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A Rebranding Debacle
A few weeks ago, we spoke about Burger King’s successful rebrand. Today we’ll walk through one of the worst rebrands in history and what we can learn from it.
The Origin Story
In 1947, Antony T.Rossi started his company ‘Tropicana Orange Juice’ in Florida. He distributed fresh orange juice by way of hand-delivered juice jars. Soon after, Rossi invented and patented a pasteurization process that allowed pure, chilled juice to be shipped and stored without refrigeration. This catapulted Tropicana’s growth, making it a household name throughout the US.
In 1998, PepsiCo acquired Tropicana as part of its portfolio expansion to beverages and snacks. Even though it had rivals (such as Coca-Cola’s Minute Maid), Tropicana had a 72% market share in the highly profitable “not from concentrate" juice segment.
Given its market share, Tropicana enjoyed high brand recall amongst its consumers, which includes most American households.
Redesigning a Legacy Brand
Sometime in 2008, PepsiCo Americas CEO Massimo d'Amore decided to redesign 7 brands including Pepsi, Gatorade, Tropicana, and Mountain Dew. And he wanted it all done before the Super Bowl of 2009 -- an ambitious deadline that included the redesign of 1,121 different bottles, cans, and other packages.
He hired Peter Arnell - a branding and design expert and gave him the task of making the products “elegant”, citing Apple as a key inspiration.
“The objective was very, very clearly laid out. We needed to rejuvenate, reengineer, rethink, and reparticipate in popular culture.” — Arnell, 2009
Arnell and Massimo’s vision showed up in refreshed Tropicana designs. Historically, the package always showed the outside of the Orange. Arnell wanted to show the product, the actual juice, on their most powerful billboard— its packaging.
Here’s Arnell explaining the new design:
With not enough time for substantive pre-market testing, the design ended up being built mostly in a silo, with little input from the most important voice in the room - the customer.
Having completely divorced themselves from the average American consumer (raising a family on an income of about $40,000 a year, far from the Cipriani Venice), they decided that Pepsi should be about themselves. Soda is a dollar-store, grocery-coupon business. It's also good for diluting rum and bourbon. Yet somehow d'Amore et al. concluded that "elegance" was the key to the brand.
Tropican(a) to Tropican’t
The redesign cost Tropicana $35 million. The biggest change was its visual identity - moving from an ‘orange with a straw’ to a transparent glass of juice.
This made the brand unrecognizable to its customers, who were habituated into seeing a specific design. The slogan, “Pure Premium”, was replaced by “100% Orange”, which confused customers further. People began to question if the product itself had changed (it hadn’t).
As a result, sales dropped 20%, with customers moving to recognizable competitors. Within 2 months and over $30 million in losses, Tropicana announced that it would return to the old version of its packaging.
This mistake cost PepsiCo over $50 million. This doesn’t account for lost market share and reduced customer loyalty, which are far harder to quantify.
Takeaways
The obvious one is that it’s important to speak to your customers, but it is far more important to speak to the right ones. Passionate loyalists can be your biggest advocates and critics. Instead of experimenting with this cohort, bring them along your journey to strengthen your product and marketing strategy.
When it comes to change, it’s important to understand when to choose between evolutionary and transformational change. Evolutionary change is incremental and happens over time. Tropicana could have eliminated customer confusion by introducing new design elements in existing packaging over a period of time, deliberately preparing its customers for a full redesign.
Choose your inspiration carefully. Tropicana needed to understand how consumers perceived & interacted with the brand. Apple was an inspiration, but unlike Apple, Tropicana shows up on the aisles of convenience stores and refrigerators of everyday American homes. For everyday brands, consumers are more likely to value convenience over elegance.
Product Packaging is your silent salesman. In technology, it shows up in key buyer decision surfaces - landing pages, e-commerce websites, Google Playstore/Appstore, and UI surfaces within the app. It reflects your positioning, creates customer habits, represents your company’s values, its legacy, and its aspiration — sometimes all at once. The best marketing strategy is a good product. The best sales strategy is a good package.
And finally, when someone in your company floats the idea of a rebrand, understand the motivation behind it. What business problem are you solving for - Is it declining sales, category position, and growth? Is it a reaction to reputation and trust issues? Or is it because a marketing leader needs to be seen as a ‘visionary’? Career progression tactics disguised as ‘rebranding exercises’ can result in costly lessons for everybody.
Until next week,
Shrikala