- Coca-Cola will release a new sparkling water brand called Aha in March 2020. The new beverage marks the company's first major new brand launch since 2006.
- The team started with an initial list of 800 potential flavors before landing on eight combinations: Lime + Watermelon, Strawberry + Cucumber, Citrus + Green Tea, Black Cherry + Coffee, Orange + Grapefruit, Apple + Ginger, Blueberry + Pomegranate and Peach + Honey. Two of the flavors will include 30 mg of added caffeine.
- Aha will replace Dasani's sparkling water brand in retail locations. Dasani Sparkling will continue to be available on Dasani PureFill dispensers and Coca-Cola Freestyle machines.
Sparkling water has moved from a niche category to a powerhouse beverage that has grown at such a fast clip it has outpaced the growth of still water — America’s most popular beverage category by volume since 2016 — six-fold. In 2018, bottled sparkling water volume grew by 26% while the still water category grew by 4.2%, according to data from Beverage Marketing reported by CNBC.
But Coca-Cola thinks the category needs more innovation. That's why the company spoke to thousands of consumers to develop Aha's prototype, which was done in about six months. Coca-Cola North America's Sparkling Water Director Julie Siwemuke said in the release there are "unmet needs" in the category, and Aha hits on those with its interesting flavors and colorful branding.
Although the company sees an unmet need, Aha will face increasing competition in the sparkling water space. Spindrift, a startup sparkling water company that uses natural fruit flavoring, reported sales soared 800% from 2016 to 2018. Pepsi's bubly, which launched last year, features Instagram-worthy cans and no artificial flavors or sweeteners — contrary to market leader LaCroix.
Brands that don’t reach for something new risk going flat. Analysts cited lack of meaningful innovation and inexperience as reasons that National Beverage Corp., which owns LaCroix, saw its stock reach a 52-week low this summer. The company cut its price target on the stock by 20% after already experiencing a drop in share price. MarketWatch reported National Beverage has seen its stock lose 56% of its value in the last year.
Likewise, Coke has not seen expected levels of popularity for its Dasani Sparkling line, which launched in 2014. Although the soda giant quoted Nielsen data showing 27% sales growth in Coca-Cola North America's sparkling water brands, much of that looks to be driven by its Smartwater and Topo Chico brands as Dasani Sparkling has only eked out a meager market share of just 2.5% in the four weeks ending Oct 5, according to stats from a Wells Fargo analyst quoted by The Wall Street Journal.
Wary of the lessons that LaCroix and Dasani Sparkling have to teach, Coke is trying to position its new brand as fresh and original. Instead of folding the brand under another of the company’s familiar household names, Coke chose to launch an entirely new line to differentiate it from the legacy soda giant and paint Aha as more of an independent and innovative line. That move could give the brand a chance to stand out in a crowded market.
To help get eyes on the brand, Coke chose to use unusual flavor pairings to break away from the ubiquitous berry and citrus flavors in ther category. But where the beverage giant really took a leap was adding caffeine to two of the new flavors. By adding a jolt to its sparkling water, Coke stepped over the line into making its sparkling water a functional beverage. That could be a smart move since cold, sparkling and caffeinated drinks have proven to be incredibly popular as evidenced by the meteoric rise of cold brew and energy drinks in the last year.
Beyond injecting a few new ideas into the launch of Aha, Coca-Cola also has the distinct advantage of a robust supply chain through which it can distribute its new line. Even LaCroix, which has led the market for a decade, will have trouble competing with such a wide distribution network, especially if Aha catches on. However, as such a latecomer to the space, Coca-Cola is still going to have a steep climb to reach the top of the category.