Cheerwine goes rogue in setting marketing strategy

Cheerwine, the Salisbury-based cherry soft-drink maker, has embarked on a provocative marketing approach amid a campaign to take its brand national by 2017.

Early this month, it parted ways with Boone Oakley of Charlotte, its ad agency of record for only the past 10 months, and reached out nationally to the creative community for ideas about promoting Cheerwine.

More than 1,000 replies were received, vice president of marketing Tom Barbitta told the American Advertising Association/Charlotte in a presentation Thursday at La Paz, and about three dozen professionals in a variety of specialties have been engaged to work on a long-term campaign. About 60 ideas are in development.

Barbitta said Cheerwine is looking for a long-term platform message for its product. Geico’s gecko ads, for example, is a good campaign but it doesn’t have the endurance of, say, Nike’s “Just Do It” messaging that launched in 1988, he said.

“That has to do with their essence, what they stand for,” Barbitta said. “A platform is a very big, enduring idea and draws upon multiple aspects of the brand.”

Cheerwine was invented in Salisbury in 1917 by L.D. Peeler, a general store owner. His great grandson, Cliff Ritchie, now leads the family-owned company and fifth-generation family members are working in the business.

Concerns about approach

Barbitta’s presentation drew conflicting reactions from the group, formerly known as the Charlotte Ad Club. Some found Cheerwine’s crowd-sourcing approach revolutionary, while others were concerned about broader trends toward undervaluing the work of experienced professionals, Marcie Kelso of Kelso Communications and president of the AAF/Charlotte said Friday.

Cheerwine has less than a 1 percent share of the crowded national soft-drink market and about a 3 percent share in the Carolinas, Barbitta said. It aims at a youth and young adult market.

About 70percent of the soft-drink market is controlled by giants Coca-Cola and Pepsi, followed by the Dr Pepper Snapple Group at 17 percent. Energy drinks, teas and bottled waters are growing more popular among consumers and soft-drink manufacturers have seen overall consumption drop for the past nine years, with carbonated-drink sales falling 3 percent in 2013, according to Beverage Digest.

Slurpees for millennials

In 2011, Cheerwine entered a partnership with Pepsi Bottling Co. to distribute its product outside the Carolinas and it is now available in 20 states, mostly in the Southeast and the West. Barbitta said the strategy is to start on the coasts and close in on the middle.

To attract millennials, the company is test-marketing Cheerwine in a Red Bull-shaped 12-ounce can in the Pacific Northwest with the company’s venerable cane sugar formula usually available only in the glass bottle version. It also has launched a Slurpee version through 7-Eleven and an Icee version through other convenience retailers.

Barbitta said research shows Cheerwine is a “passion product” among its customers. One advantage the company is trying to leverage in appealing to the youth market is its “authenticity” as an outlier brand, the longest-owned family soft drink in the nation.

In its core branding, the company uses the slogan “Legend” and “Born in the South, raised in a glass.”