Cover Story: Dr Pepper celebrates 125 years of 23 satisfying flavors
Dr Pepper may be celebrating its 125th anniversary this year, but 23 happens to be its lucky number — 23 satisfying flavors that is.
125 years ago the beverage, developed in Waco, Texas, had little more than a regional following. Today, more than 500 million cases of Dr Pepper are sold each year. During the past 20 years, Dr Pepper, owned by Dr Pepper Snapple Group (DPS), Plano, Texas, has grown U.S. volume an average of 4 percent per year, the company says. The brand now finds itself in a position of growth driven by a strong marketing push, expanding availability and a consumer preference for flavor.
Dr Pepper’s value became apparent this year during PepsiCo’s acquisition of The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) and The Coca-Cola Co.’s restructuring of its distribution network. Pepsi paid $900 million before taxes and other related fees and expenses to DPS to distribute Dr Pepper, Crush and Schweppes where the brands were distributed by PBG and PAS in the United States among other agreements. The company also finds itself in a similar dialogue with Coca-Cola.
Dr Pepper is uniquely positioned in that it is placed about evenly in both systems, says Jim Trebilcock, DPS’s executive vice president of marketing.
“As a top five drink, it is a wanted property by Coke bottlers and Pepsi bottlers, which sets up a unique opportunity in terms of value and attention,” he says. “Dr Pepper is a consumer-driven brand with a unique route to market that takes advantage of the strongest bottler in a given market.”
Dr Pepper’s consistent growth during the last 20 years has been driven by the brand’s ability to stay in tune with its consumers.
“The way we make it relevant is by staying close to our loyal Dr Pepper drinkers, but also being very keen on understanding why consumers are drinking Dr Pepper either not at all or infrequently,” Trebilcock says. “We then put together programs and messaging to be able to attract new users into the category.”
Dr Pepper also is reaching out to new consumers with new offerings, such as Dr Pepper Cherry.
“Dr Pepper Cherry was designed specifically to bring light users into the brand, and it’s done phenomenally well,” Trebilcock says.
This year, DPS has plans for a limited release of Dr Pepper Heritage, a version of Dr Pepper sweetened with sugar, and nostalgic collectors packaging in honor of its 125th anniversary also featuring Dr Pepper sweetened with sugar.
New offerings and targeted messaging go hand in hand with growing availability. Last year, Dr Pepper became the first soft drink outside of Coca-Cola products to be accepted and mandated nationally inside all McDonalds.
“There is no better way to get sampling out and raise the profile of a brand than hooking up with the largest foodservice company in the world,” Trebilcock says.
And DPS is not limiting Dr Pepper’s growth to fountain expansion in foodservice, but it is also adding new pieces of innovation at more points of distribution. “We continue to look at new channels of business,” Trebilcock says.
For instance, in the last year Dr Pepper became available in a number of dollar stores, which had been exclusive to one cola company or another, Trebilcock says.
“We’re doing really, really well in the dollar channel,” he says. “We have a long way to go with Dr Pepper to make it as universally available as Coke and Pepsi, which just speaks to the opportunity.”
Building momentum
The fun part of marketing a brand like Dr Pepper is figuring out new programs every year to stay in touch with Dr Pepper’s consumer base, the company says. From its first Super Bowl commercial to ringing the bell at the New York Stock Exchange, DPS plans to push Dr Pepper forward by connecting with consumers through events and programs for which they are passionate.
“We’ve been very consistent over the last five years,” Trebilcock says. “It’s about building frequency with our core users and then bringing in new users through our Diet Dr Pepper and through brands like Dr Pepper Cherry, addressing barriers to our usage with our light users.”
The company has increased advertisements for Dr Pepper and Diet Dr Pepper as well.
“We’re going to be spending 10 to 15 percent more behind Dr Pepper this year versus last year,” Trebilcock says. “As we do well, we are going to reinvest in our brands to drive more growth.”
The company significantly increased marketing last year behind a number of its brands, and Dr Pepper, in particular, saw growth as a result. “We know we have a great differentiated brand — a brand with high consumer passion — and the more we can make it relevant, the more we are going to sell,” Trebilcock says.
The DPS management team kicked off Dr Pepper’s anniversary on Jan. 25 by ringing the closing bell at the New York Stock Exchange. DPS’s executive leadership team was joined by the band KISS and David Naughton, who starred in one of the most famous Dr Pepper commercials of all time, “I’m a Pepper.” Naughton also sang and danced the “I’m a Pepper” song on the stock exchange floor.
Dr Pepper is continuing its “Trust Me, I’m a Dr” campaign with a new wave of “doctors,” including a branded entertainment spot featuring actor Chris Parnell as Dr. Spaceman from the television show “30 Rock.” To drive traffic in convenience stores and reach out to 12- to 24-year-old male consumers, Dr Pepper developed an under-the-cap promotion with Electronic Arts (EA), Redwood City, Calif., known for gaming. Consumers, who buy 14-, 16- and 20-ounce bottles of Dr Pepper, can download exclusive content in EA games like virtual clothes for The Sims video game or body parts for Spore virtual creatures. Consumers will receive access to exclusive add-ons for select EA titles throughout 2010 with codes found on more than 500 million Dr Pepper bottles and fountain cups.
For Diet Dr Pepper, DPS has built a campaign around the tagline “unbelievably satisfying.” The company has tied in fictional characters like the tooth fairy, an alien, Santa Claus, Sasquatch, Easter Bunny and Seamus Leprechaun chatting with Diet Dr Pepper Guy about Diet Dr Pepper’s “unbelievably satisfying” taste.
“The No. 1 thing we can do to grow Diet Dr Pepper is trial, trial, trial,” Trebilcock says. “Even though we tripled the business, we still have a lot of trial opportunities to get diet drinkers to try Diet Dr Pepper.”
DPS also is in its second year push behind Dr Pepper Cherry, and started its year of promotion with the company’s first television ad during Super Bowl XLIV. The ad featured Gene Simmons from the band KISS returning as Dr. Love, one of the “doctors” in Dr Pepper’s “Trust Me, I’m a Dr” campaign. The entire KISS lineup and KISS tribute band MINIKISS joined Simmons to describe the smooth taste of Dr Pepper Cherry, achieved with a “kiss” of cherry flavor. While other beverage companies passed on Super Bowl ads this year, DPS had the resources to take advantage of getting a good position during the game before half time, Trebilcock says.
“It just felt big enough where we could reach 100 million people with Dr Pepper Cherry, and the No. 1 thing we’ve got to do on Dr Pepper Cherry is get people to be aware of it and try the product,” he says. “It’s just a unique vehicle to be able to deliver that kind of impact with one spot, and then you follow it up with in-store execution.”
Dr Pepper Cherry was also the lead product on the brand’s 45th Annual Academy of Country Music Awards program. The company awarded winners a weekend of country music with tickets to the awards show in April, as well as passes to a special Dr Pepper Welcome Reception with the band Sugarland and the post awards ACM All-Star Jam.
The promotions continue throughout the rest of the year as well. This month, with the release of “Iron Man 2,” Dr Pepper in partnership with Marvel introduced limited-edition “Iron Man 2” packaging and began an under-the-cap and specially marked-package promotion for a chance to win Iron Man’s gadgets at drpepper.com. In addition, DPS created a commercial with comic book writer and actor Stan Lee appearing as a janitor at Iron Man Tony Stark’s house.
This fall, Dr Pepper is kicking off the college football season with a million dollar promise. A long-time supporter of college football, Dr Pepper is giving away $1 million in tuition throughout the 2010 college football season, including a chance for three lucky fans to walk away with one of the three $123,000 scholarships at the SEC Championship presented by Dr Pepper, the Dr Pepper ACC Championship and the Dr Pepper Big 12 Championship games.
Social media represents another avenue through which Dr Pepper is reaching its consumers. Dr Pepper had achieved 1 million friends on Facebook, and since the Super Bowl has reached 1.5 million.
“In the world of Facebook, that is significant,” Trebilcock says. “I think there are still huge opportunities in social media to generate authentic content that people want without trying to be a corporate marketer. … For a brand that’s 125 years old, we’re right up there with our Facebook friends.”
Reaching Hispanic consumers is another way DPS hopes to grow Dr Pepper. While carbonated soft drinks are popular with Hispanic consumers, Dr Pepper is a very underdeveloped brand in most of Latin America.
“Hispanics recognize Dr Pepper is an American icon, but their expectations of taste are different,” Trebilcock explains. “They look at it and say, ‘Ah, this is going to taste like a cola.’ So we’re spending a lot of time creating experiences that connect the two cultures together and then provide them the opportunity to repeatedly try Dr Pepper. We continue to grow our Hispanic consumer base. It’s a long-term strategy, but one that we think has tremendous growth opportunities for the next five to 10 years.”
The brand currently is running a promotion to send a winner on a trip for two to Miami to attend Univision’s Premios Juventud (Youth Awards).
‘23 satisfying flavors’
Dr Pepper expects this year to be another year of growth for the brand. In addition to its flagship lineup, DPS plans to launch the limited-edition Dr Pepper Heritage in the summer along with the nostalgic anniversary cans.
“Our challenge each and every year is to provide and create new and relevant ways of connecting either with existing properties or finding new properties to make sure we maintain our relevance and connection with consumers,” Trebilcock says.
Dr Pepper Cherry is a flavor extension positioned to be a long-term product for the brand. “It wasn’t developed just to create a flavor of the month,” Trebilcock says. “The addition of cherry was developed around what light users of Dr Pepper were telling us about why they weren’t drinking more of it, and it was around being too bold a taste for them. As you put Cherry into the product, you actually smooth the flavor out and for the light user makes it a more attractive drink.”
During the past 20 years, consumers also have shifted their consumption of carbonated soft drinks from cola to flavored options. DPS finds itself perfectly poised with Dr Pepper and the other flavored brands it offers, including 7UP, Crush and Squirt. “We’re well positioned for the American consumer who is looking for diversity of flavors and that’s really who we are,” Trebilcock says.
While some companies are concerned with the growing popularity of private label beverages, Trebilcock believes private label products are healthy competition. “They are trying to provide a value to the consumer, and I think that keeps a smart branded marketer on his or her toes,” he says.
“Dr Pepper is a unique brand, and we try to provide a unique, unrivaled experience. We’re investing in our brands in terms of advertising, innovation, graphics and partnerships. As long as we maintain that level of connectivity with the consumer, our products are of good quality, they are a great image brand to be associated with if you’re a consumer, and they drive a significant amount of business in the retail environment.”
While Dr Pepper began as a regional brand, it grew by selling a great tasting product, Trebilcock says. The company is significantly larger today, but the personality of DPS and Dr Pepper remain the same.
“We try to have a small company feel to us,” Trebilcock says. “Pretty accessible, pretty authentic and very original people work here, and we try to do things a little bit differently than our competition. I would hope that piece of the brand, that piece of the company and that piece of our culture here just continues to grow because it makes it a fun place to work, and it’s kind of unique in a very competitive industry.” BI
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