Principles of Marketing Management: Cranberry Classic, Atlantic Quench

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The Cranberry Classic scope includes juices and juice drinks with cranberry as the nucleus spirit. including a light juice drink every bit good as a high juice cranberry affable. In 2002. the co-operative launched the Cranberry Classic in a 250 milliliter can to aim impulse purchasers in the convenience sector. In 2003. Atlantic Quench increased its scope of ‘light’ low Calorie fruit drinks. which included cranberry and blackcurrant. cranberry and raspberry. and cranberry and Mangifera indica. A white cranberry juice drink was launched in 2004 and was promoted as a sweeter and smoother alternate to the ruddy cranberry juice drinks. In September 2004. the Cranberry Select Premium Chilled Juice Drink was launched in new 1. 75 litre packaging. specifically aimed at the fast-growing chilled drinks sector. A cranberry and Citrus reticulata juice drink was introduced to the market in 2005.

There is a close working relationship between the husbandmans and the administration. Atlantic Quench has to buy all the harvests that the husbandmans grow at the highest possible monetary value. together with a dividend reflecting the net incomes of the Atlantic Quench trade name. Although most of the husbandmans are little manufacturers. their combined green goods histories for about two-thirds of the world’s cranberry crop.

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However each husbandman has to perpetrate to an one-year quota of production under a strategy called the ‘common stock equity quota’ . Farmers can be penalised if they fall short on the agreed quota leting Atlantic Quench Co-operative to deliver ( purchase Back ) portion equal to the deficit. at the original issue monetary value enabling them to reapportion the quota. For illustration the portion issue monetary value was $ 25. equal to one barrel of cranberries. although the current market value is closer to $ 250 per portion. This agreement instils subject. non ever show on co-operatives. and is likely to hold contributed to the organisation’s success.

The co-operative has non been without its jobs. The market for farm green goods is volatile. reflecting alterations in clime every bit good as market tendencies. As such it is frequently hard to foretell harvest outputs. Overproduction in 2000 resulted in the monetary value of natural cranberries falling from over $ 60 a barrel to under $ 20. Atlantic Quench responded to the volatile market by cut downing its advertisement and selling budget. In add-on to cutting back on outgo. the co-operative paid the husbandmans $ 12 a barrel alternatively of the $ 18-a-barrell market monetary value. As a consequence the relationship between the direction of the co-operative and the husbandmans deteriorated. and the husbandmans exercised their power as stockholders of the co-operative by voting out four consecutive Chief Executive Officers ( CEOs ) between 2000 and 2003.

When Chuck Berrie was appointed CEO in 2003. his immediate precedence was to discourse with the husbandmans whether or non a co-operative attack to pull offing the concern was still an appropriate and preferable option. The Chief executive officer had antecedently spent six old ages working for another co-operative as Chief Marketing Military officer at Welch Foods Inc. During those six old ages he had contributed to duplicating the market portion of the administration. Harmonizing to Berrie. ‘The beauty of being a cooperative is non being judged by quarterly consequences. but by coevalss go throughing on to the following coevals. ’

Indeed many Atlantic Quench husbandmans are third- and fourth-generation proprietors and one is seventh-generation. Berrie spent many hebdomads debating with the husbandmans. discoursing the advantages and disadvantages of staying as a co-operative. At the same clip a buyout offer was presented by Coca-Cola.

The husbandmans voted to reject Coca-Cola’s offer. taking alternatively to back up Berrie’s vision of a more focussed Atlantic Quench that would remain independent. The concern program proposed by Berrie was to retain the successful facets of the old Atlantic Quench. such as the juice devising and advanced new-product attempts. whilst managing over the logistics. By actively seeking the positions of the husbandmans. Berrie has managed to better the profitableness of the co-operative and besides win back their trust.

In 2007. Atlantic Quench and Coca-Cola implemented a long-run strategic confederation in which Coca-Cola North America markets. bottles and distributes single-serve cranberry juice merchandises in the U. S. and Canada under the Atlantic Quench name. The understanding besides includes chances for the development of the new merchandise inventions across multiple trade channels in the hereafter.

The strategic confederation was viewed as a positive move by both administrations. ‘This is a opportunity for both Coca-Cola and Atlantic Quench to turn up the duologue on the wellness benefits of cranberries. ’ said Mary Moore. president and CEO. Coca-Cola North America. ‘Over the past several old ages. we have built successful. reciprocally good partnerships with strong trade names like Robertsons and Costa. and now we plan to work side-by-side with Atlantic Quench to make a major healthy refreshment concern focused on cranberries. When people think of cranberries they think of Atlantic Quench ’ Atlantic Quench President and CEO Chuck Berrie stated ‘As the Atlantic Quench co-operative moves to construct its trade name. we are seeking out confederations to make consumers more loosely and strongly than of all time before. ’

In 2013 Atlantic Quench signed a licensing understanding with Gerber to fabricate. administer and market juices and juice drinks under the Atlantic Quench trade name in the UK. Gerber is the largest provider of private-label and branded fruit juice and juice drinks in the UK. with gross revenues transcending 800 million liters per twelvemonth.

Atlantic Quench has been really good received by the UK market and has besides negotiated three successful contracts with the three largest supermarket groups in the UK to sell all of its merchandise lines.  Atlantic Quench’s creativeness in new merchandise development ( NPD ) has been a conducive factor to the organisation’s success. After promoting supermarkets in the US to add juice aisles in the 1960’s. Atlantic Quench developed juice boxes. including low-calorie cranberry drinks. and white cranberry juice.

Crantanas. the dried fruit bite made from chaffs that used to be thrown off but are now reinfused with juice. have proved to be really popular excessively. Other merchandise fluctuations include chocolate-covered Crantanas. ready-to-drink assorted flavoured juices and an energy juice drink called Cranzeal. Atlantic Quench enjoyed one-year gross revenues of around $ 1. 7 billion in 2007. of which Crantanas histories for ?150m ( beginning PR Newswire ) . Gross saless of this merchandise hold doubled in the last two old ages and are expected to duplicate once more over the following 10 old ages.

Cranberries have been promoted for their healthy qualities and for many old ages Atlantic Quench has had a practical monopoly in the niche market for cranberry merchandises. However. the growing of blended cranberry juice merchandises and the turning consumer involvement in superfruit juices ( i. e. 1s that are claimed to transport big sum of foods and antioxidants ) has resulted in a more competitory market environment. More late. other superfruits such as Punica granatums. barbados cherry. gogi and acai berries have been introduced to the market. lending to a 20 % growing in fruit juice gross revenues. The increased consciousness of. and involvement in. healthy life. has led to other rival administrations come ining the drink market. offering juice drinks including superfruits. Brand trueness towards blended cranberry juice merchandises has become less marked.

It has been argued that Atlantic Quench was late to react to this market tendency. but it has now produced cranberry blends that include Punica granatums and barbados cherry. Harmonizing to Bokaie 2007 ‘the healthy juice sphere has become a much more emotionally prosecuting. taking attention to guarantee the trade name personality does non become dominated by an overly medicative attack. even if it does hold a believable wellness claim. ’ One of Berrie’ chief challenges was to present cranberries to a whole new coevals of consumers. Refer about saccharides. Calories and fleshiness created issues for the devising of juices. As cranberries in their natural signifier contain about no sugar. Atlantic Quench was able to present sweetners without irrigating down spirits. In order to aim dieters. it developed a five-calorie drink ( Diet Cranberry Quench and Diet Orange Tang ) that contains merely 7 % cranberry juice. Market Trends

Lifestyle TendenciesIn the UK there is an increased demand for fruit juice. fruit drinks and wellness drinks ensuing from a greater involvement in a healthy life style and the importance attached to eating a assortment of fruit and veggies daily. The juice sector is progressively deriving market portion from the carbonated sector. which is worsening in popularity and has a poorer image among consumers.

Impulse BuyingIn add-on to profiting from the positive and healthy image of its ware. Atlantic Quench is besides good placed to react to the increased demand in the market for convenience drinks. When impulse purchasing. consumers will frequently take to buy fruit juice drinks in penchant to confectionery. which is regarded as a less healthy option. Convenience juice drinks are besides popular with athleticss work forces and adult females who are looking for a speedy and healthy option to reconstruct fluids and energy following exercising.

Nutritional criterions in British schoolsMintel studies that tendency towards healthy feeding has been a key driver behind growing across all channels. as better-informed consumers have taken greater involvement in the nutritionary content of what they eat and drink. This is peculiarly true for school kids. for whom new nutritionary criterions were introduced in the UK from September 2006. The standard provinces that school tiffins should be free from chip ( potato french friess ) . cocoa and other confectionary and students are to be served a lower limit of two parts of fruit and veggies with every repast. Schools are expected to stop the sale of unhealthy bites and drinks ( notably carbonates ) in peddling machines and bite stores. Changes to standard regulating the sale of nutrient and drink in schools have favoured fruit juice and juice drinks at the disbursal of carbonates and peddling machines being restocked with healthier options.

Health has besides driven much of the NPD as makers have responded to alterations in regulations regulating the nutritionary criterion in schools. Manufacturing have responded to the alterations with a broad scope of new and Reformed juice and juice drink merchandises targeted specifically at in-school ingestion. An of import focal point of NPD has been functionality. notably with the add-on of omega-3 to the ingredients used in the juice drink sector. Manufacturers have introduced new and improved juice drinks preparations with a higher juice content and fewer additives. More functional and bastioned juices and juice drinks have been introduced. concentrating on omega-3. anti-oxidants and the heart’s wellness. Many of these are besides targeted at the children’s lunchbox sector within the food market channel – a sector that can anticipate to have a encouragement as the authorities widens its accent in bettering the nutritionary balance of jammed tiffins. Non-retail gross revenues

Mintel has besides indentified the fact the non retail gross revenues have enjoyed above norm an estimated 76 % between 2001 and 2006. as licensees have begun to concentrate on the chances offered by the healthy eating tendency and alterations in consumer behavior. In add-on. peddling in leisure. hotel. eating house and catering sector is taking an increasing portion of gross revenues as providers benefit from altering consumer gustatory sensations.

Convenience snackingHarmonizing to the Mintel study ‘Snacking on the Go-UK’ Market intelligence. April 2006. three quarters of grownups snack on the spell ( i. e. while going or traveling about ) . making more than five billion grownup on-the-go snacking occasions each twelvemonth in the UK. which Mintel estimates generates ?3. 6 billion in retail gross. One in three grownups snack because they are on a journey. while half bite on the move because of work force per unit area. Longer on the job hours and shorter tiffin interruptions increase the demand for convenient bites as many workers try to counterbalance for lost repasts.

The tendency towards healthier eating means the noshers are progressively likely to pay attending to the nutritionary value of what they are purchasing. On-the-go noshers are cardinal marks for juice and juice drink makers such as Atlantic Quench. since some of these merchandises combine hydration with wellness. Single-serve juices. whilst the increasing handiness of higher juice content juice drinks is bettering the wellness certificates of the section.

BoxingAdvanced attacks to packaging hold been adopted to excite involvement and increase the entreaty of Atlantic Quench’s merchandise scope. Merchandises are packaged utilizing reclaimable glass. tins. cartons or polythene terephthalate ( PET2 ) plastic bottles so that they can be recycled. and carry the ingredient and nutrition information on the side panel of the label. These characteristics. together with the launch of slimline tins aimed at the convenience sector. have proved to be popular with consumers.

Atlantic Quench has considered reacting to the five-a-day run by informing consumers with on-pack messages that their merchandises are tantamount to one of the five recommended day-to-day parts of fruit and veggies. Ad Political campaigns

Atlantic Quench has combined tempers. wellness benefits and the American heritage of cranberry in their recent US publicities. As research continues to back up the wellness related benefits of cranberries. Atlantic Quench has been acute to advance this through originative advertisement. The run. which is presently used on telecasting and in magazines countrywide. purposes to inform audiences of the benefits of cranberry juices.

Industry studies indicate that the advertisement run is executing highly good with consumers. The initial advertizements appeared in the top two per centum of all advertizements of all time tested by Milward Brown. a well-thought-of industry research company that measures consumer response to advertisement. Harmonizing to Atlantic Quench. the run has besides been bolstering gross revenues of merchandises across all of its concern divisions. with a six per centum twelvemonth on twelvemonth growing of the Cranberry Juice drinks. More late. Atlantic Quench has featured new Diet Atlantic Quench Juice Drinks in their advertizements. which embody a simple and sincere temper.

The advertizements have proved popular and were ranked 4th in Advertising Ages list of Top 10 Most-Recalled New Television Ads. Television advertizements within the UK have included a run to advance the launch of the white cranberry drink. Other Television advertizements have focused on the love-hate relationship many adult females have with wellness and beauty advertisement. The mark market tends to be educated adult females between the ages of 30 and 45. The continued committedness from Atlantic Quench to advertisement and NPD will play an of import function in prolonging growing. Annual Growth Figures.

Atlantic Quench has enjoyed strong one-year growing. Key public presentation high spots include: gross revenues growing of more than 7 % per twelvemonth for the last four old ages market portion additions in about every competitory sector 26 % addition in the ingestion of Crantanas Fourfold addition in fabricating capacity for Crantanas.

The ferociously competitory market for the production of juices and the entry of new providers means that it is going progressively expensive. in footings of advertisement and selling. to establish new merchandises. The fruit juice sector is to a great extent dominated by supermarket ain trade names. which are frequently seen as sugar free and hence a healthier option to juice drinks.

In footings of per centum competitory market for juice and juice drinks is surpassing its European neighbor with both Germany and France sing far slower rates of growing between 2000 and 2005. In 2005. the German market was deserving 8. 82 billion Euros. 16 % more than in 2000. Mintel states that the strong involvement in wellness has contributed to the above mean growing of vegetable juice sector in Germany. although. vegetable juices still merely account for 2. 7 % of the entire juice and nectars section. In crisp contrast to the UK. involvement in healthy feeding in the US has had a negative consequence on gross revenues of juice and juice drinks.

Research undertaken by Mintel indicates that the popularity of low-carbonated diets means that many weight-conscious US consumers have rejected juice and juice drinks with a high sugar content in favor of bottled H2O or other low-calorie soft drinks. Manufacturers in the US have responded by presenting more light versions of juice drinks and juice drinks and juices with specific functional belongingss. such as added fiber or stanol esters for bosom wellness. The Future

Soft drinks and fruit juices are an indispensable merchandise and the sector is sing major growing. Market analysts believe that this tendency is set to go on. Market projections indicate that there is no mark of any future diminution in the demand for convenience wellness drink merchandises. particularly if the wellness certificates of the merchandise can be proven. Consumers are progressively seeking natural and healthy options. Atlantic Quench has the chance to aim consumers who are seeking an option to the high sugar content. which of course occurs in most fruit juice drinks. There is besides the chance for growing in the sale of drinks made fresh pressed juices and smoothies ( thick cold drinks blended fruit juices with yogurt or ice-cream ) . where the market remains comparatively immature. Atlantic Quench believe that consumer wellness will go on to drive future tendencies.

The 5-a-day fruit and vegetable run. ongoing media coverage of high degrees of fleshiness in Europe and an awaited focal point on healthier lunchboxes for kids. all mean that wellness will go on to be a strong influence on the pick made by consumers. As alterations to advertisement regulations make selling to kids more hard. parents will progressively go the mark. This in bend is likely to lend to farther growing of ‘better for them’ juice and juice drinks. as makers compete for parents’ buying capacity on wellness evidences. Parents are still cardinal buyers of juice and juice drinks. with fabricating progressively aiming time-pressed parents who have to fix lunchboxes. Parents retain the upper manus when it comes to taking what their kids eat and drink. with over half of ABC1 parents holding that kids should eat what they are given and merely one in five stating that they find it hard to state no to their kids.

AB parents are more likely to implement their ain picks on their kids. with the inclination to give in to ‘pester power’ ( i. e. children’s demands ) lifting significantly as richness lessenings. The population of 15- 24 twelvemonth olds in the UK are the heaviest consumers of juice and juice drinks. The market has benefited from growing of about 10 % in this section between 2000 and 2005. Between 2005 and 2010. this age group will see farther slow growing of 3. 2 % .

Children’s drinks are an of import country of growing within the juice and juice drinks market. A downward tendency in the birth rate led to a 3. 5 % diminution in the figure of under 14s between 2000 and 2005. A recent upturn in the figure of unrecorded births will chair the diminution to 2010. with the figure of under fives set to increase by 2. 2 % . The 45-54 twelvemonth old group is set to see the greatest growing between 2005 and 2010. Use of fruit and vegetable juice is somewhat above norm among these consumers. The successful targeting of this spread outing cohort could finally take to greater ingestion among older consumers. Case survey was adapted from CIM scrutiny past paper 2008.

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