Keurig Dr Pepper launches Pepper Perks loyalty program

Dive Brief:

Keurig Dr Pepper announced the Pepper Perks loyalty program for its Dr Pepper brand. Fans of the soda who sign up for the program scan the receipts of Dr Pepper purchases to earn points and win rewards.
As part of the launch of Pepper Perks, members will have the opportunity to receive the new limited-edition Dr Pepper Fantastic Chocolate flavor, once they earn a qualifying amount of points. They will also be able to redeem prizes such as branded merchandise and enter for a chance to win a trip to the College Football Playoff National Championship game.
Keurig Dr Pepper is looking to reward its frequent buyers with exclusives such as new flavors, which have proven popular with the soda category's young core customer base.

Dive Insight:

With the launch of Pepper Perks, Keurig Dr Pepper is looking to harness the power of brand loyalty. This move comes after CEO Robert Gamgort said in the company's second-quarter earnings call that Keurig Dr Pepper grew its share of liquid refreshment beverages over the previous two years thanks in part to a 1.4-point share increase in soda. Net sales overall rose 9.6% in the quarter.

While overall soda consumption was on an overall downward trend before 2020, it faced a steeper decline amid the pandemic as many foodservice venues were shuttered. Concentrate sales of Dr Pepper, used in restaurants and live event spaces, declined by more than 6% i n 2020. Despite this, Dr Pepper showed modest growth during the year, according to Beverage Marketing C orp., buoyed by an increase in sales of its packaged soda.

Keurig Dr Pepper has been looking to innovate since its $19 billion merger in 2018. The soda, water, tea, and coffee giant has increased its brand portfolio by 20%, and last fall restructured its coffee and cold drinks division and hired its first president of cold beverages.

The Pepper Perks rewards program could provide the beverage maker with an opportunity to solidify brand loyalty among some of its most frequent Dr Pepper consumers. A recent study by Merkle found that 81% of consumers wanted to form a relationship with brands. Meanwhile, 58% of respondents said that special offers and prizes are the most important ways for brands to recognize their loyalty as customers.

Loyalty programs have been launched by other soda brands such as Coca-Cola and Pepsi, which have also offered rewards such as football jerseys and event tickets, and used exclusive access to flavors as a perk. In 2019, Coca-Cola launched its Insiders Club, a $15 monthly subscription service that gave loyal fans a first taste of new or limited-edition products and flavors. This gave the company the opportunity to test new products before they hit shelves, and the response “exceeded” the company’s expectations, according to digital experiences manager Alex Powell. It was relaunched early this year for a limited time.

Launching Pepper Perks with the limited edition Fantastic Chocolate variety shows that Keurig Dr Pepper sees the value of flavor with the core soda consumer — Gen Z, whose beverage consumption is 20% soda. It’s a tool that Coca-Cola has leveraged by launching flavors like Orange Vanilla and Cherry Vanilla. In March, Pepsi debuted its first addition to its permanent lineup in five years with a mango flavor of its flagship soda. Pepper Perks also will give Keurig Dr Pepper an opportunity to pilot new varieties of its soda before deciding whether to make them permanent.