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Caleb Kola Seeks Craft Positioning to Win Back Millennials

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With Caleb Kola, PepsiCo has added yet another carbonated beverage brand to a list of new products that includes energy/juice blend Mtn Dew Kickstarter, Mtn Dew Baja Blast, Real Sugar Pepsi, and the stevia sweetened Pepsi True. Carbonates, particularly of the cola variety, have been in strong decline across the US in recent years. While the launch of this “craft” soda will do little to return the nation to its previous sugar highs, the concept is a smart one, despite some skepticism from the press. Writing for Quartz, Svati Kirsten Narula says,

With the launch of Caleb’s Kola, a “craft” soda named for the founder of Pepsi, Caleb Bradham, and modeled after his original 1893 formula, Pepsi is showing investors that it’s not giving up on the soda business any time soon. Pepsi isn’t oblivious to the fact that a growing number of Americans, especially those picky twenty-somethings that seem to be throwing the whole consumer goods industry for a loop, just don’t want to drink conventional soda. So it’s capitalizing on the popularity of all things artisanal—from craft beer to handmade soap—and betting on this: People still love sugary soft drinks. – “How Pepsi hopes to get millennials to drink carbonated sugar water again”

Quartz goes on to describe how Caleb Kola’s use of a “trendy blue label” on a “classic glass bottle” seeks to emulate the authenticity that millennials crave, but warns that its list of ingredients are deceptive:

Well, actually, the ingredients list isn’t that short. Though the marketing materials emphasize a simple trio of sparkling water, fair trade cane sugar, and kola nut extract (augmented with spices and citrus oil), the full list includes caramel color, caffeine, and additives such as gum arabic.

Are those ingredients “better” than the ones in regular Pepsi? Arguably, yes, if you’re trying to steer clear of high-fructose corn syrup and you like the idea of fair trade sugar. But don’t be fooled into thinking that there’s a meaningful difference between “sparkling water,” the first listed ingredient in Caleb’s Kola, and the carbonated water in Pepsi. That said, a 10-ounce bottle of Caleb’s Kola has 29 grams of sugar and 110 calories, while a 12-ounce can of Pepsi has 41 grams of sugar and 150 calories.

Despite these caveats, Pepsi’s decision to launch this product has strong potential to succeed, if executed properly. Despite throwing millions of dollars in advertising campaigns with celebrities like Beyoncé and Sofia Vergara, it has been quite some time since brands like Coca-Cola and Pepsi have been thought of as “cool”. Focusing on the artisanal attributes of this brand, and packaging it in glass bottles without the “corporate” logo, will more than likely not result in a sudden carbonate boom – but it can at least appeal to the lapsed consumer that wants to occasionally indulge in a sweet beverage – at a premium price.

The proliferation of beverage choices available to consumers seemingly grows on a daily basis. From energy drinks to teas to juices to sodas, the days of a single brand soft drink acting as a consumer staple are numbered. But with Caleb Kola, Pepsi at least re-inserts itself into the equation. So while soda volumes may never return to their previous highs, gaining a dollar or two on an “artisanal” product is at least worth exploring.

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