Ribena fighting for hearts and mums

GSK’s Ribena is engaged in a battle with Sunny Delight and Robinsons to maintain the top spot in children’s lunchboxes. Is its position as an offshoot of drugs behemoth GSK a good one to fight from?

Ribena’s cartoon berries are feeling the squeeze as a fierce battle rages over the lunchboxes of the UK’s children. Procter & Gamble has just relaunched Sunny Delight and Britvic Soft Drinks’ Robinsons brand is back on TV. GlaxoSmithKline is planning a fightback by boosting Ribena’s marketing budget by £7m to £27m. It is expected to introduce “sports cap” bottles as it tries to rejuvenate the 64-year-old brand in the lunchbox sector but will also attempt to bolster its core market of mothers and young children (MW last week).

The overall Ribena brand, which includes variants Ribena Light and Ribena ToothKind, has strong sales. Supermarket sales are slipping, however, and buyers say the product is beginning to feel old-fashioned. AC Nielsen figures for the year to August 11, 2001 show Ribena’s supermarket retail sales down five per cent to £114m. And sales of ready-to-drink Ribena products are believed to have fallen in value by 12.8 per cent – to £34m – in grocery chains for the year to October 2001.

But a GSK spokeswoman says that the brand has grown by 22 per cent over the past five years, giving it a total value of £141m in 2001 (AC Nielsen), and that the volume leaving the factory has grown by 41 per cent over that period.

Ribena’s main rival in the lunchbox sector is Britvic Soft Drinks’ Robinsons Fruit Shoot brand, which is already available in 200ml and 300ml “sports cap” bottles. It achieved retail sales of £25m (AC Nielsen) in 2001 and retail buyers are impressed with the product’s performance given the fact that it only launched in August 2000. Britvic believes it can increase the value of the Fruit Shoots brand to £30m or £40m this year with the help of a £3m, five-week TV campaign which broke last week under the established “New Thinking, New Drinking” strapline. Total supermarket sales of the Robinsons family of products were £186.5m for the year to August 2000.

Activity in the lunchbox sector continues with this week’s relaunch of Sunny Delight. The brand’s initial success was severely dented after parents took on board the criticisms of the Food Commission and others on its juice and sugar content. Value sales fell by 38 per cent to £52.6m in the year to October 7, 2001. The product now incorporates a higher juice content, new packaging and “no added sugar” variants. The new-look Sunny Delight is being backed by a £12m marketing spend, with £5m devoted to advertising.

Ribena also suffered adverse publicity, following the launch of Ribena ToothKind in 1998. Healthcare experts and nutritionists said that the product’s advertising strapline – “Does not encourage tooth decay” – made an exaggerated claim. GSK was forced to amend its literature after the High Court ruled that the strapline was misleading. Ribena ToothKind does, however, remain the only children’s drink with accreditation from the British Dental Association.

That may still count for something with mothers, but children are keen to make their own consumer choices and often opt for carbonated products. One agency source, who has worked on a carbonated soft drink brand, says: “If the brand is positioned on medical grounds it is hard to get children to like it. Ribena is too maternal – if it’s something your mum puts in your packed lunch it’s not cool.”

The introduction of a ready-to-drink “sports cap” bottle could enhance the brand’s credibility with youngsters. Budgens buyer Len Hooper says: “I think the small Tetra Pak carton is outmoded, impractical and messy. No one looks cool with a Tetra Pak and a straw. Ribena is ideally suited to a refillable or ‘sports cap’ container.”

One buyer points out that Ribena has lost ground because it no longer supplies threeand nine-packs of the cartons, but has moved to sixand 12-packs. Cost-conscious mums are finding these too expensive – in terms of headline price, not price per carton – when there are cheaper rivals available.

GSK is reticent about its new marketing campaign, but insists that it will not be aimed at adult drinkers and that it remains focused on its core market of mothers and young children. GSK unsuccessfully tried to target 18to 35-year-olds with the Ribena-flavoured carbonated drink Ribena Twist, which launched in March 1997 and disappeared from shelves at the end of last year. Sources suggest that the new campaign will drop the animated blackberries it has used for the past 12 years, which were devised by long-term ad agency Grey Worldwide.

GSK has proved that it can revitalise a brand, as it did with Lucozade which was given a boost by the introduction of Lucozade Sport – now market leader in the sports drink category – in 1990.

However, GSK – formed from the merger of SmithKline Beecham and Glaxo Wellcome in 2000 – is essentially a pharmaceutical company, and analysts question its commitment to the nutritional healthcare division, which includes Ribena. The division – which also covers Horlicks and Lucozade – has sales of about £580m, dwarfed by total group sales of more than £18bn. GSK denies that the division, which competes with soft drinks giants Pepsi and Coca-Cola in the sports drinks market, is up for sale.

Williams de Broë analyst Peter Cartwright suggests that GSK should focus on its core business – especially after the company lost a US patent case relating to antibiotic Augmentin last week – and concentrate on the research and development of new drugs. While the drugs are being developed, he says that the nutritional healthcare division contributes to a positive revenue stream. But if profits from the division dry up he suggests that GSK, like other pharmaceutical companies such as Novartis, will sell off the nutritional healthcare business.

However, the long-term future of Ribena is likely to be dictated by GSK’s shareholders rather than the success (or failure) of any marketing push for the brand.

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