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Coca-Cola ups the sparkling water ante

Coca-Cola North America is adding a new sparkling water brand, AHA, to its lineup in March 2020, seeking to differentiate itself from the pack with eight fusions blending mainstream fruits with newer, niche flavours.

Created in about six months, AHA will be the beverage giant’s first new brand in a decade. It will replace Coca-Cola’s Dasani-branded sparkling waters, which never gained much traction against other major brands, when it launches next March.

Eight bold flavour fusions – Lime + Watermelon, Strawberry + Cucumber, Citrus + Green Tea, Black Cherry + Coffee, Orange + Grapefruit, Apple + Ginger, Blueberry + Pomegranate and Peach + Honey – pair widely appealing fruit flavours with trending but less expected ones.

The black cherry and coffee and citrus and green tea flavours will each have 30mg of caffeine.

The calorie-free, sodium-free offerings will hit stores in multi-packs of 12-fl-oz cans (354ml) and in 16-fl-oz (473ml) individual cans.

With health and wellness a focus for consumers, sparkling water has been a category of growth as sugary traditional sodas have declined.

Coca-Cola quotes Nielsen data showing 27% sales growth in Coca-Cola North America’s sparkling water brands. Among those brands are Smartwater Sparkling and Topo Chico, a sparkling mineral water from Mexico.

“Our partners told us, ‘We don’t need yet another lime or berry-flavoured sparkling water. We need something fresh and new that can help grow the category’,” said Julie Siwemuke, sparkling water director at Coca-Cola North America.

Extensive research and consumer insights informed the development process that brought AHA from concept to prototype in just over six months.

In addition to mining category purchase data, Coca-Cola spoke to thousands of consumers – from sparkling water loyalists, to occasional drinkers, to those who’ve tried a brand or two but haven’t found what they like. Learn more about the AHA flavour development process.

“There are unmet needs for consumers in the category today, both for those who don’t drink sparkling water regularly today and for those who do,” said Siwemuke.

“When shoppers browse the sparkling water aisle, they’re looking for interesting and approachable flavours that offer a refreshing treat. They’re also drawn to fun, colourful brands with personality.”

“As the largest and fastest-growing part of the water business, mainstream flavoured sparkling water is a segment we know we must double-down on. AHA is our big-bet brand in this big-bet category.”

Celina Li, VP, Water, Coca-Cola North America

Americans are drinking sparkling water in more occasions and times of day – and for more reasons – than ever. The AHA team intentionally developed aromatic flavor combinations to meet these evolving needs.

For example, Lime + Watermelon and Strawberry + Cucumber profiles meet the desire for flavor-forward refreshment. And Citrus + Green Tea and Black Cherry + Coffee include 30 mg of added caffeine for a little morning or afternoon pick-me-up.

Coca-Cola North America’s last brand debut was Gold Peak, a tea brand, in 2006 and which is now a billion-dollar brand.

A water for everyone

Coca-Cola North America is taking steps to drive growth in multiple segments within the water category, which saw almost as much retail growth as all other NARTD segments combined in 2018.

In 2020, smartwater will enter the leading growth segment in premium water with the launch of smartwater still flavours. The lineup will include flavors like cucumber-lime, strawberry-blackberry, watermelon-mint and pineapple-kiwi and offers shoppers flavor without the bubbles.

smartwater’s new still expansion will capitalise on the more than 75% growth of premium flavoured still water in 2018 (Source: Nielsen) and joins a full spectrum of smartwater hydration solutions which include alkaline and antioxidant varieties. Get a brand-by-brand breakdown of Coke’s water lineup.

Shane Grant, president, Still Beverages Business Unit, Coca-Cola North America, said these innovations not only demonstrate the company’s commitment to invest in the fast-growing water category but also the cultural change that is occurring to approach new growth opportunities with discipline, but also to be agile, move faster and take smart risks.

“We’re constantly expanding our portfolio with new categories, flavours and packages,” Grant said. “This vision is coming to life through the fastest-growing category in our largest market with innovations that meet evolving needs and preferences.

“Water is a primary example of how Coca-Cola North America is embracing a true total beverage company strategy with exciting new brands like AHA.”

Another step away from sugary sodas

Soda consumption in the US is currently near a three-decade low, according to Beverage Digest, and that tepid demand is reflected in many other countries. Health-conscious consumers are pivoting away from those sugary drinks, as tougher regulations – like soda taxes in certain markets – exacerbate the pain.

That paradigm shift seems like a major headwind for Coca-Cola, but it wisely countered that trend by expanding its portfolio with bottled water, juices, teas, sports drinks, energy drinks, coffee, and even alcohol. It also launched zero-sugar and low-calorie versions of its flagship sodas.

Those moves enabled it to post stable organic sales growth over the past five years, and Coca-Cola expects its organic sales to grow “at least” 5% in 2019.

Source: Coca-Cola, MarketWatch.com, Fool.com

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