Meet the challenger brands taking on the soft drink giants

Karma Cola soft drink

Soft drink brands have not had the easiest of years. In March, then Chancellor George Osborne announced plans to introduce a sugar tax, which will put a levy on all sugary drinks by the end of 2018.

Mintel figures also show that 32% of soft drink consumers say sugar concerns have prompted them to limit their intake of non-diet variants. Energy drinks appear to be doing slightly better. Value sales of energy drinks in the UK increased from £974m in 2011 to £1,2bn in 2016, but are slowing.

Nevertheless, new challengers are relentlessly entering the British market to take on the soft drink giants.

One such brand is energy drink Carabao, which launched in the UK in August. Like its main competitor Red Bull, Carabao has Thai roots. The brand recently launched an outdoor campaign to gain awareness among the British public and is putting a heavy focus on sampling in commuter hubs.

The brand believes it can make its mark on the UK market by adopting a “much more inclusive” marketing strategy and focusing on both sexes.

“Current energy drinks brands are losing relevancy among large numbers of consumers. High-octane sports and rock music have proved themselves successful in engaging young men, but older drinkers, particularly women, are being ignored,” John Luck, CMO at Intercarabao, tells Marketing Week.

“Our approach to our marketing, advertising, product range and our partnerships is much more inclusive compared to our competitors and as such, our consumer base is broader.”

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Luck believes current associations with sport or needing an instant lift do not offer a wide enough opportunity for the brand. As a result, Carabao is looking to produce products that look and taste more like “soft drinks than energy drinks” by including higher levels of carbonation and choosing more “grown-up” flavours such as green apple.

“Our consumer testing confirms this is the right strategy as we’re seeing preferences for our product among older men and women over our competitors, which is driven by Carabao’s flavour profile and higher carbonation. This is why mass sampling makes up such a large part of our ongoing plans,” says Luck.

Carabao’s marketing tries to appeal to both men and women, something the brand says sets it apart.

Carabao’s sponsorship strategy

Red Bull already has a successful monopoly on sponsoring extreme sports like car racing, air racing or cliff diving. This is why Carabao has been forced to take a different route, and believes targeting a sport loved by the masses is a better approach.

Current energy drinks brands are losing relevancy among large numbers of consumers. High-octane sports and rock music have proved themselves successful in engaging young men, but older drinkers, particularly women, are being ignored

John Luck, Intercarabao

It has signed a three-year sponsorship deal with Chelsea Football Club and a similar contract with Reading FC that includes home and away kit sponsorship. Earlier this month, it also announced its title sponsorship of the English Football League (EFL) Cup, to be renamed the Carabao Cup from the 2017/18 season.

“This latest deal is a real game changer allowing us into the lives of over 16 million men and women who walk through the turnstiles at EFL matches every season,” Luck explained.

“Football is a fantastic platform for us because it is global and appeals to men and women of all ages, which means there’s probably a football fan or two in every household across the UK.”

Taking on Coca-Cola with ethics

Karma Cola is another challenger brand, looking to take on Coca-Cola with its Fairtrade and organic version of the classic fizzy drink. The company, which was founded in 2012, gives 3p of the cost of every bottle sold to cola nut producers in Sierra Leone. The brand claims that despite two billion colas being consumed every day, there is an injustice in the fact that cola nut farmers in Sierra Leone often live impoverished lives.

The brand’s kiwi co-founder Simon Coley tells Marketing Week it is important for Karma Cola to punch above its weight due to the saturated market in which it operates.

“We differentiate ourselves through the fact that no other brands of any other scale use these organic ingredients while benefiting people who traditionally use cola in their everyday lives in West Africa,” he says.

With a marketing budget significantly smaller than its Pepsi and Coca-Cola competitors, Karma Cola says it looks to cut-through by placing its brand story at the heart of its communications. Transparency around its ingredients is also considered incredibly important.

“We focus on the ingredients almost obsessively. That’s what makes the quality of the products. Brands shouldn’t hide anything around their ingredients, they should allow people to find out as much as they want,” comments Coley.

In this category, there are lots of ingredients that have been supplanted over time with artificial flavouring and colouring. We want to show people that we have nothing to hide.

Simon Coley, Karma Cola

When asked about the brand’s views on the sugar tax, Coley admits the brand has not yet found another suitable alternative as the taste of real sugar “just can’t be beaten”.

“If you don’t want a sweet drink, drink water. We wouldn’t encourage people to consume soft drinks in vast quantities; we don’t like large servings as it takes away from the quality experience,” he says.

“But it’s a level playing field, all soft drinks have to deal with it. We want to always be available as a choice to people who are interested [in soft drinks]. We will of course keep looking at alternatives to sugar.”

Karma Cola hopes to grow in the UK by taking a more low-key approach to its marketing by producing long-form content and finding like-minded partners to grow the business. Since its launch it has produced numerous magazines that tell the story of the brand and the people it positively affects.

Coley concludes: “We like working with other brands so we can try and support each other; especially quality restaurants and cafes that have similar mindsets to us. It’s all about finding like-minded people.”

The post Meet the challenger brands taking on the soft drink giants appeared first on Marketing Week.

Source: Marketing Week
Meet the challenger brands taking on the soft drink giants

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