[Case Study] – How Tropicana lost $65 million because of its packaging design
The “shocking” failure of the Tropicana Corporation in 2009 is one of the most interesting case studies on the importance of product design and packaging.
Tropicana is one of the most famous juice brands in the world and is owned by PepsiCo corporation. On January 8, 2009, the brand decided to completely renew the packaging of its best-selling product across the North American market – Tropicana Pure Premium orange juice.
However, the change quickly met with a fierce reaction from most of Tropicana’s loyal customers. This “change of clothes” program failed so much that PepsiCo’s brand had to rush to destroy the new packaging to revert to the old design soon after.
Some “impressive” figures of this disaster:
Tropicana invested a total of $35 million in design and communication fees for the new packaging, all provided by a third advertising agency, Arnell.
Tropicana Pure Premium, the brand new shirt change is also the group’s most popular product in the North American market with sales of over 700 million USD per year. But just a few days after its implementation, Tropicana was immediately “stoned” by users and strongly boycotted on social networks.
Since the disaster began, Tropicana’s revenue has dropped by nearly 20% for months, or nearly $30 million.
On September 23, 2009, less than 2 months from the start of the campaign, Tropicana announced that the brand would return to the old design, and that the “new shirt” would gradually disappear from the market just a few months later. there.
“Falling in the water”, other competitors like Minute Maid seized the opportunity and immediately took the “urgent” market share from Tropicana.
The immediate campaign cost Tropicana more than $65 million in less than two months, not to mention the long-term harm of losing market share to competitors.
The difference between new and old packaging
To visualize the reason behind this failure, let’s take a look at the difference between new and old packaging.
Wishing to “refresh the brand”, a clear glass of orange juice was used by Tropicana instead of the image of an orange with a straw plugged in as before.
A representative for Arnell explained: “Tropicana has only shown customers the outside of an orange before, but has never put the true “juice” out of the packaging.”
The replaced orange fruit is used as the lid of the box. The idea here is that users will “squeeze oranges” and enjoy a 100% natural product right after.
In addition, the Tropicana logo has also been changed, instead of just “Tropicana” as before, this text is reduced to make room for the product name “Pure Premium” and moved to lie along the box, completely harder to read than before.
The new packaging also comes with a huge marketing program with the content: “Squeeze, completely natural”.
“We didn’t anticipate the great love that customers would have for second-hand packaging, especially among loyal customers, a metric that did not come up at all during market research. The customer is king, so we followed their wishes.” Campbell – Tropicana North America Country Manager explains.
But perhaps this disaster comes from more than just customer attachment, as packaging is one of the biggest influences on branding and retail performance. Changing packaging always causes a loss of revenue in the short term, but there has never been a “crying” result – 20% reduction in sales immediately after the change like Tropicana.
Even many users say that they do not recognize their favorite products when going to the supermarket. The word “100% Orange Juice” is enlarged and horizontal making them wonder if this is still the “Pure Premium” product they usually use or not.
Not only that, because of the “minimalist” and “flat” school, most customers perceive the new packaging as “bad” and seem “cheap” like supermarket brands. For a brand that is always positioned as “premium” like Tropicana, this is no different from a disaster.
Customers always have a special affection for their favorite products, they will always feel “betrayed” and disappointed if they do not recognize familiar brands in new packaging.
Tropicana in its attempt to “modernize” itself violated the ultimate brand rule: New brand familiarity versus old. This brand has changed too many factors at once, making customers hesitate to approach the new packaging:
And the lid of the box is also new.
As the ultimate tool of exchange before customers make a purchasing decision. The Tropicana “gods” decided that they didn’t like the brand and also stopped buying the product.
The Tropicana disaster showed everyone the importance of packaging design. While it’s an extremely negative case study, changing the packaging doesn’t always have the same terrible results.
For marketers, packaging and customer sentiment are more important than ever, change is good, but change for the customer, not change for the sake of change. Tropicana.