just the Answer - GlaxoSmithKline category controller, Mark Sterratt
This month, just-drinks spoke with GlaxoSmithKline's category controller Mark Sterratt
In this month's just the Answer, we talk to Mark Sterratt, category controller at the owner of the Lucozade and Ribena soft drink brands, GSK.
just-drinks: The energy drinks category has come in for a lot of criticism lately for health reasons. With the movement towards healthier drinks growing stronger,is there scope within GSK's portfolio for healthier, more natural energy drinks?
Mark Sterratt: I think it helps that as a trend it [health] has been around for quite some time now and the key thing that we recognise from talking to consumers is that health means very different things to different people. One person might think that natural is healthy and another person might think that natural might be highly-calorific for example. Smoothies are a great example of that. Some of them can have a high calorie content but they are seen as healthy because they are natural. So, trying to meet the different health needs for different consumer groups is what we endeavour to do. The launch of our [Lucozade] Lite range is a step in that direction. We will continue to look to identify any opportunities and growth areas within health and adapt those to our products. We are always looking at new trends and it helps that these are trends we are very aware of.
j-d: On the subject of health, last year, GSK said that it was aiming to meet guidelines set by the UK's food safety body by removing the colouring Sunset Yellow in Lucozade Energy. Is this something you are still working on?
MS: We're looking at all of our ingredients … . It is about delivering a good product to the consumer. It is only [Lucozade] Original that has Sunset Yellow in it and we are aware of the negative connotations of Sunset Yellow and that they haven't actually been proven. But, we are working with the regulatory authorities and our trade partners to come up with a solution that meets all the regulations but that also delivers a really good product to the consumer. Our ambition with all of our products is to optimise the taste for our consumers and we work very closely with our teams to develop taste and to ensure that our products are meeting expectations.
j-d: You launched a brand extension of Ribena last year - Juiced-Up. How has this performed?
MS: We are happy with its performance. It is a product that isn't mass market and it is certainly not as big as some of our other brands. We will always look at our products and see where else in the market can we can drive it and what other opportunities we can realise with Juiced-Up. We are pretty happy with how [the launch] has gone and we are looking at future opportunities for it.
Mark Sterratt, category controller at GSK
j-d: You launched Lucozade Alert Plus in 2009 and Suzy Smith [Lucozade marketing director] touched on its performance at the GSK Live event last year. She said the launch had not met expectations. What do you think were the reasons for this?
MS: We did have very high expectations for the shots category. We obviously looked at the US market where the shots category is doing well, so we were expecting that to happen in the UK. We still expect the shot category to be a big category in the UK. It might just take a bit longer than we were expecting. Although we did have high expectations (for Alert Plus), it did deliver high incremental sales and, based on the US experience, we believe that the UK is actually tracking quite well against the US market and over the next couple of years we expect some great things from the shots category.
j-d: You obviously see the potential in the shot category then and are willing to pursue this?
MS: Yes definitely.
j-d: So, would you consider launching into any other new sub-categories this year?
MS: We know that we can touch a lot of consumers with Lucozade. We talked at the GSK Live event last month about shots and that is a new category that we are exploring. So, yes I think we will always look to explore new opportunities, based on new trends. With shots and Juiced-Up, they were both opportunities that we thought were viable. I am pretty sure that we will be looking for new opportunities.
j-d: Are you seeing any innovation or new trends coming through in soft drinks this year that you might focus on?
MS: Working in the soft drinks industry, we've talked a lot about the trends around value, which I think will remain important to consumers this year. Obviously, big brands and the excitement those can create, that will remain important as we touch on health. This is a key trend that is consistently changing every year and something we are constantly looking into.
j-d: Last June, GSK said it had plans to launch its Lucozade energy drink in the US. There have been no announcements since. Is this on hold, and if so, what are your reason for not yet launching in the US?
MS: We have got some really exciting globalisation plans and we are looking to launch our brands into new markets all the time - we're actively looking at China, Brazil, Mexico and India; they're all big markets that we're looking to launch into. The US is on that list, we haven't yet and it's something that we're continually evaluating. When we feel the time is right, we will definitely have a think about what the opportunities are in the US. But for us, it's not just about the US, we do believe that our brands can be globalised and I think this is a really exciting step towards globalising our brands in absolutely massive markets.
j-d: Are we likely to see any announcements this year?
MS: I think it will probably be awkward for me to speculate on that at this stage but I would say watch this space on that one.
j-d: If and when GSK does launch Lucozade in the US, how do you think the brand will fare against the likes of Powerade and Gatorade?
MS: In the UK obviously, Lucozade is the number one energy brand. Powerade and Gatorade in the UK are smaller brands and, if and when we enter the US, that would be different because Powerade and Gatorade are already established there. What we're looking at … in other markets where Lucozade does have a role to play, consumers do like it and we believe in the proposition that brings. So, if and when we do launch in the US, we are hopeful that we can make a success of it. Any new launch in a new country is going to have competition and we look at the US as no different.
j-d: Danone, Coca-Cola and PepsiCo have all pointed to commodity headwinds as causing potential problems in 2011. Is this something that GSK is also noticing and what effect might it have on the business?
MS: Commodity costs will, of course, have an effect on our business. PET will be affected by oil prices and it is something that we are aware of, but we have a strategy in place to try to mitigate that. Unfortunately, it is something that we have to cope with and hopefully we will cope with it well.
It's crystal ball time for Ray Rowlands from DrinksInfo. This month, Ray takes a guess at what future trends in soft drinks and water will shape the categories in the months and years to come....
This month, Richard Corbett heads east and considers the potential - and the pitfalls - that China has for the soft drinks and water producers of the West....
Danone is rumoured to be considering a sale of its bottled water business, but figures show that the unit continues to contribute a significant proportion of group sales....
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