united beverages

United Beverages

Product Development Genius or One-hit Wonder

Flow of Presentation

• Introduction• United Beverages History• The development Team• Re-Revolutionizing the Beverage Industry• New Products: The Next United Beverages

Generation• Case Q & A

United Beverages

• Debuted the beverage industry with interactive beverage named “GandBusters”

• Interactive beverages are the Looney Tunes character beverages

• Subsequently the company expanded licensing agreements for various comic characters– The companies included Warner Bros, Disney,

Universal studios, Marvel, 20th century Fox etc.

United Beverages- Problems

• First time in five years the sales growth stalled

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Revenue (amounts in thousands)

Revenue

United Beverages- Problems

• Strategies to counter stalled sales– To develop a new carbonated drink for kids aged 9

to 12– To develop dual drink i.e. two juices packed in a

dual-chamber bottle• The top of the bottle will have a mixing chamber

History and Brand Position

United Beverages History• Paul Diaz and Charles Smith formed it in 1997

• During a joint project with sea world in Orlando, Florida, Diaz identified an untapped retail niche: interactive beverages

• After that they created Looney tunes character beverages for sale at sea world theme parks

• As the sea world project was a tremendous success then Diaz and Smith realized that interactive beverages was going to be lucrative

• In 1999 united negotiated with Warner Bros. for retail rights to produce and market the first generation of interactive beverages featuring the Scooby-Doo character then suddenly Gangbusters brand took off

• Publix signed off on as the initial Gangbusters retail partner in Florida and Scooby-Doo remarkably positive test result in the spring 2000

• Further Gangbusters won placements with other major distributing chain like Kroger and 7-eleven

United Beverages History

• Further United beverages negotiated additional licensing agreements with Warner Bros., Disney, Universal studios, Marvel comics, DC comics, 20th centaury fox, Sanrio and more.

• The Gangbusters character variety multiplied from

Scooby-Doo and power rangers in 2000 to 45 collective characters including Looney tunes, the powerful girls, Spider man, Superman, Batman, Hello kitty and more.

United Beverages History

• The nation’s second largest grocer reported that Gangbusters owned five of the ten top selling spot in their canned juice/fruit drinks

• Within months of launching in 7-Eleven stores, Gangbusters held the number-one and number-three top ten selling spots among non-carbonated beverages, outselling brands like Minute Maid, SoBe and kool-Aid burst

United Beverages History

• Gangbusters held the number 8 position out of 100 total juice drink brands on target shelves, outselling ocean spray, sunny delight, Minute maid.

• Also Gangbusters held the number 13 position out of the top-50 juice drink brands on Kroger shelves, outselling Minute maid, Hawaiian punch and Snapple

United Beverages History

The Development Team

The Development Team

Katja Von Robinson- Marketing• Market introduction strategies of “NEW PRODUCTS”• Branding approaches for existing products

Mary Smith- Marketing• Was production marketing liaison• Ensures correct products on retail shelves • Worked earlier at PepsiCo International

The Development Team

Luis Hernandez- Production & Packaging• Deep contacts with suppliers

Bill McBride- Head of Operations• Responsible for production success

Bob Jones- Industrial designer• Successful designer for “GANGBUSTERS”• Also responsible for providing ergonomic design

Interactive Beverage Industry

• United’s future

• Real innovation

• Mix of innovation & Marketing

• Concept of Dual Drinks & Flavor mixing

Second Meeting

Dual Drink

Second Meeting

• Decision making regarding the drinks.• Sales as of Year 2002

• Three Options:– Continue with GangBuster & expand– Kids Energy Drink– Dual Drink

Second Meeting

Second Meeting

Marketing guru’s research saysDual Drinks

• Market Potential 4-5 times of GangBusters.

• Slower Acceptance Rate

• 50% respondents were not sure about the idea & 25% gave +ve feedback.

Kid – Energy Drink

• Potential Market is smaller.

• Fast acceptance rate.

• 80% of respondents gave +ve feedback.

Second Meeting

Production & Packaging expert of United Beverages:

• Development cost will be high

• Commitment of all the resources for Dual Drinks

• Might lead to failure of GangBuster

Case Questions

Pros & Cons for Product

Pros Cons

Potential as much as 4X or 5X the size of GangBuster market

Market not well defined

Patent the outcome Suppliers req large quantities to give low prices

Most Innovative Huge Development Cost ($1,800,000)

Requires full Commitment

1. Dual Drink

Pros & Cons for Product

Pros Cons

Continued growth for GangBusters in target customer segment (adolescents aged 9-14)

Not a concrete idea

Cross selling opportunity due to product familiarity with GangBusters

Threat from big players in Industry

Its not a healthy drink, carbonated energy drink

yields only marginal market impact, even under the best circumstances.

2. Expanding GangBuster

Pros & Cons for Product

3. Kid-Energy Drink

Pros Cons

Easier to produce Plenty of Competition

Lowest investment Not a guranteed success but chances better than Dual Drink

Factors to be accounted:

• Feasibility of Idea• Cost• Development time• Potential Market• Competition• Benefits

Kid-Energy & Dual Drink Graph

Kid-Energy Drink

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Monthly Investment IMonthly Investment II

Dual Drink

1 2 3 4 5 6 7 8 9 10 11 120

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Monthly Investment IMonthly Investment II

Recommendation of a Project for United Beverages

Dual-Drink Project

• New & Innovative Product

• Outcome can be patented

• 4 to 5 times greater market

• In the Best Case Result, profits can be extreme

• Re-revolutionize the beverage industry

• Medium effect in case of Worse Case Scenario