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Kraft MiO Creates A New Segment

Before last year, had anyone heard of liquid flavour enhancers?

Flavour enhancers have existed in powder format for many years, but only after recent innovations were liquid enhancers been seen on the market. In 2011, Kraft launched a product – Kraft MiO – that created a new beverage segment. Being in liquid form, the delivery method provides for quicker diffusion and mixes a lot better relative to powder.

The liquid format is also more personal since the user has the option to add as many drops as they like and customize the flavour’s strength. And the product’s packaging in a water-droplet shaped bottle helps with consumer education that the product is in liquid form.

These benefits and the profit potential have led Coca-Cola to launch their own version of Kraft MiO – Dasani Drops – to compete in this emerging segment. Dasani Drops are only available in the United States, so Kraft can enjoy some exclusivity for now. Given this exclusivity, how should Canadian retailers support liquid flavour enhancers?

Since liquid enhancers are still in its infancy, display promotions would bring much needed awareness to the segment. In addition to its shelf location beside the Crystal Light, Kool Aid, and Nestea powder products, the MiO would benefit from checkout visibility as well as corrugate displays in other category’s aisles.

Corrugate displays help create adjacencies and may in turn lead to larger ticket value. The most suitable locations include the soft drink aisle for a healthy, lower calorie alternative, and the bottled water aisle to complement plain water.

Checkouts are a highly competitive area of retail space, but new products that are heavily supported should pique consumer interest and stimulate trial. Having the MiO at checkout will certainly increase product awareness.

Consumers always want options so the category may benefit from some healthy competition.

Before Dasani Drops entered the American market, some retailers had already created store brand products to compete with the MiO and increase the segment’s awareness.

These retailers also resisted from price promotions in order to preserve the segment’s profit potential. While Canadian retailers watch Kraft enjoy segment exclusivity, having some more options for the consumer may not be a bad idea.

Kraft MiO is a true innovation to flavour enhancers as consumers did not know liquid enhancers could be an alternative to the traditional powder format. Now that the liquid format is available, the only thing missing is more retailer support to alert consumers of the added benefits.

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