Analysis - Dr Pepper Snapple Group campaign can't hide Ten cracks
DPSG launched the Ten range in 2011
Dr Pepper Snapple Group's (DPSG) upcoming multi-million dollar push behind its Ten portfolio is unlikely to address concerns over cannibalisation and lack of consumer appeal, an analyst has warned.
Bernstein said in a note today (15 May) that the low-calorie range, which will take the majority of DPSG's Q2 US$30m marketing spend, can deliver “modest improvements” in the group's volumes. However, “we question the platform's ability to drive meaningful and sustained incrementality,” the analyst said.
Shelf-space gains will likely come at the expense of existing DPSG brands, while the “fragmented nature” of DPSG's distribution network will hamper Ten's reach, Bernstein said.
“Finally, we believe the jury is still out on whether or not Ten has the inherent staying power, in terms of consumer appeal, to warrant a permanent place alongside regular and diet in DPSG's CSD portfolio,” it added.
DPSG launched Dr Pepper Ten in October 2011, with 7UP Ten, A&W Ten Root Beer, Sunkist Ten Orange Soda, Canada Dry Ten Ginger Ale, and RC Ten Cola following in December last year. The drinks contain ten calories per bottle and use a mix of caloric and non-caloric sweeteners.
Bernstein said the Ten range accounts for about 4% of DPSG's core CSD volumes in the US - excluding convenience, gas, and food service - and about 3% of sales.
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