But rather than following the lead of other major CPG companies at the time and embracing a zero-based budgeting approach, Klavsons took the long view and doubled down on marketing, branding, sales and distribution – a decision that some might have viewed as risky, but which is paying off now with a near 60% sales increase in 2020 that allowed Calypso to surpass Lipton Brisk to become the second largest player in the shelf stable lemonade category.
While the company’s sales spike last year may have been due in part to pandemic-inspired increased consumer grocery spending, it is on top of strong year-over-year growth from the prior two years, including a 33% increase in 2019.
“When we took the business, it had declined about 5-6% in 2017, and the idea of a turn-around might have been a little bit tough,” Klavsons admitted to FoodNavigator-USA. But, he added, he saw lot of potential for the brand, which he said had a great name and position as a founder of the flavor lemonade category and which virtually flew off shelves with little to no marketing or sales support.
“We knew it just needed a little push and a significant investment to get the business back to growth mode, and that is essentially what we did over the last three years – we’ve brought this brand back,” Klavsons said, adding that he expects 2021 to be a “breakout year” for the brand as its investment in new branding, products and a marketing & sales approach continue to pay off with increased distribution.
Addressing juice’s sugar problem
Before Klavsons could turnaround Calypso, he said he needed to understand why consumers loved the brand – and why they were walking away. What he discovered was a common tale of reversing fortunes shared by the overall juice category, which for decades consumers flocked to for its health-halo, convenience and fun, but more recently saw sales decline due to sugar concerns.
“The essence of Calypso’s Taste of the Island branding was of a vacation in a bottle,” with bold flavors that could recall trips to the tropics or other getaways, but like many juice brands in the middle of he last decade, Calypso’s sales began to falter as consumer concern about sugar increased, Klavsons said.
He explained that while Calypso performed well across consumer sets, regardless of age, ethnicity or other metrics, consumers told the company through social engagement that they were leaving the brand after years of loving it because it had too much sugar.
Rather than feel dispirited, Klavsons said he saw an opportunity to take the brand into the low- or no-sugar category, where only about 25% of carbonated soft drinks, 27% of teas and only 10% of lemonades existed.
“It was pretty clear that there was an opportunity there. But there was a reason that only 10% of lemonades were low- or no-sugar, and that is because it is really, really hard to do. But we figured it out, and we launched the Light lines [in 2020] … which immediately leapfrogged where the category has been” and ultimately captured 15% of the company’s business in Kroger, he said.
Calypso’s entry into the no- or low-sugar lemonade category came after a year of testing “all the different sweeteners, even natural ones, such as Stevia, which is very polarizing,” before landing on sucralose, which Klavsons lauded as sweet with out leaving a “nasty taste in your mouth.”
New flavors bring excitement
In addition to launching a line of low- and no-sugar lemonades, Calypso expanded its already broad line with new flavors that continued to deliver on the brand’s promise of escapism – something many consumers are desperately seeking after living at home during the ongoing pandemic.
“Any category or business needs excitement, energy and interest. So, in 2018 we formulated something called our Island Waves flavor,” which a combination of different tropical flavors that quickly became one of the brand’s top four selling SKUs, Klavsons said.
The brand also innovated a series of flavors that targeted specific consumer groups and regions, including a Cucumber and Jamaica that is popular in Hispanic and West Coast markets, and the Coral Blast, which allow the national brand to resonate with local markets.
By offering at least 19 flavors of lemonade, limeade and light options, Calypso is not only able to tailor offerings to different consumer groups, but it often can secure a strong brand presence in stores, including Walmart, which has authorized the sale of its entire portfolio.
A new look
Klavsons also gave Calypso a much-needed new look when he came on board.
“Anytime you change the feel or identity of a label or package … you never know if it will help or hurt a brand, but in this case Calypso was 18 years old at the time and it was clear that it was tired and needed a refresh,” he said.
Careful not to alienate consumers, Klavsons said King Juice kept the essence of the Calypso brand, which was ‘Taste of the Island,’ with images of ocean waves and island foliage, but it also replaced ambiguous line drawings of fruit with more realistic images that clearly depicted the main flavors inside each bottle.
It also lifted the brand name to the top of the bottle from the middle, where Klavsons said it was hard to see.
The changes made the brand “more approachable to consumers,” and as a result within months of shipping velocity increased significantly, Klavsons said.
Digital couponing drives trial, consumer engagement
Calypso further drove velocity by investing heavily in social media marketing and digital couponing to bring back consumers who had drifted away as well as introduce the brand to new ones.
“We’ve gone from less than 10,000 followers on Instagram when we started this to almost 90,000 followers now, and we did that by posting engaging content and answering everybody’s comments with another comment to make sure we were connected to the consumer,” he said.
To drive trial in a year when sampling wasn’t feasible due to coronavirus threats, Klavsons said that the brand invested in digital couponing with the launch of its Lights line, which included savings equal to a free bottle.
“You really couldn’t create sampling events that were in-person this year and this was a perfect way to get bottles in people’s hands and to get people to try a product, essentially for free, and then follow up,” Klavsons said, noting that the brand offered consumers who redeemed the first coupon additional digital coupons to drive repeat purchase and create a habit.
Looking forward into the new year, Klavsons said that expanding distribution for the brand will be a top priority – and a move that he says he hopes will be easier given the work the brand has done to raise consumer awareness, increase velocity and drive sales.
He explained that in the years before his arrival, very little was invested in Calypso to drive consumer engagement or work with retailers to boost sales. As a result, some retailers cut back on shelf space for the brand and their trust must be earned back, Klavsons said.
To do this, he hired a new executive team and is investing heavily in his sales force to tell Calypso’s story, including its strong velocity and broad appeal.
Like other aspects of Klavsons’ overall approach, this strategy is paying off with distribution gains of 10-20% across geographies, Klavsons said.
“I do believe this year is going to be a breakout year for distribution. We’ve got about 33% ACV right across the US, so there’s plenty of upside for distribution. And we’ve seen this remarkable growth across our business. It’s ubiquitous – whether it is in independents, grocery, C-stores or our international business, we’ve seen huge growth without huge lift in distribution,” and that is something retailers want to see and will want to be a part of, he added.