Knowledge, quality and marketing support provide the keys to developing strong beverage brands in emerging markets
Economic statistics and global demographics tell much of the story: for food and beverage entrepreneurs seeking to penetrate new markets, emerging economies hold the greatest opportunities.
As opposed to more established markets, such as the US and Western Europe, nations with a growing middle class and new wealth are less saturated with different brands, creating a need and demand for new products.
According to the Organization for Economic Co-Operation and Development, the world’s middle class will reach nearly 5bn by 2030. While most of this new wealth will be found in Asian countries, investors are also eyeing burgeoning middle class wealth in Africa and Latin America. There are enormous economic ramifications from this development, not the least of which include significant opportunities for beverage entrepreneurs.
As the numbers of middle class consumers in emerging economies rise, so too does the desire for new drinks flavours and blends that reflect the varieties found in North America and Western Europe. “This new middle class tends to aspire to Western brands, which for decades have been held in high regard as synonymous with prosperity and style,” says Moshy Cohen, Royal Crown Cola International’s vice-president of marketing. “At the same time, they also want new and unique taste sensations that reflect local customs and culture.”
So, how do entrepreneurs tap into this demand for new beverages? Cohen explains that the following four factors are critical to their success: industry knowledge and technical expertise, a commitment to quality, strong marketing support and a focus on consumer tastes.
1. Learning from industry leaders
The global beverage industry has been in existence for over 100 years, and through many decades brand leaders – those that have become household names – have accumulated significant expertise in marketing new products. Established and start-up bottling franchises all over the world looking to bring a new product to market can leverage these brand leaders’ expertise and apply important lessons already learned to their own operations and marketing strategies.
He emphasizes that established and successful brands have amassed consumer loyalty through strong quality control and product consistency. “Start-up companies with leaner resources and manpower should partner with them to get a head start in securing sales channels, and to ensure that quality does not suffer.”
Trusted international brands can also offer technical expertise, including a qualified research and development staff, to test and develop new beverage products, and conduct regular testing of concentrates and ingredients. According to Cohen, a strong research team is charged with staying ahead of changing consumer tastes by testing different ingredients and combinations.
“This leads to the creation of new beverage formulations that can augment a franchise’s existing beverage portfolio and strengthen its branding and consumer reach.
“In addition, global beverage companies that are well-established understand the complexities of test-marketing new flavours and introducing them into different regions. A brand that has successfully marketed a new product in Brazil, for example, would be a good partner to have when introducing new products in, say, Ghana, or Vietnam.”
2. Focusing on quality
Developing beverage brands in emerging economies is a rich opportunity, but one fraught with significant challenges. Cohen says that the right partner can help start-ups manage supply chain logistics that are often encountered early as manufacturers get off the ground.
“Another example of this support is providing guidance on water treatment. In many countries, securing safe and reliable water supplies is a primary challenge, and an absolute necessity for manufacturing beverages. Proper training and ongoing monitoring of water samples, as well as expertise on water conservation can help growing companies manufacture more with less.
“Besides logistics, the most important aspect of manufacturing is ensuring a qualified and quality-minded workforce. In emerging markets finding employees is generally not a problem; the challenges arise in keeping your workforce properly trained,” he states. “Guidance on proper training programmes is critical. Employees need to understand how to identify defects throughout the manufacturing process. Training should stress the need to remove sources of variability as a means for improving production. In this way proper training helps reduce overall operational costs and boosts productivity.”
3. Leveraging marketing experience
An experienced partner can also help franchises execute a well thought-out marketing strategy for a brand entering a new market. Cohen explains that this should include help in defining target audiences, establishing goals, setting pricing that is competitive and, finally, putting together an effective advertising strategy.
“Both existing beverage brands and those that are new to a particular region require an integrated sales strategy that leverages multiple media platforms – from traditional print to social media campaigns that engage consumers one-on-one,” he says. “Global leaders offer years of experience in running campaigns that can be tracked for their return on investment, including plug-and-play television campaigns, radio and print ads, and point-of-purchase tools. Working with an experienced partner can facilitate the development and execution of a strategy to raise a brand’s profile and capture market share cost-effectively.”
4. Putting the consumer first
Rising wealth in emerging markets is creating great opportunities to develop diverse new soft drinks that reflect uniquely different tastes and styles. Ultimately, however, Cohen stresses that no matter how mature or new the market, launching a new beverage brand requires a dedicated focus on the consumer as well as a long term marketing strategy.
“Building a solid brand with lasting appeal requires dedication and careful navigation, and an experienced partner can provide a bridge to the new frontier. Brand building depends on earning customer loyalty. An experienced partner can provide entrepreneurs with the knowledge and tools required to embark successfully on the new marketing opportunities that lie before them.”
• Royal Crown Cola International’s (RCCI’s) flagship brand RC® Cola, one of America’s original colas and a leading brand for 107 years, is joined by the fresh and fruity flavours of RCQ®; the crisp lemon-lime taste of Upper 10®; the naturally delicious juices of Chadwick Bay™; the refreshing energy blend of Cott Rain®; and the thirst-quenching mixers of Ben Shaws®. RCCI is a division of Cott Beverages, a subsidiary of Cott Corporation, and its products are available in more than 60 countries through a global network of bottlers and distributors.