CRESCENTPURE

A Case Study on

B Y K R I S T Y C O O P E R F R O M T H I N K B I G

COMPANIES INVOLVEDPORTLAND DRAKE BEVERAGES01Manufacturer of organic juices & sparkling waters

Revenues increased to $120.5 million by 2012

CRESCENT PURECrescent is a non- alcoholic functional beverage.

The drink was a combination of energy-enhancing, hydrating, and

all-organic ingredients.

PDB acquired Crescent with an aim of expanding and maximising

revenues.

02

CURRENT SCENARIO

Production capacity constraints prevented PDB from

launching the Crescent Pure drink nationally until early 2015.

Hence, PDB planned on a "soft launch" of Crescent in

California, Oregon & Washington in January 2014.

PDB projected that these three states represented 15% of

national functional beverage demand.

PDB has allocated $75,000 on ads and has targeted to atleast

breakeven in the first year.

PEOPLE INVOLVED1

4

3

2

Michael Booth : CEO,PDB

Sarah Ryan : Vice President - Marketing, PDB

Matt Levor : Director of Market Research

Peter Hooper : Developed Crescent Pure

CRESCENT HISTORYFounded by Peter Hooper, a native of Crescent, Oregon in 2008.He wanted to make a refreshing, energizing drink that enhances

mental focus.He manufactured & distributed the drink from a rented warehouse

in Portland, Oregon.Crescent benefited from launching in a region that embraced the

“locavore” movement.After promotion at farmer's markets & local food shows, the

demand grew. The company was selling 1,000 cases per month.

The drink retailed for $3.75 for an 8-ounce can.

INGREDIENTS OF CRESCENT PUREEach can contains an 80 - calorie serving

For flavor, Crescent contained lime juice, lemon juice, and small

amounts of raw cane sugar and green tea.

Energy stimulants included guarana (a plant native to South

America whose seeds contained roughly double the

concentration of caffeine found in coffee beans) and ginseng,

an herbal supplement known to relieve fatigue and boost

concentration and endurance.

A dash of fine-grain salt delivered electrolytes with each

serving.

All Crescent ingredients were “certified organic”.

WHY CRESCENT PURE?Low calorie beverage01

70% less sugar than leading energy andsports drinks.

02

03

04

Contains as much caffeine as one cup of coffee.

Certified Organic

PROBLEMS

What is the optimal brand positioning?

01

Selecting the right distributors according to thechosen brand positioning.

02

Energy-drink positioningSports-drink positioningOrganic and healthy-drink positioning

03 Will PBD breakeven after the first year?

PRODUCT POSITIONING OPTIONS (1/3)

ENERGY DRINK

Age group : 18-34Top six players account for 85 % of therevenueRising sales of healthier beverage choicesNegative perception campaigns highlightshealth risks

(Avg Price : $2.99/can)

PRODUCT POSITIONING OPTIONS (2/3)

SPORTS DRINK

Age group : 12-24Top two players account for 96% of the revenueRising sales of healthier/low sugar beveragechoicesNegative perception campaigns highlightsincreasing obesity rates

(Avg Price : $1-$2/can)

PRODUCT POSITIONING OPTIONS (3/3)

ORGANIC DRINK

Age group : All agesNew emerging marketHigh inclination amongst consumers to go forhealthier and natural product alternativesHigher budget required for advertising

(Avg Price : 25% Premium)

CONSUMERANALYSIS

CONSUMER DEMOGRAPHICS

PERCEPTUAL MAP (1/2)

PERCEPTUAL MAP (2/2)

CONSUMER REACTIONS

RECOMMENDATIONCrescent Pure should be positioned as a organic and healthier

alternative to other energy drinks. The reasons are:

The market for energy drinks has grown by 40% in two years The average price for 8 oz. of energy drink is $2.99, which is

above the $2.75 price of Crescent PurePriced at $2.75 for 8 ounce can it is quite low in the $13.5

billion energy market while it is a premium price in the $6.5billion sports market.

Major national food and beverage companies are gearing up tolaunch their own organic beverages in 2015, which is a year

after the launch of Crescent Pure.

FINANCESAdvertising Budget01Cases sold per month02Cases sold annually03Drinks per case04Manufacturer's wholesale price to distributors05Variable cost to manufacturer per case06Manufacturer margin07Manufacturer margin %06

$750,00012,000

144,00024

$29.76$24.48$5.2818%

Breakeven cases

Capacity Overage

Profit from capacity

142,045.45

1,954.55

$10,320

PDB BREAKS EVEN!

PROFIT MARGIN ANALYSISManufacturer

Distributor

Retailer

18%

25%

40%

$1.24

$1.65

$2.75

DISCLAIMERThis presentation is made by Akankshi Mody, DJSCE - Mumbai, as

part of a marketing internship by Prof. Sameer Mathur, IIM Lucknow