New ‘Draft’ Soft Drink Stirs a Brouhaha : Beverages: Critics charge Royal Crown’s new cola is advertised as if it were beer, sending wrong signal to young.

Royal Crown Cola Co., which introduced a “draft” cola in an bold bid to grab market share from Pepsi and Coca-Cola, is scrambling to defend the week-old product against criticism that its amber, long-necked bottle sends teen-agers a signal that drinking alcohol is “cool.”

The staunchest attack came Tuesday when Lee Brown, the nation’s drug czar, compared Royal Crown Draft Cola to a bottle of beer. “How can one tell which one is the beer and which one’s the soft drink?” Brown said on NBC’s “Today Show.” “This is cultural seduction of our kids.”

A spokesman for Brown said that he plans to meet with representatives of Royal Crown in Washington next week to further discuss the soft drink’s bottle and labeling.

“Our concern is that it is glamorizing and marketing adult behavior to kids,” said a Brown deputy, Fred Garcia. He said the beverage is an example of Brown’s concern with the proliferation of so-called “look-alike” products, such as bubble gum shredded to look like chewing tobacco.

Royal Crown argues that its soft drink is not a beer substitute and that worries about its impact on teen-agers are overblown. However, as a concession to critics, the company has agreed to downplay the word “draft” on its label.

“This is a premium product and it comes in a premium package,” said Donald B. Lenehan, Royal Crown’s senior vice president of marketing. He said root beers and ginger beers are frequently sold in dark-colored bottles, “and no one has a problem with that.”

Even though the controversy is generating free publicity for the new product--marketed on a shoestring budget--Royal Crown can ill afford to ignore the criticism because the drink is key to its corporate revival.

Ft. Lauderdale, Fla.-based Royal Crown rolled out the draft cola in Los Angeles and New York a week ago amid high expectations. The beverage has a foamy head similar to draft root beer and retails for around $4 per six-pack--about the same price as low-end beer.

RC’s share of the nation’s soft drink market has plummeted over the last 10 years to less than 2% from about 5%, due largely to lack of marketing and product development, analysts said. Until two years ago, the company was part of the empire of corporate raider Victor Posner. Posner in 1993 sold his stake in RC’s parent company, now called Triarc, to investors Nelson Peltz and Peter May of Triangle Industries.

The draft cola is aimed at the fast-growing premium beverage market dominated by so-called New Age beverages, such as Quaker Oats’ Snapple and Coca-Cola Co.’s Fruitopia.

Jesse Meyers, editor of the Connecticut-based Beverage Digest newsletter, said RC is targeting “twentysomething” men who think draft is “cool” and older men looking for an authentic beverage.

John Carson, president of Royal Crown, said the draft cola could account for as much as $750 million in sales in three years.

Even as it hit the shelves, the new cola ran into static from anti-alcohol abuse groups, such as Mothers Against Drunk Driving. Royal Crown met with concerned groups in Dallas and in Los Angeles about two weeks ago but failed to diffuse their objections.

Karen Kullie, executive director of the Los Angeles chapter of MADD, said an upcoming TV spot for the soft drink is laden with beer imagery.

According to Kullie, the commercial is set in a bar where a neon sign flashes the word draft while a voice-over announces: “There’s a new draft in town.” At the end of the commercial, the word cola flashes on.

“I do not object to draft root beer or to draft cola,” Kullie said. “But this commercial, with the neon sign in the window of a bar, the association is obvious and intentional. To me, an under-age drinker will say, ‘I can drink this and feel as cool as if drinking a beer.’ ”

Lenehan said that the spot, created by its ad agency, GSD&M; of Austin, Tex., is not intended to make a connection between the soft drink and beer. He said that it was intended to convey that the soft drink is “for adults, that it is a cool, premium product.”

In a concession to critics, the company has agreed to run the TV spot only after 9 p.m., Lenehan said. RC is modifying its label, he said, to make the word cola larger and draft smaller. He said the company doesn’t expect further changes.

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Far Behind

Royal Crown Cola Co. is launching a draft cola, the industry’s first, in hopes of boosting its distant fourth position in U.S. soft-drink market share. Percent of total industry sales in 1994:

Coca Cola Co.: 40.7%

PepsiCo Inc.: 30.9%

Cadbury Schwepps: 16.4%

Royal Crown: 1.7%

Other: 10.3%

Source: Maxwell Report