Canada Dry ginger ale jumps on energy drink craze... sort of

Canada Dry goes from the farm to the gym in its new ads.

Who says you have to be an energy drink to advertise like one?

Canada Dry, part of the Dr. Pepper Snapple Group Inc. portfolio of brands, is making a push with the sporting crowd as the popularity of energy drinks grows among consumers. But it's not actually launching a new energy drink.

The ginger ale brand has previously pushed a message about relaxation in ads focused on the drink's ginger-farm roots. It's now turning to scenes from the gym for its latest spots, which will debut Monday on ESPN and NBC Sports. But the ads still hang on to their "relaxation" theme.

Consumers are increasingly turning away from traditional carbonated drinks and toward beverages like energy drinks. Cowen & Company analysts suggested last month that Coca Cola Co. KO, -1.01% acquire the remaining stake in Monster Beverage Corp. MNST, -2.67% in order to take full advantage of this trend.

"While consumers are clearly showing increased concern over sugar consumption, the consumer has not rejected sugary beverages outright as we consistently see outsized growth for sugar beverage categories that also offer consumers a functional benefit to help justify that sugary beverage occasion," analysts wrote in a note.

Read also:It's time to sell Coke and P&G stocks, Goldman says

The new ad also comes on the heels of an upgrade of Dr. Pepper Snapple DPS, -0.43% by Goldman Sachs.

"While in general we do not favor large companies buying into growth, we believe the recently announced acquisition of Bai, should it close on announced terms, is a strategic fit that could bolster Dr. Pepper Snapple's sales growth and de-risk a potential distribution loss that could occur if Bai is sold to another company," the Monday note said.

Bai is a line of antioxidant beverages made with "smart sweeteners" like those from the Stevia leaf.

Analysts also believe that Dr. Pepper Snapple is well-positioned if tax policies change.

"[I]n the even broader tax policy changes occur as currently proposed, Dr. Pepper Snapple would be a relative beneficiary given its current high tax rate (35%), limited mismatch from a destination-based tax perspective, and low likelihood of sizeable incremental debt post the announced Bai acquisition," the note said.

Dr. Pepper Snapple shares closed down 0.4% on Monday, and are down 2.1% for the past 12 months. The S&P 500 index SPX, -0.35% is up 18.1% for the past year.