s just Powerade with caffeine, positioned against Red Bull and Monster that have the market pretty much sewn up in most countries.

“This kind of sports/energy crossover failure has been attempted probably 10 times a year now for 20 years and it never works. And still people persist with it.”

In the UK market Powerade Energy had been up against Lucozade – which had achieved the sports/energy crossover, a very rare achievement – Monster and Red Bull, Mellentin added.

“So it’s a bit like WW1 generals doing a full-on assault against machine guns really. Here are the machine guns – we’ve seen lots of people charge them and be wiped out, 99% of energy drink launches. So let’s use exactly the same strategy’ It’s just foolish beyond belief,”​ he said.

I can’t imagine how any senior manager would sign off such a patently ill thought-out strategy, to be perfectly honest. It shows tremendous naivety on the part of someone in marketing there.”

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1 comment

They never learn....

Posted by Dimitri,

When are they going to learn! This type of cross branding 90% of the time will fail. Big companies think because they have the money and the networks it will be easy to bump a crossover drink in the market and succeed. They should know better. First of all they are diluting there original brand with something that has a big chance of failure, so not only are they coming out with a failure but they are killing the brand in the customers mind.

Imagine if RedBull will come out with a Powerade type of beverage.....that would be a massive failure also. When you are a specialist in a segment (in the customer's mind) does not make you a specialist in another. Instead of making your brand stronger you are killing it. They would have had a much higher chance of success if they had given the product another new brand name altogether. Become the specialist in the customers mind, not the Jack of all trades.

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