Cheerwine's Cherry Different' approach keeps the southern icon growing.
Cheerwine’s 89 years as a brand provides
Carolina Beverage Corp., Salisbury, N.C., with many choices of what it
wants the brand to be. Brand recognition offers consumer loyalty, but also
allows a brand to reinvent itself to reengage old consumers and entice new
audiences. Carolina Beverage enacted exactly this kind of reinvigorating
“Cheerwine is this real refreshing,
change-of-pace, gotta-have-one just-to-get-this-unique-flavor brand that
people have a really big loyalty to,” says Mark Ritchie, Carolina
Beverage president. “That’s really what has sustained us for
nearly 90 years.”
This year the company redesigned its packaging for the
first time in more than 10 years to include cherries, part of
Cheerwine’s signature flavor, and add a seal that reads “The
Original Since 1917.” In the ever-growing category of cherry-flavored
soft drinks, this was Cheerwine’s effort to stake a claim as the
original cherry-flavored soda.
“The whole industry is turning away from just
colas to flavors,” says Cliff
Ritchie, president of operations and Mark’s brother. “The only
brands that are growing in carbonated soft drinks are flavors.”
Cheerwine’s dominate flavor, wild cherry, is
blended with other flavors to create a rich, bold, complex flavor that is
coupled with a sparkling effervesce, Mark says.
“Explaining the flavor is a challenge because it
is so unique,” he says. “Cheerwine’s authenticity and
unduplication, combined with its flavor profile, make it a true ‘high
concept’ brand rather than a category redundant brand. The best way
to describe Cheerwine is that it tastes like Cheerwine.”
The soft drink does not foam like a root beer or cola;
it sparkles, the brothers say. “It’s got carbonation, but
it’s not foam, so it doesn’t give you the heavy feeling that
many foaming drinks do when you drink right out of the can or
bottle,” Mark explains. “That has led to our success and our
high index in cold bottle sales.”
Cheerwine is finding success overall. Available in
12-ounce cans, 20-ounce and 2-liter bottles, and glass bottles, Cheerwine
has been up 11 percent, 16 percent, 6 percent for the past three years,
respectively. This year sales are currently enjoying a 6 percent increase,
and the company is on pace to see a 10 percent increase by the end of the
Growth in the large, three-company dominated
soft drink category, which is flat to negative, is not easy. Carolina
Beverage meets the challenge by focusing on the value Cheerwine can bring
to its distributors, such as the strength of Cheerwine’s branding,
its unique flavor, and its aggressive funding and competitive cost to give
distributors bottom-line impact, Mark says. Carolina Beverage looks for
distributors who will partner with it, commit to its programs and fill
“Finding and creating that partnership and
commitment that we need around the brand sums up that we are a long-term
minded company,” Mark says. “It is a very big industry with
some big brands, and getting our share of voice to keep some attention
around the product is the biggest challenge we have. What we have found in
our value story is when that attention is applied, the brand responds very
The dark burgundy drink’s new “Cherry
Different” marketing campaign certainly matches the company’s
mentality. As one of the oldest continuously family-managed soft drink
brands in the United States, Carolina Beverage strives to keep that reign
running and growing.
The Ritchie’s great-grandfather Lewis D. Peeler
became a local bottler of Mint Cola in 1913 as well as an investor in the
Mint Cola Co. of Salisbury, spawned by a syrup cpmpany in Kentucky. As the
local bottler, Peeler ended up becoming the general manager of the local
syrup company too. When the Kentucky parent company went bankrupt during
World War I, Peeler decided to create a new beverage. One of the problems
during World War I was a sugar shortage, and Peeler combated the challenge
with a wild cherry flavoring that possessed a natural sweetness. He blended
the wild cherry with several other ingredients to create a new product with
a distinct red color and sparkling effervescence. “It’s where
the ‘Cheer’ part of the name came from,” Mark says. The
“wine” part of the name evolved from the beverage’s dark
burgundy red color and a trend at the time to name products by what they
Cheerwine was created in 1917, and by 1924 the
southern icon had become popular enough for the company’s name to be
changed to Cheerwine Bottling Co. Peeler died in 1931 and his son and the
current owners’ grandfather, Clifford Peeler, managed the company
from 1931 until 1992, when he turned the presidency of the bottling company
over to Cliff, who entered the business in 1976. Mark took over leadership
of Carolina Beverage Corp., the syrup arm of the business, in 1992. Both
Cheerwine Bottling Co. and Carolina Beverage
Corp. are wholly owned by descendents of Peeler.
Cheerwine Bottling Co. originally bottled in Salisbury
but then moved filling to a 150,000-square-foot bottling facility with an
additional 300,000 square feet of warehouse space in Charlotte in 1991
under the Independent Beverage Corp. name. The bottling company, which
Cliff manages, now includes 10 warehouses in both Carolinas and Georgia.
In addition to the Cheerwine brand, the bottling
company is the franchise owner for a number of Cadbury brands, including 7
UP, Canada Dry, A&W and Sunkist. Independent Beverage Corp. bottles
these brands and other contracted brands, which are distributed through the
Carolinas, Georgia and Virginia.
New consumer targeting
Carolina Beverage is focusing on growing Cheerwine in
its current distribution area and in new areas.
“In our heartland, people have consumed
Cheerwine from cradle to grave,” Mark says. “It’s a
high-share brand right here. As we move to new territories, we realize that
we need to be very efficient and try to identify the most likely new
consumer and focus our marketing efforts around that.”
Until this point, marketing has been directed just to
the mass market. Now the company is focusing on two key consumer types in
two different ways.
“We’re marketing to people who are more
interested in flavors, who are a little bit more adventuresome; people who
are a little bit tired of more mundane soft drinks,” says Tom Barbitta, vice president of marketing. “We’re
trying to get to know flavor seekers in a big way.”
Because it wants to reach flavor seekers and the fact
that the company wants to be identifiable to new consumers in the expanding
list of beverages into the cherry-flavored category, Cheerwine updated its
packaging in April. The new look incorporates cherries into the logo, which
have been missing since Cheerwine’s original packaging.
“We definitely returned to our roots of
incorporating cherries into the logo again to define the cherry
flavor,” Mark says.
As the company expands beyond its own region, it has
seen the need to define the Cheerwine flavor for flavor seekers.
“Cheerwine is not simply another cherry soda — the flavor
is very unique, Barbitta says. “As a result of other entries coming
into the cherry segment, Cheerwine benefits as awareness of the segment
grows. It’s a popular flavor category. There is a lot of momentum
around cherry, so we really felt safe in defining Cheerwine as a cherry
soft drink although it is a one-of-a-kind cherry soft drink. Our
advertising is all about being ‘Cherry Different.’”
At the same time the company updated its graphics, it
also updated its Web site as part of its plan to attract new consumers and
to target another consumer group: 18 to 24 year old males. Along with the
Web site, Cheerwine began two marketing campaigns, each involving the Web
site, to create an all-encompassing marketing experience on multiple
fronts, which the company calls “Cheerwine 360.”
The first program the company conducted this summer
was called “Random Acts of Sampling.” Cheerwine recruited
college students to roam the Carolinas in a Cheerwine-decorated van and
offer free, cold Cheerwine soft drinks wherever they found thirsty
“This sampling was about engaging consumers on
their terms,” Barbitta says. “A consumer would be at the lake,
a park or beach, when they were really needing a cold drink but
weren’t expecting one at the moment. That was really
Cheerwine’s opportunity to engage them.”
The young people the company hired for the sampling
also reported a blog on the Web site. Knowing the personality of the brand,
the young adults wrote about their tour, posted photos and posted hints of
where they might be going next.
“This was our attempt to create a true
granular/unmarketing program,” Barbitta explains. “We purposely
created this program around engagement rather than overt
Another promotion Cheerwine conducted with the use of
its Web site was Backstage VIP, a free music give-away. Since the company
updated its graphics to be more contemporary, it sought a marketing
campaign that was as relevant as its new graphics. Consumers buying
Cheerwine could go online and enter a code from under the cap or inside a
12-pack box and try and win a free song from featured musicians. The
promotion’s prize package included travel to a concert and a
backstage pass for one consumer a quarter. The promotion also gave away
free CDs and autographed guitars, and one in 10 consumers won a song.
Along with these promotions, Cheerwine’s new Web
site features a page called Idea Central. When consumers write in, the
message gets sent to Barbitta. Consumers write about Cheerwine, about the
blog or about what they may have seen during the summer.
“It gives us a chance to stay really close to
our consumers and reply to each one of them,” he says.
“It’s another advantage of our size.”
The biggest complaint — or compliment —
the company receives on its Web site is that consumers can’t find
Cheerwine where they live now.
“We are certainly seeking to partner with
distributors so we can meet that demand for people who are wanting to get
it,” Mark says. “It is a challenge to find the right partner
who is willing to do the grassroots sampling and get people introduced to
the unique taste.”
Cheerwine’s highest volume is in the Carolinas
and surrounding region. Although Cheerwine is in parts of 23 states now, it
can be a challenge to find it easily in some of those regions. “It is a matter of working with our
distributors to partner in ways to improve that and build mass,” Mark
Carolina Beverage increased distribution in the
Carolinas in the mid ‘90s when it acquired several of its
distributors to create its own bottling group. It consolidated independent
businesses throughout a large part of the Carolinas, Georgia and Virginia.
“We felt that it was very important to us to be
able to manage our own backyard,” Cliff says. “We control our
sales force and focus it on Cheerwine. We don’t have to depend on
The Ritchies think of their companies as a
three-legged stool, with each leg important to the success of Cheerwine.
“We are a brand,” Mark explains. “We are a manufacturing
company with our plant in Charlotte, and we’re also a distribution
company that not only distributes our brand, but the brands of other
companies. With this, there is a real solid business proposition for
long-term growth of the brand.”
For the brand, Cheerwine so far this year has been far
outpacing the soft drink category. “We
are growing this year in an industry that is currently still seeing
negative numbers,” Mark says.
Diet Cheerwine switched
sweeteners to be sweetened with Splenda in 2000, a move the company
believes has helped contribute to the diet version’s growth. The
company attributes Cheerwine’s overall growth to the momentum around
cherry flavors for the past five years, and its investments into the brand
to keep Cheerwine fresh.
“We think of it as 90 years young, not 90 years
old, and we operate as entrepreneurially as we can,” Mark says.
“We try never to get stale and to always think we’re in
For the distribution leg of the stool, the
company’s investments in operations have helped to build Cheerwine in
the Carolinas and the surrounding region. Because Cheerwine is the
company’s lead brand in more than half of its geography, Carolina
Beverage Corp. has perks that other brands of its size don’t have.
For instance, its fleet operation is Cheerwine identified, as are its
vending identification, coolers and menu boards and it has distribution in
fast-service restaurants. Cheerwine’s marketing promotions,
television and radio ads, and other programs are possible because the drink
is a leading brand in the region, but still would not be possible without
ownership of its distribution system in the area, Mark says.
The fact that the manufacturing leg supplies
distributors within a 300-mile radius makes it convenient for the company
to get Cheerwine on a shipment that may be full of other products that an
independent distributor is getting from the manufacturing plant.
“That helps Cheerwine grow because we’ve
made it convenient for these distributors to get it in their area for a
reasonable price,” Mark says. “Cheerwine is very competitively
priced from a supply standpoint.”
In terms of expanding distribution geography, last
year, Cheerwine entered into a distributor partnership in the Upper Midwest
with the bottling co-op WisPak Inc., which is licensed by the Pepsi-Cola
Co. to produce its brands. With just 15 months in the region, Carolina
Beverage is focused on helping its Midwest partners develop Cheerwine
demand. Cheerwine backed the launch of its 12-pack cans and 20-ounce
regular and diet versions with radio commercials, truck signage and
sampling, including having the Cheerwine van in the area to conduct Random
Acts of Sampling.
“With those partners that have participated in
our programs and done that grassroots efforts,
we have seen some very good success,” Mark says.
The other area that Carolina Beverage is committed to
is its traditional partners in the Southeast where Cheerwine continues to
grow. “It isn’t all about new geography,” Mark says.
“We’re growing right here in our heartland, and we’re
certainly very focused on Virginia and Georgia, which are the neighboring
states that are working with us.”
Cheerwine currently has 37 distributor partners,
including its own system. Covering a geography of 35 million people,
Cheerwine is in more than 20,000 accounts, which doesn’t always mean
in a highly visible way. “It’s our challenge to get into a
higher share of those accounts and increase visibility,” Mark says.
“We say that Cheerwine can be successful
anywhere in the United States,” he continues. “It doesn’t
have one particular demographic. It is as broad as any brand in the
marketplace. As a small company, we have to be very focused on how we
In the next three to five year plan, Carolina Beverage
has some very aggressive commitments and an overall mission to double its
business, Mark says. With the new packaging, new “Cherry
Different” positioning and new geography, “We’re going to
work real hard to bring that to life,” he
Beverage Industry’s November issue highlights the 100-year advocacy of the American Beverage Association and what’s next for CEO Katherine Lugar and a new plastics initiative, Every Bottle Back. This issue includes a special report on craft beer, an Up Close With feature on PRESS hard cider and what is sparking innovation in natural colors. Read more about how protein is powering up beverages and how warehouses are using WMS and WCS systems to streamline operations. As usual, the latest trends in new products, packaging and ingredients are highlighted.
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