However, the report noted the company will first need to reverse negative scanner trends for Rockstar and follow through on its stated commitment to increase marketing spend for its energy products. In a report on the transaction, analysts with Cowen and Company wrote that they “continue to be encouraged by PEP’s approach to the energy category,” calling the deal a “welcome expansion” of the Pepsi-Rockstar partnership that provides a “solid platform” to build upon. Rockstar’s total share of the category is now fourth, behind Red Bull, Monster, and Bang, but it is entrenched within the Pepsi system and will allow the company more flexibility to innovate throughout the energy category, which Laguarta has stated is a company goal. Rockstar’s core line fell 3.6% ($199.8 million) during the period, while sales of Rockstar Pure Zero were down 9.1% ($153.9 million). Shelf-stable energy drink sales were up 12% ($12.5 billion) through December 2019, according to IRI data. retailers in January and is rolling out sparkling water line AHA, which includes caffeinated SKUs, this spring. Coke also introduced its own branded energy drink, Coca-Cola Energy, in U.S. Recognizing the opportunities to accelerate sales and bring new consumers into the category, Pepsi’s chief rivals Coca-Cola and Keurig Dr Pepper (KDP) have already made moves within the energy set, the former through continued innovation for Monster Energy (10.1% net sales growth in Q4 2019), particularly its emphasis on performance-focused line Reign, and the latter via its distribution partnership with A-Shoc. While sales continue to increase, so has innovation, as embodied by the rise of brands such as Bang and A-Shoc and by consumer interest in ingredients like BCAAs and nootropics. Taking on a legacy brand like Rockstar, however, gives Pepsi a firm foothold in the energy category during a disruptive period in its growth. While not defined as strictly “energy” products, other brands like sparkling water Bubly and Gatorade (Bolt24) have integrated caffeine as an optional ingredient in their offerings. Through its partnership with Starbucks Coffee, Pepsi also distributes coffee energy products such as Double Shot and Triple Shot. Finally, MTN DEW AMP GameFuel is geared towards video game enthusiasts and professional players. cans, while MTN DEW Kickstart is a caffeine-added blend of juice and Mountain Dew. MTN DEW AMP offers four flavors in 16 oz. Within Pepsi’s current product portfolio, Rockstar joins a limited range of energy beverages housed under the Mountain Dew brand.
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