Flavored Mineral Water Strategy - Japanese Market

South Beach Company (SoBe)

Flavored Mineral Water Strategy - Japanese Market

INTRODUCTION:

South Beach Beverage Company, SoBe, makes and markets herbal enhanced beverages. These beverages, called "healthy refreshments" have been designed to market to active persons concerned with their health. Other products that SoBe sells online are hats, shirts, limited collectibles, children's clothing, sportswear, and some other miscellaneous items to include duffle bags and water bottles. SoBe products are available throughout Canada, Puerto Rico, Aruba, Anguilla, St. Kitts, Nevis, Grand Cayman Islands, Turks & Caicos, Bolivia, Antigua, Barbados, Guam, Bahamas, Bermuda, United Kingdom, Ireland, The British Virgin Islands, El Salvador, Trinidad, Mexico and Curacao. Beverages can be found in convenience stores, grocery stores, mass merchandisers and warehouse clubs, delis, gas marts, and select restaurants/hotels. A separately operating unit of Pepsi-Cola North America, SoBe markets and sells its beverages through the combined efforts of Pepsi-Cola bottlers and independent distributors.

Starting in 1996 by four partners who were into health and fitness as a way of life, the first product introduced, SoBe Black Tea 3G with Ginseng, Ginkgo and Guarana brought an overwhelming response. As a result, the company gained ground and immediately introduced SoBe Green Tea, SoBe Oolong Tea, SoBe Orange Carrot Elixir, SoBe Cranberry Grapefruit Elixir and SoBe Energy. These products started the company and now serve as the foundation for future brand development.

Most SoBe beverages are sold in a 20 oz. glass "lizard" bottle that is double sealed to protect the freshness of the beverages. However, in order to make their product more portable and safe for places where glass isn't the best material to use, the company produced one line of their drink, SoBe Synergy, in a can which is 11.5 oz. SoBe also makes several other beverages to include SoBe Sports System, an advanced performance beverage system, SoBe Adrenaline Rush, an all-natural maximum energy supplement, Love Bus Brew, an energizing chocolate-flavored drink, and SoBe Ice, an icy-cold fountain-dispensed frozen drink. SoBe's name can also be found on SoBe Gum and SoBe Chocolate - two of their licensed products. The newest product is the 16-oz. energy-packed SoBe No Fear Super Energy Supplement.

Being in the business of producing healthy drinks, SoBe even has a sugar-free product line called SoBe Lean. This line appeals to diabetics and all health-conscious consumers who want to avoid sugar. These drinks are sweetened with a blend of sucralose and ACE-K. The company boasts many different recipes for health drinks and there are currently over 200 different cap slogans in production. The flavor of the beverage is on all of the front and back labels, excluding the 3G Teas. Although some products don't have the flavor of the beverage on it, because it is part of their older stock still on the market, new labels are being generated so that all products will eventually have their flavor name on it. Another health issue for consumers is weather or not caffeine is added. SoBe beverages show an ingredient statement on the back label for all of their beverages. In general, all of their tea drinks contain caffeine that is naturally derived from the tea leaves.

The list of flavors available to consumers of SoBe health drinks is so long that room often needs to be made for the production of new drink flavors. There have been several flavors discontinued to make room to include SoBe Drive, SoBe Essentials, Edge, Eros, Red Tea, Orange-Tomato, Strawberry Carrot Elixir, Karma, Wisdom, Lean Green Tea, Lean Peach Mango, Lean Orange Carrot and Lean Citrus. However, some of these discontinued flavors may come back in the future. Although SoBe just came out with a 4 pack of SoBe bottles in their more popular flavors and currently make 12 pack variety cases, usually sold at wholesale clubs, they don't make the 6 pack.

Complete Beverage Line:

Exotic Teas and Fruit Juice Blends (Black Tea, Dragon, Green Tea, Nirvana, Oolong, Zen Tea)

Powerline (Courage, Drive, Energy, Fuerte, Power)

Elixir Line: (Pomegranate Cranberry, Cranberry Grapefruit, Orange Carrot)

Lizard Line: (Black and Blue Berry Blue, Liz Blizz, LizFuel, Lizard Lava, Lizard Lightning, Tsunami)

SoBe Lean: Cranberry Grapefruit, Peach Tea, Tropical

SoBe Adrenaline Rush: Adrenaline Rush, Sugar Free SoBe Adrenaline Rush

SoBe No Fear

Special Recipes: Long John Lizard's Grape Grog, MacLizard's Special Recipe Lemondade

Synergy: Fruit, Grape, Kiwi, Lemonade, Mango

Variety Pack: Includes Green Tea, Lizard Lava, Energy, Orange Carrot Elixir

Fountain Drinks: Includes Energy, Lean Cranberry Grapefruit, Power

SoBe Ice: Frozen drink

As mentioned earlier, SoBe is a player in the international market and, therefore, already understands how to operate on that level. However, SoBe doesn't currently sell their products in Japan, a market that research has shown to be a lucrative one for exporters of health beverages. In addition, research has also shown that this is especially the right time for sellers of health beverages to get into this market because Japanese consumers are more health-conscious than ever before. This is so much the case that the market for these beverages continued to grow, even during Japan's recent recession. Companies like SoBe, which produce natural, organic, herbal or fruit ingredients have a great chance of being a success in Japan as a result of this continued demand.

Currently, 20 companies own 80 percent of Japan's beverage market with one U.S. firm alone holding 35 percent. But these large market-players still need reliable suppliers of trendy health and natural products. This is why SoBe should initiate one or more of their product lines to the Japanese market.

INTERNAL FUNCTIONS:

PLANNING:

SoBe's new product in Japan will need to be designed to meet Japan's market needs and to comply