Cheerwine’s Time Has Come for a National Brand Push

What is it about carbonation and the Confederacy? Coca-Cola, Pepsi, Mountain Dew and Dr Pepper all have Southern roots and all have grown into global brands and multi-product companies.

Cheerwine, a burgundy-colored, cherry-flavored fizzy drink founded in Salisbury, NC in 1917, wasn’t one of those international soda success stories. But that may turn out to be a good thing.

Still owned by the Carolina Beverage Corp., Cheerwine has gathered a cult following of fans who grew up in its Carolina home territory; and in the ’90s it seemed poised to break out of its Tarheel base.

That didn’t happen, but the drive is on again, thanks to changes in America’s soda-buying habits. Cheerwine has just launched a new Web site complete with viral videos and is making a push to expand both regionally, into states like Tennessee, and nationally with forays into California and eventually into the Mid-Atlantic markets.

According to the company, consumers — especially teens and young adults — are ready for a brand with Cheerwine’s indie cred and novelty. “There’s a sense of discovery with the brand,” says Tom Barbitta, marketing vice president for Carolina Beverage. “There’s a robust level of authenticity and intimacy, because we’re not ubiquitous. A lot of things are working in our favor to make young consumers claim this brand.”

Cheerwine’s regular (non-diet) flavor is sweetened with cane sugar, another trend that has benefitted soda brands both big (Pepsi’s limited-time Throwback) and not-so-small (Jones Soda, among others).

Cheerwine is targeting this adventurous 18-24 consumer with a new, highly engaging Web site, ItsaSoftDrink.com, a chill-out URL that also explains the “wine” in the name. The new site offers games, a music machine, user art galleries and shareable video. One of those, “Good Cop, Naked Cop,” about a police interrogation and a Thigh Master, has gotten 160,000 views since posting to YouTube in mid-April.

“It’s doing what we hoped, which is to begin a viral trend for the brand,” says Ed Klein, president of Hauser Group, which handled the site launch and the digital marketing. “We’re setting the stage for the growth we’re looking for. When the brand is in your market, you’ll be ready for us.”

SECTOR STATS:

Soda Loses Fizz

Here’s the beverage market a brand like Cheerwine faces today, according to market research firm Mintel:

• Regular soda lost 15.6 million U.S. consumers age 18 and over from 2003 to 2008

• In the same period, the diet soda segment added only 7.8 million consumers

• 34% of adults who buy non-alcoholic beverages report drinking more water and less soda

• Bottled water volume went from 4.72 billion gallons in 2000 to 9.4 million gallons in 2008

• Bottled water added more than 24 million new consumers from 2003 to 2008 and now includes 70% of consumers

Source: Mintel