Line Extensions Deliver Short Term Boost

Jul 28, 2003
George Anderson

By George Anderson

Sales of Vanilla Coke are down from the brand’s introductory highs and, while
not necessarily positive news for the long haul, it does provide a lesson that
manufacturers can use to build incremental gains in the short-term.

John Sicher, editor and publisher of Beverage Digest, told the Atlanta Journal
, “It’s turning out that the carbonated line extensions, even
the big ones like Vanilla Coke and Mountain Dew Code Red, are not proving to
be sources of sustainable, year-on-year growth. They will likely level off at
lower levels than their first, full-year peaks, and become modest entries in
the companies’ brand portfolios.”

Moderator’s Comment: Does the short-term boost provided
by beverage line extensions suggest company’s should adopt an in-and-out marketing
approach to these items or should they essentially scrap extensions to focus
on core brands?

The Journal Constitution’s report suggested the experience
of Pepsi’s rollouts have been similar to Coke’s.

Pepsi spokesman Larry Jabbonsky defined the dilemma. “We’re
committed to innovation. It’s the key to ongoing growth. But we’ve got to strike
the right balance to keep our core, base businesses vibrant.”

Anderson – Moderator

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