Key Coca-Cola and Pepsi rival makes big beverage changes

The iconic brand wants to win more customers in a growing part of the market that Coke and Pepsi don't dominate.

Feb 7, 2024 - 20:30

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Key Coca-Cola and Pepsi rival makes big beverage changes

When it comes to soda, Coca-Cola and PepsiCo dominate the market with KeurigDrPepper as a credible third-place finisher. In 2023 Coke had nearly half the carbonated-beverage sales in the U.S. while Pepsi's sales were about 25% of the market and KeurigDrPepper (KDP) - Get Free Report topped 21%.

That's more than 90% of the total market, with every other company being essentially a niche player.

The beverage market, however, is about much more than soda.

Energy, infused water and other drinks that make health-related claims have become a growing sector. That market has become incredibly crowded, with established players like Red Bull — and Monster, which Coca-Cola (KO) - Get Free Report has a stake in — battle with Pepsi-owned Rockstar as well as countless upstarts like Celsius.

The energy market has become a very hot space as celebrities ranging from the social-media influencer Logan Paul to the pro wrestling legend Ric Flair all have their own signature brands. These drinks, while generally touted for athletic performance and energy, also have become popular as mixers.

Red Bull and vodka might be the most famous drink, but energy drinks have been part of the growing market for mixers in a variety of cocktails. That includes the Monstermeister, essentially a Jägermeister bomb with Monster added to it, and the Margarita Rockstar, a play on the classic using the PepsiCo (PEP) - Get Free Report beverage.

Some brands have more openly embraced being used in cocktails while others have shied away from encouraging customers to mix a stimulant with a depressant. Still, that's not a new concept as rum-and-Coke would make the cocktail Mount Rushmore, so it's a trend that's likely to grow.

The overall cocktail mixer market has also been growing, and a Coke and Pepsi rival owned by Kraft Heinz (KHC) - Get Free Report has revamped an iconic brand in order to claim a bigger share.

Coca-Cola has partnered to bring ready-to-drink alcoholic beverages to market using Coke and Fresca.
Image source: TheStreet

Kraft Heinz believes in Crystal Light

Crystal Light has long been a sneaky alternative to Coke and Pepsi products. It's a little packet of crystals that can be added to water to create a flavored beverage.

There are a variety of versions on that idea now, but in 1984 Crystal Light was revolutionary. Since it launched the brand has been pretty stagnant. Now, Kraft Heinz has decided to revamp the brand and lean into the growing cocktail-mixers market.

"The Global Cocktail Mixers Market size is expected to reach $14.6 billion by 2028, rising at a market growth of 8.2% [compounded annual growth rate] during the forecast period," KBV Research reported.

Kraft Heinz wants to position Crystal Light to be a major player in that market.

"Today, the Crystal Light brand debuts three innovative additions to its portfolio for the first time in over a decade with the launch of Mixology, Immunity and Energy product lines," the company said on Feb. 6

Crystal Light moves into mixology

In addition to leaning into a growing trend, Kraft Heinz said it was also responding to how some customers already use Crystal Light.

The new drinks offer what the company calls "an elevated beverage experience with cocktail-inspired flavors, immunity-supporting zinc and Vitamin C, and energizing caffeine to help uplift your day."

That's a big change for a brand that over its 40-year history was marketed mostly as a calorie-free way to make water taste better.

"As many Crystal Light consumers already use the product as a mixer, the new Crystal Light Mixology Multipack offers a simple solution for crafting your favorite cocktails in your own kitchen," Kraft Heinz said.

In addition, the company believes its new Crystal Light packets also work for people looking to make alcohol-free mocktails.

"With nearly 30% of Americans aiming to drink less alcohol, the flavors also cater to sober-curious consumers by providing delicious mocktail options. The Crystal Light Mixology Multipack is available in three cocktail-inspired flavors – Watermelon Margarita, Black Mojito and Mai Tai," the company added.