The Tropicana Squeeze on their own Brand

For those who haven't been following the excitement in the Refrigerated Juice Section in local grocery stores across America, here's an update:

"After its package redesign, sales of the Tropicana Pure Premium line plummeted 20% between Jan. 1 and Feb. 22, costing the brand tens of millions of dollars. On Feb. 23, the company announced it would bow to consumer demand and scrap the new packaging, designed by Peter Arnell. It had been on the market less than two months. A swift reversal_Now that the numbers are out, it's clear why PepsiCo's Tropicana moved as fast as it did. According to Information Resources Inc., unit sales dropped 20%, while dollar sales decreased 19%, or roughly $33 million, to $137 million between Jan. 1 and Feb. 22. Moreover, several of Tropicana's competitors appear to have benefited from the misstep, notably Minute Maid, Florida's Natural and Tree Ripe. Varieties within each of those brands posted double-digit unit sales increases during the period. Private-label products also saw an increase during the period, in keeping with broader trends in the food and beverage space. The entire refrigerated-orange-juice category posted flat unit sales and a 5% decline in dollar sales during the period. As the leader in the category, it makes little sense that Tropicana Pure Premium would see such a drastic sales decline while the category remained relatively flat, industry experts said. Through Feb. 22, Tropicana Pure Premium accounted for about a third of sales in the refrigerated-orange-juice category."

Notice too the overall category decline. So not all is attributable to the Tropicana re-design. No one mentioned the recent price increases that are also responsible for the category's decline. Obviously, juice is elastic, raise the price, affect volume. Moreover, there has been a quantity reduction as well. The category leaders in every market are local producers, usually dairies that reconstitute and bottled from concentrate. They are delivering milk, why not juice? Tropicana's point of difference and brand promise was fresh squeezed. Apparently, not merely content with the package re-design, Tropicana also tampered with the formula and then reduced the quantity as well.

What interests me in all of this is "Branding." Here is a classic example of brand-loyal consumers rebelling similar in many ways to the New Coke fiasco. What makes consumers brand-loyal? In this case, quality. Tamper with the perception of what constitutes the Tropicana Brand and consumers rebel.

The 'Straw-in-the-orange' campaign was a good example of "Branding." The 'Straw-in-the-orange,' marked Tropicana's point of difference over their competition, fresh squeezed, and no concentrated orange juice, just 100% natural Orange Juice. It was not only on the package, but embedded in the consumer's mind after millions of dollars in advertising touted the 'Straw-in-the-orange' fresh squeezed taste. This multi-million dollar investment in the brand worked. Tropicana had gained 'Brand Equity' and held the strategic position in the category until they themselves tampered with the success formula.

It is, and always will be a classic case study in branding. Will the brand rebound? It is doubtful. When brand-loyal consumers feel cheated, it is difficult to win them back.

Once Totino's Party Pizza was the nation's number one selling pizza - both in dollars and units (volume). They too tampered with the magic formula, changing the name from Party to Tempting Toppings. The result was to send the Pillsbury Company into free fall, eventually ending up with Grand Metropolitan. The Pillsbury Company lost forever.

Jeno Paulucci once said he'd give his right arm up to the elbow for the name "Party" because he believed people would rather have a party then a Jeno's. In the end he was right. Jeno's as a brand disappeared, and the re-staged Totino's Party Pizza never regained its market position.

It will be interesting to see if Tropicana can regain its its market position. Or will category participants see this as a strategic opportunity to forever dethrone them?