Nostalgia sells. Since Pine and Gilmore wrote “The Experience Economy” in 1999, there has been a realization that people are willing to pay more for an experience. Acknowledging that the supply economy of the 20th century has turned into a demand economy, at least thus far into the 21st century, many marketers have made experience creation a key goal of their packaged goods firms.
Combine that knowledge with the third consecutive year of negative volume gains for the carbonated soft drink industry, and you begin to see why Dr Pepper Snapple Group (DPSG), the owner of beverage rights to A&W bottled root beer, thought it might be a grand idea to create an experiential beverage called A&W Float.
While DPSG has struggled to gain share against megaliths Coke and Pepsi — and been “demerged” from Cadbury Schweppes this year — the company manufacture many core products, such as A&W, Dr. Pepper and Snapple, that have consumer bases that love them. Using a front-end process called Discovery Innovation Group, DPSG learned an A&W Root Beer float in a bottle was one of the highest scoring ideas considered. The challenge was to create a product that lived up to the promise.
Understanding the marketplace
The idea of a carbonated beverage or juice mixed with dairy ingredients just doesn’t sound good to Americans, although the concept gets a fair amount of play in other countries. But this product that was created for “a root beer float lover who has a busy life, yet desires a simple indulgence that has a good flavor.” A product that has “bottled the flavor of an ice cream float without the hassle of preparing one.” There is a promise of “rich, creamy, one-pour preparation with a little taste of heaven” (www.floats.com).
There is a lot of pressure on the bottlers of carbonated soft drinks (CSDs). Between issues with sweeteners (sugar vs. high-fructose corn syrup vs. “artificial” sweeteners), cost of ingredients, nutrition and sustainable manufacturing, it’s a tough business right now. The numbers show that, as of July 2007, CSDs declined 3.8 percent, according to IRI and Nielsen figures. Still, it’s a huge market. Nielsen estimated the total size of the 2007 CSD U.S. market at $14.3 billion.
DPSG has been using a speed-up idea/product creation process, with some products taking just 16 weeks between concept and commercialization. While this may not have been the pathway for the A&W Float, innovative products like this combined with a drive for more rapid product and market development is certainly a message Wall Street likes to hear.
Key: The consumer might be able to engage in a beverage “treat” that is easy to make and doesn’t require ingredients that may or may not be in the refrigerator, pantry or freezer. Having something that is special and has stories and excitement behind it might just create a magic moment with the kids or the grandparents or the whole family for that “good old summertime” experience.
Insights: Delivering a product that is a conceptual/wishful idea to many people has the ability to produce purchase interest due to the hoped for excitement of an experience that may have occurred a long time ago or may just be a piece of memory never experienced.
According to our It's Convenient!, Crave It!, Drink It! and Healthy You! insights, the key attributes for an indulgent treat are: taste, creaminess (taste and texture) and packaging that supports the indulgence.
DPSG took those insights, combined them with heritage and nostalgia and came up with a beverage world comfort food: the ice cream float.
The key trends impacting this market are convenience, indulgence, premiumness and healthfulness.
Convenience: Manufacturers are responding to consumers’ hectic lifestyles by creating more convenient products. If part of the convenience comes from the packaging, this is a bonus. Going to an A&W outlet can be a family tradition. But maybe there is no longer a “stand” near the miniature golf course. So keep a four-pack of these in the pantry, toss a few glasses in the freezer and wow — make a small, affordable event for the kids or grandkids.
Indulgence: Pleasure is important in this busy world. We have seen many products focused on healthy aspects, but the pleasure of an indulgent treat is still a strong behavior. Consumers use carbonated drinks and ice cream for enjoyment, moods and sometimes to deal with the stress and chaos in their world. Creating analogs of craveable foods allows consumers to have a luscious taste experience and to satisfy a craving for the moment.
Premiumness: Premiumness in beverages comes from the taste, package and venue one can purchase the drink. Combining nostalgia, ingredients, package, brand and situation — unique for this product — one can hope to cue premiumness.
Healthfulness: An overall industry focus on trying to help consumers reduce obesity combined with consumer behavior for treats equates to the need to provide beverages that are healthier. Now this is a stretch, but shaving 15-20 percent of the calories off of a self-made or soda shop version of a float and making it portion-controlled are steps in the healthful direction.
There are two flavors of this product available. In addition to the Root Beer Float we are analyzing, DPSG offers a Sunkist Orange Float. Both are available in a four pack at a fairly high register ring of $4.99. A single bottle at the convenience store is $1.69.
The four pack carrier has a lot of interesting messaging: “A bottle on the outside. A float on the inside,” and “A creamy blend of rich A&W and ice cream flavor.” The back of the package has directions for the “Perfect Float Experience” — three circles describe how you need to “twist it around,” “pour upside down” and then “foam it up.” It also suggests you can “pour in a glass for a foamy float experience or enjoy straight from the bottle.”