The new look – which KeVita had planned to debut at the Expo West trade show last week– will roll out in mid-to-late May, said Jim Spalding, senior director brand marketing, strategy, comms, media, at PepsiCo.
“When we were looking at our products on shelf, talking to customers, and looking at some of the competitive set, we realized we weren’t standing out as much as we wanted to on shelf, so it encouraged us to take a step back, make sure we understood where the equity was really driven from, which was the ‘V,’" he told FoodNavigator-USA.
“Consumers were looking at the [KeVita master brew kombucha] product and saying, Oh that’s the ‘Master’ brand, instead of KeVita, so through a ton of research we realized that the V was the focal point and it also gave us a distinguishing mark on shelf to give us that brand presence and pop we were looking for.”
The new-look bottle also features more ‘fruit-forward’ graphics and tasting notes down the side clarifying the different KeVita products, said Spalding.
According to data from SPINS, US retail sales of kombucha were up 3% in the 52 weeks ending January 26, 2020, vs growth of 25.4% in the year to Jan 27 2019, and growth of 60.1% in the year to Jan 28, 2018.
‘We’re outpacing the [kombucha] category’
So how does Spalding view the changing dynamics in the kombucha category, sales in which have recently slowed after several years of strong double-digit growth (see box above)?
“We’re outpacing the category, and we actually think we have a ton of runway, but what we’ve seen is that there’s a lot of crowding on shelf," he said.
“If you’re a consumer and you walk up to a category for the first time, usually you’d see a #1 and #2 brand, and then you’d see regional brands and private label, but what we’ve seen in kombucha is that there’s a lot of choice, and when you look at the shelf, the brands [that are driving dollar sales and velocity] are not always represented [with as many facings as their sales might warrant]."
The long tail
He added: “I think retailers have brought on a lot of brands in what is still a relatively new category, and I think it stalls consumers’ purchase behavior a little bit, so I think what you’ll see over the next 6, 12, 18 months there’s going to be a separation of some of those small vs some of those larger brands and consumers are going to have an easier time making their choice.
"Retailers are starting to right size the kombucha category. Not in terms of the number of facings/overall space, but in terms of the number of brands and the flavor proliferation."
“We say to retailers that we’ve done a ton of research and this is what consumers are looking for, and then we show them the data on space to sales as an index, so then it's a case of let the data decide: is this [brand] underspaced or overspaced? We also talk about consistent taste and quality, and truth in labeling [many kombucha brands have been hit with lawsuits over sugar and alcohol levels although Spalding would not comment on whether he felt rivals were being transparent on this front].”
‘Consumers are looking for something they can pour at a party’
Asked where he saw the white space in the category, he said: “Household penetration is fairly low but still rising fairly quickly so we are always looking at ways to expand the category or brand, so most recently we launched a 40oz growler as consumers are looking for something they can pour at a party, plus we’re also looking at how can we bring new consumers or cohorts into the category.”
He added: “We also think about this in terms of our channel strategy, so certain consumers are looking for larger sizes, greater value in the club channel, for example. But one of the biggest barriers in this category is taste, and we lead in taste."
Asked if KeVita is planning a move into cans – something several kombucha brands including Humm and Brew Dr have tried lately – he said: “Right now we don’t have any plans to go into cans.”
Sparkling tonics, apple cider vinegar
So how are KeVita’s other products doing?
“The apple cider vinegar is probably like a half a second before its time," conceded Spalding, "But I think it’s one you’re really going to see blossom in the coming months and years, while the sparkling probiotic drink is definitely a good way to enter the [fermented/functional beverages] category.”