Pepsi Breathes Life into the Night Time Soft Drink Concept

Soft drink innovation in Japan is often on a different level than that in other world markets, making it difficult to judge whether or not a specific launch is evidence of something big or just a fad. GlobalData analyses whether Suntory's recent launch of Pepsi J-Cola Midnight in Japan could be evidence that global soft drink manufacturers have bigger plans in store for night time beverages.

If you want really odd soft drink innovation, Japan has always been the place to go. Where else can you find a soft drink inspired by Christmas cake or one that tastes like salted watermelon? Suntory, the Japanese producer of Pepsi, is continuing that legacy of Japanese innovation with its J-Cola line of Pepsi brand soft drinks intended to appeal to local tastes guided by its biggest fans. As part of this concept, Suntory polled 100 "cola-loving consumers" to reveal their preferences and guide its new product innovation.

Approximately half of Suntory's respondents said that they regularly drank Pepsi during the evenings and at night. This proved to be the inspiration for Pepsi J-Cola Midnight, a new version of Pepsi with the "aromatic flavour of cassis" (more familiar to Westerners as blackcurrant). The drink is intended to help consumers enjoy "a lingering evening scene."

J-Cola Midnight: Daypart drinks find a younger audience

Suntory's research into the late-night consumption habits of "cola-loving" consumers in Japan echoes a consumer survey finding that GlobalData stumbled onto three years ago regarding daypart preferences. GlobalData's 2015 Q4 global consumer survey asked consumers how appealing they found a food or drink product advertised for consumption at a specific time of the day or night. The survey result found broad support for the concept, especially among younger consumers. These younger shoppers (18–34 year-olds) were somewhat more likely than consumers overall to find this concept appealing, by a 32% to 27% margin.

But where this gets interesting is isolating regular consumers of carbonated soft drinks from everyone else. This group were even more inclined to say that food or drink targeted for consumption at a specific time of day or night was appealing. Among 18–34 year-olds globally who are regular consumers of carbonated soft drinks, 36% said daypart-oriented food or drink was appealing versus 32% of regular soft drink consumers of all ages. Any hope of a turnaround in carbonated soft drink sales is going to need a catalyst. The consumption preferences of younger consumers showing support for daypart-oriented products may be just the catalyst that carbonated soft drink makers are looking for.

Kickstarting late-night soft drinks: Mountain Dew pushes non-traditional beverage sales

Given these results, it is surprising that more carbonated soft drink manufacturers have not made more of an effort to target night-time consumption. One of the few to do so was PepsiCo, which launched Mountain Dew Kickstart in the US in 2013 as a caffeinated soft drink product aimed at morning consumption. The brand was extended a year later with two "energizing" flavours geared toward night-time consumption – black cherry and limeade. Though the latter flavour is no longer around, Kickstart quickly advanced from $100m in sales its first year to over $300m two years later – rare positive momentum in a global market seeing major challenges for soft drinks. Most recently, PepsiCo launched Mountain Dew Kickstart Ultra Original with no added sugar, 91 milligrams of caffeine, and just five calories per can (16 fluid ounces).

Night-time variants may help soft drink companies connect with younger consumers while leveraging the tendency of food and drink choices to become more indulgent as the day goes on. There is a reason why dessert is an option after dinner, but not breakfast. Night-time consumption also dovetails with the evolving consumption habits of younger consumers.

The fast-food industry has made late-night dining a focus of innovation efforts for at least the last half-decade, especially in the US where late-night food appeals to shift workers and the after-bar crowd. Late-night tends to cater to young adults who – as a group – may be more willing to enjoy a late meal or snack than older people. Marketing a soft drink to these night owls may make sense as a way to shift this group away from competing beverages like alcoholic beverages.

Kickstart quickly advanced from $100m in sales its first year to over $300m two years later

Soft drinks geared toward a specific daypart have proven that they can steal sales from other types of drink. After PepsiCo launched Mountain Dew Kickstart, the company found that about 10% of the brand's sales were coming from beverages outside of traditional carbonated soft drinks, like coffee or tea. An innovation push into flavours that tend to be associated with dessert or indulgence might be able to accelerate this sort of switching.

Pepsi and other brands thinking about mining the night-time niche will have to overcome some negativity on the health front around the subject of sleep. The National Sleep Foundation in the US partly blames poor sleep on late-night soft drink consumption. According to the foundation, people who drink a lot of sugary, caffeinated drinks at night tend to sleep for five or fewer hours per night, which is far less than ideal. The National Sleep Foundation recommends that adults sleep at least seven hours per night.

If you want really odd soft drink innovation, Japan has always been the place to go. Where else can you find a soft drink inspired by Christmas cake or one that tastes like salted watermelon? Suntory, the Japanese producer of Pepsi, is continuing that legacy of Japanese innovation with its J-Cola line of Pepsi brand soft drinks intended to appeal to local tastes guided by its biggest fans. As part of this concept, Suntory polled 100 "cola-loving consumers" to reveal their preferences and guide its new product innovation.