Our client is RefreshNow! Soda. RefreshNow! is a top 3 beverage producer in the U.S. and has approached McKinsey for help in designing a product launch strategy.
Description of RefreshNow! Soda
As an integrated beverage company, RefreshNow! leads its own brand design, marketing and sales efforts. In addition, the company owns the entire beverage supply chain, including production of concentrates, bottling and packaging, and distribution to retail outlets. RefreshNow! has a considerable number of brands across carbonated and non-carbonated drinks, 5 large bottling plants throughout the country and distribution agreements with most major retailers.
RefreshNow! is evaluating the launch of a new product, a flavored non-sparkling bottled water called O-Natura. The company expects this new beverage to capitalize on the recent trend towards health-conscious alternatives in the packaged goods market.
RefreshNow!’s Vice President of Marketing has asked McKinsey to help analyze the major factors surrounding the launch of O-Natura and its own internal capabilities to support the effort.
QUESTION 1: What key factors should RefreshNow! consider in deciding whether or not to launch O-Natura?
A good answer would include the following:
Consumers. Who drinks flavored water? Are there specific market segments to address?
Cost/Price. Is the flavored bottled water market more profitable than those markets for RefreshNow!’s current products? Is it possible to profitably sell (price set by the market, internal production costs) O-Natura? Given fixed costs involved, what would be the break-even point for O-Natura?
Competitors. Which products is O-Natura going to compete with? Which companies are key players and how will they react?
A very good answer might also include multiple additional key factors RefreshNow! should consider. For example:
Capabilities and Capacity. Are the required marketing and sales capabilities