MAINTAINING THE BUZZ

Limited editions can help restore interest in otherwise-tired beverage categories like beer and soda. Yet after seeing their mixed record with consumers, some retailers wonder if the small sales lift they bring is worth it.Dahl's Food Markets, Des Moines, Iowa, sticks to promoting traditional drinks and standard line extensions, items that are proven winners, said Ross Nixon, vice president of merchandising."We

Limited editions can help restore interest in otherwise-tired beverage categories like beer and soda. Yet after seeing their mixed record with consumers, some retailers wonder if the small sales lift they bring is worth it.

Dahl's Food Markets, Des Moines, Iowa, sticks to promoting traditional drinks and standard line extensions, items that are proven winners, said Ross Nixon, vice president of merchandising.

"We pretty much let the special flavors or new beverages speak for themselves," Nixon said. "It's such a small portion of our business that we refer to the old 80-20 rule: Take care of [the] 20% of the products that do 80% of the volume."

While Nixon believes that supermarkets can boost overall sales slightly by running their own promotions, he said it's up to manufacturers to spend the big bucks on temporary items. "Even the grandest effort on the part of a chain won't turn a poor introduction or limited edition into a viable product," he said.

Penn Traffic, Syracuse, N.Y., said inherent problems associated with short-lived products make it difficult for the chain to commit promotional dollars to them.

"Unlike a new flavor launch, limited-edition items such as Mountain Dew Pitch Black present a great promotional opportunity," said Tim Seidel, spokesman for the 109-store chain. "The difficulty comes in that limited editions often have limited availability. It is hard to guarantee that the product will be available in our store when a promotion runs."

Temporary flavors deserve a second look, however, some observers said.

"Retailers need to look at limited editions as a traffic driver, and they need short-term promotions that will help generate excitement for a trial for new products and flavors that might become permanent," said Gus Valen, chief executive officer of The Valen Group, a food and beverage consulting firm in Cincinnati. "They need to go through promotional calendars and prune out lower-value promotions in order to fit in promotions for these short life-cycle items."

Supermarkets should look at these as flavor- rather than price-based promotions, he added.

Darrell Jursa, managing partner at Liquid Intelligence, a beverage consulting firm in Chicago, offered another reason retailers should get behind limited editions. He predicted the trend toward health and wellness would spur interest in such drinks.

"Soda is very tired, with low growth rates. This, coupled with the obesity epidemic, has prompted consumers to start thinking of soft drinks as more of a treat rather than a functional beverage meant to quench thirst," Jursa said. "As a result, they'll be looking for more unique beverages that they can try occasionally as a treat, which will make limited editions more interesting."

Promoting a limited edition can be as simple as rolling in a cooler, said Greg Prince, an independent beverage consultant in Long Island, N.Y.

"It's really not that difficult to promote limited editions," he said. "A special display during Christmas with Pepsi Spice and other seasonal items like cookies is simple enough. Or, during the summer, supermarkets could have iced barrels or coolers with a limited-edition beverage for consumers to grab quickly. When something is only there for a limited time, you have to capitalize on it right away. So give it some priority."

Even supermarkets with extremely tight promotional budgets can still throw a few promotional words in the circular, he added. "It's no big deal to list Coke, Diet Coke, Sprite and all of the brands in the product line, along with a few words about the latest limited-edition flavor that will only be in stores for a few months," he said. "You don't have to spend more money. Just a few extra words in a circular would do."

The mixed record of limited editions may partly account for retailers' reluctance to embrace them.

Mountain Dew Pitch Black, Dr Pepper Vanilla and Pepsi Spice, along with seasonal flavors from brands like Oop! Juice and new berry- and citrus-flavored vodkas, have generated consumer interest in the past year.

Mountain Dew's core brand saw a 10% lift not long after temporary extension LiveWire was pulled from shelves, creating a sort of "halo effect," said Valen.

While some brewers have introduced limited-time flavors, such as Michelob's Amber Bock, Samuel Adams' Winter Classics and Coors' Winterfest, temporary soft-drink flavors are more likely to attract shoppers because they're a newer concept, Prince said.

Some ideas were downright offbeat. Jones Soda's November 2004 Holiday Pack, which it touted as a meal replacement kit, included flavors like turkey and gravy, fruitcake and green bean casserole. The company may have pushed the seasonal flavor idea too far, Price said.

Even PepsiCo took some time to get its successful approach to limited editions right, Prince said.

"A while ago, Mountain Dew came out with Code Red, which was very successful," he said. "But the novelty eventually wore off, and retailers were left with a bunch of product that wasn't selling as well. Pepsi finally decided to keep flavors like Code Red limited. So they came out with LiveWire, then Pitch Black during Halloween, and Pepsi Spice during Christmas.

"They've successfully brought back the idea of limited editions, which creates a sales boost for a while, but doesn't leave retailers with a lot of extra product once consumers lose interest."

Still, many retailers resist limited editions.

Highland Park Markets in Glastonbury, Conn., gets offers for one-time deals on beverages and items in other categories, but grocery manager Tim Cummiskey said it's not worth the effort if the product won't be coming back. Rather than create excitement, temporary flavors often frustrate consumers, he said.

"We want to have all of the latest flavors for our customers. But if we're not going to continue to have them, all we're doing is getting someone used to a product, then taking it away," Cummiskey said. "Some items, though, like Pepsi Spice, could work because if they're around every year, they might end up creating a yearning during a particular holiday."

There's another reason retailers might feel limited editions aren't in their interest. According to The Valen Group, beverage companies will most likely steal from the promotional budget to fund limited-time products.

Yet retailer support is important to future development of limited editions, Gus Valen said.

"The manufacturers are gung ho about the potential, but they're also a little concerned. Retailers need to overtly signal the manufacturers, telling them whether they're willing to get behind the short life-cycle drinks or not," he said. "They need the confidence to move forward with new product development, and retailers can show their support by putting them in their calendars."

Case Study

PepsiCo seems to have found the right formula for limited-edition soft drinks where others have failed.

In 2003, its six-month-long run of LiveWire, a bold orange version of Mountain Dew, reinvigorated the Mountain Dew trademark, boosting volume by 10%, said Gus Valen, chief executive officer of The Valen Group, Cincinnati, which analyzed the limited edition.

"They offered variety and were aware of the perceived short attention span of target consumers," Valen said. "The majority of the marketing budget was devoted to out-of-the-store promotion, such as movie theatre commercials, an Internet newsletter, and significant promotion at the Summer X-Games."

Pepsi re-released LiveWire in early 2004 to capitalize on its short-term success. It introduced two more limited editions last year: Mountain Dew Pitch Black at Halloween, and Pepsi Holiday Spice during the winter holidays.

Without specifying their impact, Pepsi said Mountain Dew Pitch Black and Pepsi Holiday Spice contributed to fourth-quarter growth in 2004, Valen said.

Overall, Mountain Dew enjoyed low single-digit growth in 2004, according to Pepsi, a factor that can be partially attributed to the excitement generated by limited editions.