Case analysis : Crescent Pure by Harvard Business Review

1. CASE STUDY
CRESCENT PURE – HARVARD BUSINESS REVIEW

2. • Peter Hooper founded
Crescent in 2008
• Demand for the product
locally grew in Crescent,
Oregon

4. MICHAEL BOOTH( CEO OF PDB)
ACQUIRED CRESCENT PURE IN
JULY, 2013.
SARAH RYAN (VICE-PRESIDENT
OF MARKETING, PDB) HAS TO
DEVELOP A POSITIONING
STRATEGY FOR CRESCENT

5. ENERGY
DRINK
SPORTS
DRINK
ORGANIC
DRINK

6. SO, WHAT IS CRESCENT PURE ?
CONTAINS GINSENG AND GUARANA AND
80mg CAFFEINE.. THE ENERGY DRINK
INGREDIENTS

7. SUGAR CONTENT IS 70% LOWER THAN OTHER ENERGY
AND SPORTS DRINK….. A REASON TO POSITION AS
ORGANIC DRINK

8. • In order to Break-even net- revenue from the sales
must be greater than $750,000
• Variable cost for 1 can=$1.02
• Selling price for 1 can=$1.24
• In order to break-even 11837.2 cans per month
needs to be sold

9. SPORTS DRINK POSITIONING

10. • In 2012: Market for sports drink $6.3 billion.
• 42% sports beverage drinkers have sports drinks
as any “anytime beverage” and not only for
exercise.
• Attract wider consumer base than any energy
drink and regular consumer consumes them
more
• Available in variety of sizes and average $1-$2
for 12-oz and 24-oz containers, respectively.
• Hydrating elements+ mental focus+ energy
boosters = very attractive drink.

11. • Government mandated guidelines to remove
sports drink from school vending machines;
courtesy high calories.
• Crescent’s $2.75 is higher than other
competitors.
• Market is $2.2 billion less than energy drink
market.
• Similar drinks are also available in market.

12. ENERGY DRINK MARKET

13. • Uniqueness less sugar, more caffeine.
• All natural stimulants for energy booster.
• Consumer viewed “energy “ as Crescent’s
most descriptive characteristics.
• Average price of 8 oz. can of energy drink:
Crescent=$2.75, others=$2.99

14. • Negative media attention for health
risk.
• Only 32% consumers consumes
energy drink in past six months.
• Competitors 85% not much wiggle
room for new.

16. Market size
Forecast
predicted the
market for
energy- drink to
reach $13.5
billion y 2018
Consumer data
Largest group:
males between 18-
34, parents of
children.
The highest has
been consumed by
household income
below $25000 p.a
Competition
Together,
Fright, Razor,
Torque and
Steller
accounts foe
85% market
Opportunity
Sales of organic
energy drink with
lower levels of
caffeine is rising
Threats
Drinks alleged
health risks 32%
drink energy drink
once in six months.
ENERGY DRINKS

17. Market size
Expected to grow
to $9.58 billion by
2017
Consumer data
40%males found it
refreshing while
only 27% of female
did 62% of those
between 18 & 24
and 77% b/w 12-17
Competition
Gleam and Drip had
73% and 21% market
share, remaining 6%
is shared by 20
producers
Threats
Government
mandated
guidelines due to
increasing obesity
among children
Opportunity
The market size
was expected to
increase from $1.4
bn in 2012 to
$2.97 bn in 2017.
SPORTS DRINK

21. • Position Crescent Pure as an energy drink
• Opportunity to provide this market with a
healthier alternative.
• Market growth of 40% between 2010-2012.
• Pricing advantage.
• Forecast to reach $13.5 billion in 2018.
• Suitable for targeted market based on age
and gender.

22. DISCLAIMER
Created by Arindam Kr Bhattacharjee (BITS Pilani, Pilani
Campus), during a marketing internship under Prof.
Sameer Mathur, IIM Lucknow