A wide variety of companies are adding new flavors.
Pepsi has recently introduced Pepsi Hot Chocolate, Pepsi Peeps, and Pepsi Apple Pie.
Anheuser-Busch introduced the Bud Light Seltzer Retro Summer Variety Pack with retro flavors like Blue Raspberry and Cherry Limeade. These flavors were also released as Bud Light Seltzer Frozen Popsicles.
In many cases, instead of using a totally new flavor, these new flavors combine two established flavors, like Mountain Dew and Flamin’ Hot Cheetos.
Additionally, many product offerings are Limited Time Offerings (LTOs)—they are intended to only be offered for a short period of time.
This post is based on the SimpleMost article, Mountain Dew Released First-Ever Flamin’ Hot Soda, by Kaitlin Gates, September 3, 2021; the Fast Company article, Pepsi Apple Pie and Candy Kraft Mac & Cheese: Why food giants are designing extreme new flavors, by Mark Wilson, May 7, 2021; and the YouTube videos in the Spotlight. Image source: viennetta/iStockphoto/Getty Images.
1. Why use Limited Time Offerings (LTOs)?
Guidance: The use of LTOs can generate increased interest in the brands. For example, Pepsi is a well-established brand, but introducing Pepsi Peeps created a great deal of buzz in social media, as well as traditional media.
If one of these flavors becomes extremely popular, the company can introduce it as a regular product. LTOs give companies a chance to test run their production and supply chain processes before making a permanent introduction.
2. What are the operational/supply chain issues with LTOs?
Guidance: The biggest problem with LTOs is developing the manufacturing and supply chain processes for new items. Additionally, items will only be produced for a short period of time, so companies may not wish to invest in new equipment, or develop new suppliers.
Because they don’t have historical demand data, it can be difficult to forecast demand. This problem impacts the entire supply chain.