June 1, 2007
By JENNIFER ZEGLER
Nestlé USA’s Nesquik and Juicy Juice innovate and renovate toward a healthy goal
With a trusted name and diverse portfolio, Nestlé USA’s brands captivate Americans. Nesquik and Juicy Juice are just two of Nestlé’s No. 1 positioned brands. Yet, the popularity is not stopping its beverage division from embarking on an “innovation and renovation” plan to improve its brands.
“It’s about having the best tasting and nutritionally superior beverages in the United States,” says Rob Case, president of Nestlé’s beverage division. “As a company, Nestlé believes the future of the entire company is tied to nutrition.”
Nestlé USA's beverage division oversees its flavored milk, juice, multiple coffee and coffee accoutrement products at its U.S. offices in Glendale, Calif. As with the majority of Nestlé’s brands, its Nesquik and Juicy Juice brands maintain strong positioning in the marketplace. Rob Case, president of the beverage division, explains the majority of Nestlé’s beverage brands either are No. 1 or No. 2 in the marketplace, but it’s about more than market leadership.
That vision is leading both development of new brands and makeovers of existing ones. One such example is the reformulated Nesquik powder, which now has 25 percent less sugar than its competitors.
“For the past two or three years, we’ve been going through product by product and improving the nutritional profile without compromising on taste, and in some cases, like with Nesquik powder, actually improving the taste,” Case says. “Our entire R&D infrastructure has been oriented toward products that taste great and are convenient but also have added nutritional advantages vs. the competitive set.”
As an international food and beverage company, Nestlé’s R&D can be a multinational process.
“We are ‘think global and act local’ and we do very much embrace that,” Case says.
The company keeps international contact for its global brands as well as a pulse on international markets for trends. Case explains Nestlé divides the world into three operational zones and several Strategic Business Units (SBU’s). The American beverage division mainly works with Nestlé’s Coffee and Beverages SBU and Dairy SBU. Occasionally the marketing teams meet to discuss strategies and best practices. In addition to help from Strategic Innovation Units (SIU’s), global collaboration helps brands, such as Nesquik, which are available around the world.
“Globally there are huge efforts to look across different markets. We’re always looking at what products are in different markets that we can transfer over,” explains Cathy Dean, marketing manager for Nesquik RTD.
In addition, extensive forward-looking research is done prior to a launch.
“It takes several years to develop a product,” explains Pamela Krebs, manager of division and brand affairs. “We do so much research in terms of, ‘What are the trends?,’ ‘What’s going on?,’ and ‘What do people need?’ Our R&D is really focused on being in touch with our consumers.”
Currently, the company operates with an internal focus on taste and nutrition, which is reflected in both the renovated Nesquik powder as well as the new innovations. In April, Nesquik began test marketing its new breakfast drink Quik Start in the Northwest. The product is one example of its advance research to anticipate trends and consumer demand, Dean says.
“Grab-and-go breakfasts are something that we know is growing in consumer demand, and increasingly, consumers are looking for something nutritious, not just to fill them up,” she says.
As with all Nesquik RTD products, Quik Start boasts a base of 100 percent milk that is flavored and fortified with 14 vitamins and minerals. The product is being tested in Chocolate, Cappuccino and Peach varieties. Quik Start was designed for adults and teens, specifically women who often have to eat on the go, Dean says.
Distributed only in the United States, Juicy Juice introduced Harvest Surprise in May. Harvest Surprise is a 100 percent fruit and vegetable juice blend that offers a combined two servings of fruits and vegetables in an 8-ounce serving.
Quik Start and Harvest Surprise are the newest additions to already successful portfolios. Nestlé team members insist they are just the beginning of its innovation and renovation plans.
The Nesquik brand has expanded beyond the classic chocolate powder and syrups. The addition of RTD beverages has boosted the brand’s portfolio, while maintaining its nostalgic appeal, which includes its bunny mascot.
“We’ve been doing a lot of research over the past year and a half,” says Cathy Dean, marketing manager. “What we’ve really learned is that our brand is an Americana brand. It just has that classic, ‘Don’t mess with it’ appeal.”
Though consumers are protective of the Nesquik brand, they have been responsive to line extensions. Its most popular Chocolate and Strawberry flavors are part of its successful milkshake line, as are some limited-edition options such as Chocolate Caramel Swirl. The Americana appeal also means the brand attracts beyond its youth base.
“In the end, we are a brand about childhood, but that doesn’t mean you only drink it when you’re young,” Dean says.
According to Nesquik’s research, the majority of the brand’s volume is consumed by adults. From women looking for a chocolate fix, to kids craving chocolate milk, the usage occasions are somewhat spread out. The brand’s current focus is making sure the RTD products are available whenever and wherever a consumer’s flavored milk craving kicks in, Dean says.
Its market expansion plan is one of the motivators behind its 8-ounce aseptic package, which began shipping in April. In addition to grab-and-go appeal, the package opens Nesquik to more retail and foodservice outlets, especially those in which refrigeration space is at a premium. Schools are a prime example, Dean explains.
Nesquik’s aseptic 8-ounce package was created for schools and to accommodate the myriad regulations, Dean says. “Some of them have size restrictions; some have calorie restrictions, the 8-ounce was our answer to all of those,” she explains. “We do know that there are a lot of opportunities in convenience stores, grocery stores and the club channel for that size, both aseptically and refrigerated.”
The brand also has been welcomed into Walt Disney resorts. The partnership represents a focus on nutrition for the vacation destination as well as a continuation of a longstanding relationship between Nestlé and Disney. The 8-ounce package is offered as part of the kids’ meals at Disney World, Orlando, Fla., and Disneyland, Anaheim, Calif., resorts.
“From my perspective, to be included as part of (Disney’s) transition of making themselves more health and wellness focused is great because it shows everyone’s recognition of flavored milk as a great beverage that delivers great nutrition and that kids love,” Dean says.
Nutrition is a main focus, not only for Nestlé USA, but for the American population, which presents an opportunity for a health-minded beverage such as Nesquik.
“We think now that the focus in the United States is more on nutrition, it’s the perfect time for a beverage like Nesquik that is great tasting and delivers great nutrition,” Dean says.
As evidence of its faith in Nesquik RTD, Nestlé is constructing a new facility in Anderson, Ind., for production of the brand, as well as Coffee Mate. Until the $359 million facility begins production in the spring of 2008, Nesquik will continue to be co-packed by dairies.
“[Construction of the facility] is a real testament to the support that Nestlé has for these brands,” Case explains. “It’s a huge capital investment. It’s actually the single largest capital investment we’ve ever made in the world. It is a great signal that we believe there is unlimited growth potential for Nesquik ready-to-drink and in Coffee Mate, in particular.”
The entire Nesquik RTD lineup has a hold on the market, one which Case hopes will continue.
“It’s a dominant No. 1,” Case says. “It’s a highly fragmented category, especially with RTD. What we’ve been able to do is leverage our brand, our strong emotional connection to the brand and its history. We’ve come out with interesting line extensions, like milkshakes and different flavors. We also have a whole ‘innovation and renovation’ pipeline for the next three or four years.”
Working with moms
While Nesquik appeals to both adults and children, Juicy Juice is working on appealing to moms on behalf of their children. The brand has focused its communication on helping moms understand the benefits of 100 percent juice without high fructose corn syrup.
“Our vision for Juicy Juice is to be mom’s ally in the development of a happy and healthy child, and that includes a lot more than just nutrition,” says Victoria Nuevo-Celeste, marketing manager for Juicy Juice. “It’s really developing a whole child that ultimately is a happy child. Until now, a lot of what we’ve been doing is making sure that we provide all the information to mom that we can give her so she can make the right decisions, especially when it comes to nutrition for her children.”
The communication may have worked. Case reports the brand has “enjoyed 31 straight months of share growth,” according to AC Nielsen.
Yet, the brand is not resting on its portfolio of more than 15 Juicy Juice flavors, which are available in multi-serve PET bottles as well as two age-appropriate Tetra boxes that are co-packed at Ocean Spray facilities. Juicy Juice continues to innovate with its products and marketing. In May, Harvest Surprise joined the Juicy Juice lineup. Available in three flavors, the product blends fruit and vegetable juices for one and one-third servings of fruit and two-thirds servings of vegetables in an 8-ounce glass. Nuevo-Celeste explains the product was born from consumer concerns about characteristically picky children.
“We actually talked to a mom who considers beverages as important as food in the diet, and in many cases she’s actually using beverages to make up in nutritional gaps that the child may have during the day,” she says. “So the idea came from the fact that one of the things that moms are looking for in beverages is balanced nutrition.
“[The USDA’s] My Pyramid says a child needs to eat eight servings of fruits and vegetables per day,” Nuevo-Celeste continues. “That’s almost impossible to do for an adult, imagine for a child. The idea was born to try to ‘hide’ vegetables in the fruit juice that kids love already.”
To emphasize the product’s healthfulness, Juicy Juice has taken the product on a sampling tour of farmer’s markets to attract healthy-minded parents and their children. In addition, Juicy Juice initiated a word-of-mouth campaign. The company designed a Web site where parents can take an online survey and watch a video in which a child rejects her vegetables. The survey is designed to figure out if parents will be advocates of the brand. If so, the consumer is offered a free bottle of Harvest Surprise and coupons.
“Our target was to get 10,000 consumers in a span of three months, and we were able to do that already in three weeks,” Nuevo-Celeste reports. “These are all advocates, someone who is going to pass on the word of Harvest Surprise to her friends. We understand that if you can actually find a good network of moms that would be your most valuable asset.”
Also on the brand’s Web site, harvest-surprise.com, consumers can offer testimonials about the product as well as interact with other parents.
“Depending on the topic, moms are providing tips to other moms or giving praise about the product,” Nuevo-Celeste says. “We’ve created a little community online where they are sharing ideas of how to get their kids to eat more healthfully. The whole idea is creating this network of moms who are talking to each other and helping each other. If we can facilitate that process with Juicy Juice, it’s just amazing.”
With a rapidly changing demographic of toddlers to nine-year-olds, Juicy Juice is focusing its innovation on the needs of children at different life stages. Juicy Juice’s future plans are to extend from its inherent nutritional benefits to giving children an advantage, Nuevo-Celeste explains.
“We do want to be mom’s ally, and it goes beyond only providing nutrition,” she says. “We want to develop a whole child. When we talk about a whole child, it’s from a physical, but also a developmental and social standpoint. We want to create a product that gives an edge to the child. We think of ourselves, in the future, to be an advantage that mom can give the child to have a better future. I know that sounds extremely aspirational, but the products that we’re going to develop will actually do that for the child.”
Beyond bettering children’s futures, Juicy Juice wants to change the definition of juice and juice drinks.
“We really honestly want to revolutionize the category and the way that it’s seen today – as juice as a beverage and as something refreshing – changing it to a functional benefit product,” Nuevo-Celeste says. “We’re trying to make sure that all the products that we’re coming out with are differentiated enough as to where mom would not choose any product other than Juicy Juice because there would be no substitute for what we’re launching.”
She adds that hopefully the innovation will continue Juicy Juice’s success.
“We’re going to take it up one more level and continue to have that leadership position and hopefully get rid of a few competitors at the bottom,” she says.
Keeping kids healthy
Nesquik and Juicy Juice both boast a 100 percent base in a healthful beverage. With much pressure placed on beverages in the obesity epidemic, especially in children, both brands emphasize the benefits of their bases. Juicy Juice’s new Harvest Surprise offers a combined two servings of fruits and vegetables in one 8-ounce serving, but the brand emphasizes serving size for a healthy child. Victoria Nuevo-Celeste, marketing manager for Juicy Juice, explains that the American Pediatric Association recommends younger children have only 4 to 6 ounces of 100 percent juice each day. Even those servings should sometimes be diluted for digestive reasons, she suggests.
Nesquik recently made over its powdered formulation to include 25 percent less sugar and a reportedly better taste, says Rob Case, president of Nestlé USA’s Beverage Division. In addition, he reports the brands are looking into high-intensity natural sweeteners for future products. Overall, the flavored milk beverage brand points to a Boston University study that showed kids who drink flavored milk drink less sugar and weigh less. For adults, a University of Indiana study purported that chocolate milk has the proper ratio of protein and carbohydrates for post-exercise consumption.