Cool New Product: McCormick Recipe Inspirations

So I'm the farthest thing from what you'd call a chef or even in a novice in the kitchen, but in a recent shopping trip at my local grocery store I came across McCormick Recipe Inspirations - a line of convenient spice kits that built around sophisticated (at least for a non-cooker) recipes. Recipe Inspirations gives you McCormick’s recipes with each packet including the pre-measured amount of spices and herbs.

The product hits dead on the convenience trends for the consumer, and of course McCormick and the retailer win big because the price per ounce is considerably higher than if a consumer was just buying the regular spice jars.  In reality, it probably also attracts a consumer who typically wouldn't even buy all the traditional spice jars because they are less cooking involved or at least serves as a sampler pack of sorts.  My only knock is it shouldn't be shelved in the spice aisle, it would be the perfect product to place over by the chicken, meat, and fish departments.

Is Pepsi the "next generation" of yogurt?

Early this week Pepsi announced it is entering the Yogurt market via a joint venture partnership with German dairy company Theo Müller.  The joint venture will be run as the Müller Quaker Dairy and called Müller by Quaker and will begin by being sold in the northeast US.  It appears that they will offer at least 3 different types of yogurt: conventional, Greek, and Fruit Up (fruit mousse in top of the yogurt that gets stirred in).  The yogurt will be packaged in a square contained with one corner filled with an ingredient that the consumer can mix in; including caramelized almonds, tiny chocolate-covered crunch balls and granola.

Pepsi, which in addition to its traditional beverage business also owns Quaker, Gatorade, Tropicana, and Frito-Lay, is looking to diversify its portfolio as the soda category continues to be squeezed by health trends and the company looks to jump start long-term growth.


Why Yogurt?
Yogurt offers Pepsi three advantages.  First, its a fast growing category (+9%) that outpaces traditional grocery categories as its alined with consumer health an wellness tailwinds.  Second, it gets Pepsi into a new section of the store - the dairy aisle.  And third, Pepsi could likely leverage its refrigerated Tropicana DSD network to capture significant cost scale.


Will it be successful?  
Pepsi research suggests that Americans consume ~12 pounds of yogurt a year, which is half as much as Canadians and only a third the amount of Europeans.  Pepsi attributes this gap to the US category offerings being boring vs. international offerings: “It’s been an ‘I gotta have it because it’s good for me’ kind of a product . . .The 'wanna have it' was missing” according to Dr. Mehmood Khan, who oversees PepsiCo’s global research and development and was interviewed in a recent New York Times article. According to that article, Müller by Quaker will fill the current product offering void by offering a a new variety yogurt with its own unique texture that is between Greek and conventional yogurts.  The product will be marketed under the tagline "European for Yummy".  


While General Mills (Yoplait) and Dannon make up 50% of category sales, much of the recent category growth has been driven by Greek yogurt brands Fage and Chobani.  The fact that these smaller brands have gained traction and shelf space would suggest a brand backed by a CPG manufacturer with the clout and deep pockets of Pepsi would also be able to muscle its way into the category assuming the product is truly differentiated and delicious.  It also wouldn't be surprising to see Pepsi bring its soda strategy to life in this category by supporting the brand launch with an enormous advertising budget as well as running a significant amount of promotions focuses on BOGO's and bulk discounts.  The yogurt category has seen plenty of innovation over the past several years and I believe many category consumers are willing to experiment with new brands and flavors, but the category will remain highly competitive and unlike soda its wont just be a two horse race.


In conclusion, I believe Pepsi can clearly make a splash in the category and will help fuel overall growth.  However, I have a hard time believing the brand will climb higher than a #4 share behind Dannon, Yoplait, and Private Label, and may even have a hard time in the short-term outselling some of the hot Greek Yogurt brands.  One could see the brand, perhaps, ultimately reaching a 10-15% market share over the next 3 years.

What Apple can teach marketers

Everybody recognizes Apple advertisements as some of the best in the business.  They grab your attention, they're distinct, and they entertain.  But more importantly, they flat out are some of the most persuasive ads you will ever see.  That's because Apple has the best product demos in their TV advertisements of any company out there, by far, hands down.  Nobody is better at taking a complex new technology and making it look both simple and relevant to everyday life.

The first 4 iPhone Ads:


A few iPad Ads:



The ads communicate one simple clear product benefit and then leverages a series of product demos as reasons to believe in the benefit.  The art of the product demo is in the story telling as the ads always show the product doing tasks that you'd never imagine phones or computers could do, yet doing them in such a simple fashion that it leaves the viewer wanting more.

Now the reality is that the advertisements are based on the same consumer insight as the brilliant product design - make it so simple a 3 year old can understand it.  It sounds crazy to design the latest technology with a 3 year old in mind, but Apple's on to something in making products so intuitive (If you've ever seen a 2 or 3 year old pick up an ipad and just start entertaining themselves its mesmerizing).  Too often consumer goods manufacturers try to over engineer products, when the majority of consumers will chose the simple option nearly every time.  To Apple's credit they've unlocked this better than anybody else both in their product design and advertising.

Without a doubt the discipline Apple displays in its advertisements to not only keep them simple and relevant, but more importantly staying true to the product's primary benefit deliver a persuasive sales pitch.

What Gatorade Got Wrong...

If you read my lost post, I praised Gatorade's launch of G Series as an initiative with very strong business building potential because it helped reduce consumer confusion and increasing the brand's shelf presence. This post, however, takes a harsher stance on Gatorade's push to take their brand re-stage one step farther by also launching a premium priced line-up "G Series Pro". http://www.gatorade.com/default.aspx#gseriespro?s=gseriespro

G Series Pro is marketed as:

"Only available in pro locker rooms... until now. Originally developed
exclusively for pro athletes and grounded in years of hydration and sports
nutrition research at the Gatorade Sports Institute (GSSI)."

Now I get where Gatorade is coming from...trade in/across with G Series and then leverage G Series Pro to trade consumers up and capture a piece of the higher margin speciality market. I'm sure the consumer research shows very clear and distinct consumer segments that they believe they can better target with two line-ups.

That said, I think the positioning of the premium line-up has serious flaws that risk undermining the entire brand. By positioning G Series Pro as the line-up for pro athletes - where does that leave the base G Series line? Wasn't Gatorade's entire image built off of the fact that this is what the real pro's drank?

Recall the TV ads Gatorade built it's entire equity such as "I want to be like Mike ad". http://www.youtube.com/watch?v=b0AGiq9j_Ak

Well, evidently real athletes don't drink Gatorade anymore they only drink G Series Pro. Actually, what Gatorade is saying is real athletes haven't drank regular Gatorade for quite sometime. It may be good enough for you and me, but it's not good enough for real pro athletes anymore.

At the heart of Gatorade's flaw is that by lifting up the "Pro" line, they are degrading the base line - which is worrisome because it's always going to be the bulk of their business. Critics will say it's only on sale (at least for the time-being) exclusively at GNC (because evidently that's where 'real' athletes shop) and it will be marketed towards a small, specific niche, so it shouldn't interfere with the base line.

Maybe I'm being too tough, but it's not too often you see a business knock itself off the top of a mountain. To me, Gatorade or G Series or whatever they want to call the base business has lost some of it's magic, lost some of it's flair, and it's on the verge of being just another generic sports drink ala Powerade.

Gibberish Grade = D.

What Gatorade Got Right...

Recently Gatorade has been investing big behind the launch of G Series under their "The Game Has Evolved" campaign. G Series is the commercialization of a 3 step drink regime program established to maximize the performance of athletes by helping athletes (1) "Prime" before their competition, (2) "Perform" during the competition, and (3) "Recover" after. Each of the 3 types of drinks is suppose to be specially engineered to contribute as advertised.

http://www.gatorade.com/default.aspx#gseries?s=gseries

Now the instant reaction to watching this campaign is natural skepticism. Isn't Gatorade getting a little greedy here? Shouldn't they just be happy if athletes buy 1 Gatorade? Does Gatorade really expect us to believe if we drink all three we will actually see a noticeably better result? Is this all just marketing gibberish?


However, taking a step back the move is brilliant on a couple of accounts - regardless of if consumers buy into the regime push or not. The move instantly has two enormous benefits to Gatorade.


First, from a consumer perspective, it helps add clarity to what had become an increasingly difficult brand to understand. For years Gatorade's growth strategy had been to launch new line extensions to drive trial. However, all these line extensions, from a consumer standpoint had become very confusing, difficult to differentiate, and ultimately navigate when they got to shelf.


Second, from a trade perspective, it's a classic shelf grab tactic. By spending millions of dollars in advertising of the regime program Gatorade's retail partners are forced to dedicate more of their shelf space to bring the 3 step program to life. Even a few extra distribution slots at retailers and convenience stores around the country will translate to millions and million of dollars. This shelf space push is even more important following the collapse of Gatorade's Tiger Woods line extension.


So, regardless of whether or not consumers buy into the concept of a drink regime, or not; G Series will be a win for Gatorade.