Sparkling ICE unveils $37m ad campaign, queries soda tax inconsistencies: 'It's a mess'

The 'BE NOT BLAND' campaign – developed by Seattle-based agency Wexley School for Girls – features TV ads that will run on ABC, ESPN, E!, BRAVO and Comedy Central, coupled with digital, print, and field marketing activities, Klock told FoodNavigator-USA.

“It’s triple what we’ve spent in the past… ‘The bold side of water’ [the strapline for earlier campaigns] did a good job of saying what the product is, but we’ve never done a really good job of having a brand identity, and our unaided awareness is still very low.

“We’re trying to get consumers from buying us when they see us, to being on their shopping lists, and to do that we’ve got to create an emotional attachment. With BE NOT BLAND, we have something to stand behind, a long term platform to build upon.”

Fun, refreshment and flavor variety

He added: “In the past we were doing a whole bunch of one-off campaigns... Now we have created a real brand identity, so from a field marketing standpoint we can activate all kinds of activities. Retailers are excited as well, as this gives them a call to action in terms of how to merchandise our products.”

So what – according to the campaign – is zero-calorie brand Sparkling ICE all about?

“Fun, refreshment and flavor variety,” said Klock, who said the new ad slots are quirky, but are designed to appeal to a very broad demographic. “When we started looking at who our consumers are, they’re not about leading a perfect life, or being a perfect person, but about being who they are and being true to who they are."

“In Philadelphia [where a soda tax came into force in January] and Cook County Illinois [where a soda tax comes into force in July], the tax also includes zero calorie drinks that use [non-caloric] sweeteners such as sucralose and stevia, so it’s not actually a tax on added sugars at all; it’s just a beverage tax, and I don’t think a lot of people realize that."

Kevin Klock, president and CEO, Talking Rain Beverage Co (Sparkling ICE)

Foodservice and convenience channels – huge runway, but a slow burn

So how is Sparkling ICE performing, and where are the growth opportunities domestically and overseas?

At home, the time and money spent building an independent national DSD (direct store delivery) network is beginning to pay off, said Klock, who has achieved significant penetration in grocery chains in recent years, but is now aggressively pushing into convenience and foodservice channels.

“Foodservice and convenience are massive runways for us, but it’s going a little slower than we would like. Foodsevice operators want healthier options, especially in schools, but the market is full of contracts, so you’ve got to wait for them to expire.”

In the convenience channel, meanwhile, space allocation does not reflect evolving consumer tastes, he claimed. “They are not giving the same level of space to healthier options as you’re seeing in food and mass; there’s still too much space allocated to soda and energy drinks, and it's hard for smaller firms to break through without big piles of cash.

“But things are changing. What used to drive traffic in the past no longer drives traffic today.”

International ambitions

When it came to international opportunities, Klock said he was particularly encouraged by the response to the brand in the UK, where a tax on sugary drinks will come into force in April 2018: “We’re pretty excited and see a real opportunity to grow there; we’ve proven the concept so now it’s time to pour resources into it.”

Essence of…

Talking Rain’s new ‘essence of’ sparkling waters - which were designed to attract new consumers to the Sparkling ICE brand and give existing fans more options – do present an incremental growth opportunity, but will require some consumer education, said Klock.

“We believe in it, but one of the challenges is that when some consumers grab one, they expect it to be sweet like Sparkling ICE [whereas ‘essence of’ is an unsweetened product containing only carbonated water and natural flavors], so there is some consumer education we’re having to work on.”

ADDED SUGAR: Public enemy #1?

The pressure on the food and beverage industry to cut added sugar has ratcheted up over the past couple of years, with the US Dietary Guidelines Advisory Committee (DGAC) advising  "dramatically reducing the intake of sugar-sweetened beverages", which it claimed were "consistently associated with increased risk of type 2 diabetes"; the FDA requiring that firms must list added sugars on the Nutrition Facts panel by summer 2018 [if their revenues exceed $10m]; and the World Health Organization arguing the added sugars should account for less than 10% of energy intakes - and ideally less than 5%.

Soda taxes in the US: ‘It’s a mess’

More broadly, he said, Sparkling ICE is “well positioned for when the FDA guidelines on added sugar come in [manufacturers with revenues of $10m+ will have to list added sugar on the Nutrition Facts panel from summer 2018].”

However, inconsistencies between how soda taxes are being implemented in different cities in the US is causing headaches, he claimed.

It’s not actually a tax on added sugars at all; it’s a beverage tax [in Philadelphia and Cook County]

 “In Philadelphia [where a soda tax came into force in January] and Cook County Illinois [where a soda tax comes into force in July], the tax also includes zero calorie drinks that use [non-caloric] sweeteners such as sucralose and stevia, so it’s not actually a tax on added sugars at all; it’s just a beverage tax, and I don’t think a lot of people realize that.

“In Boulder [where a soda tax will come into force in July on drinks with at least 5g added sugar per 12 fl oz], however, it only applies to sugar-sweetened beverages, so here it is going after added sugar.”

He added: “If we take the approach where we are going after added sugar, we’ll do very well, but in the US right now, there’s no consistency. As things stand, it’s a mess.”