DRY's positioning as premium soda brand lets it prosper as sales in overall category dry up

By Hank Schultz contact

- Last updated on GMT

Related tags: Soft drink

DRY's positioning as premium soda brand lets it prosper as sales in overall category dry up
When creating her DRY line of premium carbonated beverages 10 years ago, founder Sharelle Klaus sought to create a new niche in the beverage world.  Which was a fortuitous thing, as the brand has waxed even as the soft drink category as a whole has waned.

DRY, based in Seattle, bills itself as the fastest growing premium sparkling beverage line in the US.  Sales of the brand were up by about 65% in SPINS data from late last year, or 9 times more than the carbonated beverages subcategory in the natural channel, where sales of these beverages have increased in recent quarters.

Overall, carbonated beverage sales and especially sugar sweetened sales have fallen.  Sales of diet soda were in “free fall” according to Nielsen data from last year, and sales of sugar sweetened soda were off, too. In a Gallup poll from last year, 63% of respondents said they were “actively avoiding” soft drinks.

Room for innovation

From the get go, Klaus said she wanted to do something different. At the time of the brand’s launch, soft drink sales were still booming in the US, and the term “supersize” was still a viable marketing term, rather than a mark of opprobrium and derision.  So even though she doesn’t claim to have been a seer, Klaus saw a space for something new in the category.

“My vision was pretty big to start with.  I wanted to create a whole new category of sparkling beverage.  We drink so many soft drinks in the US but there hadn’t really been any innovation.  I saw what was going on in the craft brewing movement.  And I saw what was going on in the retail side, with the growth of natural making more room for new products in that channel,”​ Klaus told FoodNavigator-USA.

“I thought there was room to create a soda that had a culinary aspect, if you will.  From the start, the flavors were designed to pair with food,”​ she said.

“We have really created a very unique beverage line that answers the needs of our consumers. Our core demographic is very food centric.  They want true flavors that are derived from real food,”​ Klaus said.

Klaus said she was driven to a clean label positioning almost by default as a side effect of the way she developed the initial concepts.

“We are not adding a bunch of stuff to these, because we couldn’t. I created a lot of these in our kitchen,”​ she said.

Taste is everything, and that’s why Klaus said has stuck with natural cane sugar as her sweetener.  Klaus said the brand was founded on a lower-sugar positioning, with a quarter to a third less sugar than her mainstream competitors.  But sugar’s taste and mouthfeel can’t at the moment be replaced with something she finds acceptable.

“Right now we wouldn’t consider an alternative sweetener. In my opinion there is no beverage on the market sweetened with stevia that doesn’t have that bitter aftertaste,”​ she said.

Making the most of mixers

To extend the brand’s healthy indulgence positioning, Klaus, as part of the company’s 10-year-anniversary, has brought back some flavors from the company’s early days, such as lemongrass, and has launched a 750-ml bottle, sort of a connoisseur’s packaging.  This last innovation is aimed squarely at one of the brand’s most robust use occasions, that of a mixer.

“The very first chef I presented DRY to, we sat down and within 60 seconds his bartender came over said, ‘I could use that.’  I went the to Aspen Food and Wine show this year and at a number of the hospitality parties going on DRY was being used and I didn’t know that. Many people are spending a lot of money on their spirits and they don’t necessarily want to pair those with a 99 cent bottle of tonic water,” ​she said.

Fight for shelf space

Klaus said as the soft drink category matures and perhaps even contracts, there is still room for the premium slices of the pie to grow. In the food distribution world, it’s a jungle like competition for shelf space and positioning. Klaus said she came from the high tech world, where the paths to market are pretty well defined. The labyrinthine path a new food or beverage product must successfully negotiate to even get to market in the first place was a (perhaps unwelcome) revelation to her.

“The biggest surprise to me was how difficult the distribution was. It’s all about who are your distributors, and what kind of third party distributors you can reach. It’s not a real elegant, streamlined system. When you look at the big brands, they have all of this shelf space.  I would love to grow our shelf space from, say, three feet to six feet or even twelve feet. But it’s all about the distribution. As I tell my people, if this were easy, everybody would be doing it,”​ Klaus said.

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