Daily Insights

The Consumer Metamorphosis

By: Alizah Asif Farooqi | May 10, 2019

Sparkling Ice is diving headfirst into digital this year. The flavored water brand recently shifted its marketing budget to digital, spending about half what they spent on traditional in 2017, in an effort to attract new customers. But will the strategy switch be enough to satisfy the thirst of the evolving consumer?

In the past few months, Sparkling Ice has introduced two Google Assistant and Amazon Alexa skills. Sparkling Advice, the second voice skill offered on Google and Amazon, will be available around Mother’s Day. Two months ago, the company released Sparkling IceMaker on Google Assistant and Amazon Alexa too, which provided consumers with mocktail and cocktail recipes. Now, the brand is gearing up for more digital campaigns based on search and purchase behavior, a stark contrast to the traditional media it employed two years ago.

There’s no doubt that making a stronger move into digital is a smooth one, but Sparkling Ice isn’t alone in its quest to quench consumer thirst. To start with, taste buds aren’t what they used to be. Cravings for syrupy sodas have been replaced by an addiction to au naturale: water. Bottled water sales now outpace soda and sparkling water consumption has more than doubled since 2010, with smaller brands like LaCroix experiencing waves of growth.

Brand performance across leading e-commerce channels and Google search trends reflect these consumer preference shifts. For example, products in the matcha, sparkling water, and coffee categories on Amazon saw the largest rank increase among best-selling beverage products on the platform. Google search volume for unbranded terms in the oat milk and alcoholic sparkling water categories respectively increased by more than 300% and 100% over the last year, according to Gartner L2’s Digital IQ Index: Beverages & Beer. Indeed, Sparkling Ice may have noticed that digital has been a central focus for smaller brands at the forefront of this category disruption. Hint, which also sells sugar-free flavored water, ranked as Gifted in this year’s study, while the former fell nine spots.

In addition to small players, Sparkling Ice will have to level off with legacy brands looking toward digital to ignite growth. PepsiCo acquired SodaStream this year, and in 2017, AnheuserBusch bought Hiball, a maker of caffeinated sparkling water. Bubly, a sparkling water brand launched by PepsiCo in February 2018, already accounts for over a quarter of best-selling sparkling water brands in the beverages category on Amazon, according to Gartner L2’s study. The brand’s success also came with significant digital investment—Bubly’s sponsored products appear on the first page of search results for more than half of sparkling water terms and just under a quarter of diet soda terms on Amazon.

As investments shift to product innovation and digital, the switch might be Sparkling Ice’s saving grace.  So far, the results speak for themselves. The drink maker attributes its recent first-quarter 2019 revenue of $123.7 million to the switch from traditional marketing to digital and announced in April that sales volume rose 22.3%, up $20 million for the quarter as compared with the same quarter last year. Beverage brands that have just begun dipping their toes into digital must see the light and make the switch in full if they want to keep up with the consumer metamorphosis.