It was a year ago when London-based beverage brand, Ugly Drinks, initiated plans to expand into the United States. And it’s off to a solid start, with reports of a “strong early retail foothold” and “a thriving e-commerce business.” With its sights on millennials and Gen Z, the company is experiencing global year-over-year growth of 300 percent. Its future in the U.S., like that in the U.K., is bright, despite the odds. The company knows how to launch a product in a new market, as well as an existing one.
The year 2016 saw almost 21,500 new food and beverage products introduced in the U.S. market, per the USDA. Of these, 21 percent would claim to contain nothing artificial, while 30 percent cited lack of some other not-so-healthy ingredient. The beverage category continues to be the most popular category in which to launch products. All of this puts Ugly Drinks at a disadvantage from the get-go, compounded by the fact that 49 percent or more new consumer goods will fail.
Ugly Drinks is a sparkling water, void of calories, sugar, and all things artificial, like many of its competitors. Three of which hold almost 45 percent of $2.45 billion in industry sales. And, while Ugly Drinks has yet to make the top 20 list of brands for its U.S. sales, its ability to seize “shelf space in independent and natural channel accounts” doesn’t go unnoticed. So what makes it different from other newcomers to the market? It’s important to first understand the reasons new consumer goods don’t survive.
Many may believe that failure is most often specific to a product. A Business Journal article cites other possible reasons, including a lack of consumer research to support product design, no need for the product, or flawed pricing. Yet, its author says the problem most often seen is “lack of rigor behind sales and marketing planning and execution.”
Founded in 2016, Ugly Drinks pioneered U.K.’s sparkling water industry. Since then, it’s become the country’s best-selling brand, having sold five million cans and recently grabbing 5,000 new stocking points. It’s easy to see the company has a winning strategy for how to launch a product in a new market – the U.K., which has lent expertise for how to launch a product in an existing one – the U.S. And with its funding, the brand is ensuring staying power by avoiding companies’ biggest mistake: it is “doubling down on marketing.”
Here are five tips we can take from Ugly Drinks in terms of marketing strategy to ensure continued success.
Whether defined by geography or demographics, markets have distinct differences. Marketing is only effective through deep understanding of a target customer’s intentions, behaviors, and needs. For example, Ugly Drinks defines its customers as “GenZenials”. These are a mixture of Gen Z and millennials, with a heightened focus on ages 16 to 24. Within this market, the brand seeks out GenZenials “who are socially engaged” and “a bit rebellious,” but in a positive way. When targeting consumers, being specific and detailed allows brands to find them and plan initiatives that will resonate.
When marketing to Gen Z, brands should know that the majority (34 percent) prefers social media over email. Ugly Drinks likely knew this statistic when deciding how to launch the product in a new market because it led “with a digital-first mindset” in both countries. This meant the company sought to build an online brand, using a social media marketing strategy. And, it was one that proved effective in reaching GenZenials.
Its direct-to-consumer approach is said to have allowed for the testing of new products direct with consumers. In doing so, brands enjoy a “greater level of interaction with consumers.” Feedback is then passed on to retailers to help guide them in their purchase of Ugly Drinks. This “huge amount of data” helps Ugly Drinks make its own consumer-driven, informed decisions.
For Gen Z, choosing a company from which to purchase a product can be more complex than with other generations. In fact, 44 percent would be interested in submitting ideas for product designs. They want involvement and a relationship with brands, not just products. Like millennials, they also expect brands to make “positive social impact” with cause marketing initiatives.
For example, Ugly Drinks puts efforts to tackling gender inequality by donating one cent from every can sold to United Nations Foundation charity, Girl Up. When another U.K. brand, Soap & Glory, sought to bring its beauty products to the U.S. market, it announced its support of Washington, D.C. based non-profit, She Should Run. As part of its “More Than Lips” campaign, it donated $5 to the organization that seeks to empower women to run for office each time a post was shared with the campaign hashtag, showing support of its target audience.
Even as brands make new decisions based on consumer intel, it’s important to stay true to the brand’s values. An Adweek article tells that brands “unwilling to commit to a set of values risk losing consumers.” These values draw consumers to your brand and fosters loyalty.
In adding a product offering – a caffeinated sparkling water – to widen its appeal to the U.S. market, Ugly Drinks won’t sway from its message. This is no matter the country or no matter the product. The brand will remain, in any case, a “fun, exciting, healthy alternative to soda.” It understands the need for authenticity when building a consumer engagement strategy.
While it’s important to stay true to the brand, it’s just as important to recognize differences across markets. Ugly Drinks CEO explains that the company “always developed and refined the brand with a global market and a U.S. launch in mind.” In doing so, it established North American operations and took time “to understand the local nuances.” It also partnered with a complementary brand within the U.S. to gain insight on how to be authentic at the local level.
For brands pursuing Gen Z, interactions must be meaningful. Because 38 percent of Gen Z “would attend an event sponsored by a brand,” many companies find event and experiential marketing the best strategy to facilitate these interactions. Using the right, locally-sourced people to personify the brand, consumers get to know the brand’s values, see first-hand how they relate to the local market, and build emotional connections that promote staying power.
At Elevate, we have the right people to help your brand come to life! With offices in North America and Europe, we are the only truly global event staffing agency with the local expertise required to launch products and build connections that last.