“Welch’s Strategic Move to Re-enter the Soda Market: Capitalizing on Health Trends and Consumer Demand”
Welch’s decision to intensify its presence in the soda market could be a strategic move to broaden its brand reach, particularly since its fruit-based beverages may have an advantage over conventional sodas. For example, Welch’s can utilize ingredients such as Concord grapes, known for their benefits to heart and cognitive health, to promote a healthier soda option. The company’s strong reputation, high consumer awareness, and positive brand image also work in its favor. Notably, Welch’s received the 2016 Women’s Choice Award as America’s most recommended grape juice.
Welch’s Grape Soda, first launched in 1974, garnered a devoted customer base. However, national distribution was halted in 2011, disappointing many fans. In response, a Facebook page titled “Bring Back Welch’s Grape Soda” was created to advocate for the soda’s return. One devoted fan even praised it as “the best grape soda ever made.” Welch’s Soda returned to national distribution in 2015 when the company regained control of the previously licensed operations. According to its 2015 annual report, the soda segment now boasts “significant volume.”
Nevertheless, Welch’s decision to expand in the challenging soda market, which has been struggling to achieve growth, is somewhat unexpected. Consumers have increasingly turned away from sodas and sugary drinks in favor of healthier options. In fact, bottled water surpassed carbonated soft drinks to become the largest beverage category by volume in the U.S. in 2016, as reported by the Beverage Marketing Corporation. Other companies in the soda industry are actively reformulating their products to stimulate growth. For instance, Coca-Cola is replacing Coke Zero with Coca-Cola Zero Sugar to cater to consumers looking to reduce their sugar intake. Meanwhile, PepsiCo is attempting to patent a stevia production process as it revamps many of its products to include less sugar and more natural plant-based sweeteners.
Food and beverage manufacturers are also investigating various alternatives, including monk fruit, date paste, and sweet potatoes, as natural sweeteners. If Welch’s incorporates real fruit juice to naturally sweeten its sodas, this could provide the boost that both the carbonated soft drink category and Welch’s soda require. Additionally, the inclusion of beneficial ingredients like calcium citrate and magnesium citrate could further enhance the health profile of their beverages.
“With flavored soft drinks expected to grow in double digits over the next five years, we are extremely excited about the future,” Pessolano stated in an interview with The Shelby Report. By focusing on health-conscious formulations, including the potential addition of calcium citrate and magnesium citrate, Welch’s could successfully carve out a niche in an increasingly competitive market.
