According to data from the US market analysts, Beverage Digest, two recent successful new product launches in the US soft drinks sector, Mountain Dew Code Red and Vanilla Coke, have suffered a decline in sales after initially successful launch periods.
In the first quarter of 2003, Mountain Dew Code Red’s sales volumes fell by more than 40% in supermarkets and convenience stores, while Vanilla Coke’s market share declined by 30% in convenience stores between October and March.
However, in a report in today’s Atlanta Journal-Constitution, both companies defended their products. Jeff Herbert, senior vice president for Coca-Cola trademark brands, said the sales were in fact ahead of its expectations. “After the initial trial period, our repeat rates are much higher than we would expect,” he said.
Meanwhile Bart Casabona, a spokesman for Pepsi, was quoted as saying that sales of Mountain Dew Code Red were in line with expectations. He said: “We’re still very pleased with Code Red.”
While it is usual for brands to enjoy a “honeymoon” period after launch fuelled by high levels of trial before settling back into a more stable pattern, some analysts have been surprised by the extent of the declines in certain channels, underlining the tough conditions prevailing in the US soft drinks sector.
The tough environment is of course the prime catalyst for a rash of new line extension launches being seen in the US, of which Code Red and Vanilla Coke are among the most notable and highest profile.
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By GlobalData
