Authors: ZMUDA, NATALIE Source: Advertising Age, 4/4/2011, Vol. 82 Issue 14, p1-90, 2p Document Type: Article Subject Terms: PRODUCT launches MARKETING strategy NEW product development PEPSICO Inc. — Marketing SOFT drinks — Marketing COLA drinks Abstract: The article considers the product launch of the Pepsi Next brand soft drink by beverage industry firm PepsiCo scheduled for the summer of 2011. The soft drink is a so-called mid-calorie soft drink sweetened with a blend of high-fructose corn syrup and artificial sweetener.
The launch is considered in terms of PepsiCo’s attempts to reverse a decline in the market share of its cola soft drinks.
Lexile: 1350 Full Text Word Count: 1028 ISSN: 00018899 Accession Number: 59780598 Persistent link to this record (Permalink): https://ezp. lib. unimelb. edu. au/login? url=https://search-ebscohost-com. ezp. lib. unimelb. edu. au/login. aspx? direct=true&db=f5h&AN=59780598&site=eds-live Cut and Paste: <A href=”https://ezp. lib. unimelb. edu. au/login? url=https://search-ebscohost- com. ezp. lib. unimelb. edu. au/login. aspx? irect=true&db=f5h&AN=59780598&site=eds-live”>Can Pepsi’s mid-cal Next revive its cola category? </A> Database: MasterFILE Premier Can Pepsi’s mid-cal Next revive its cola category? Soft-drink giant to launch 60-calorie line this summer In a bid to stem the cola exodus, PepsiCo will give mid-calorie colas another shot with a new product coming this summer. The soft-drink giant plans to launch in July or August a 60-calorie-per-can cola dubbed Pepsi Next, according to Beverage Digest. It’s expected to be sweetened with a blend of high-fructose corn syrup and artificial sweeteners.
It’ll be the brand’s third try at such a product, and the key to success will be articulating where Pepsi Next fits in an ever-expanding portfolio of Pepsi sodas. PepsiCo declined to comment but John Sicher, editor and publisher of Beverage Digest, said the goal is clear: “Pepsi and Coke need to keep consumers drinking their colas. ” By Beverage Digest’s count, in 1995, colas accounted for about 65% of the carbonated soft-drink business in the U. S. Today, it’s about 55%. “When some consumers switch from regular colas, they try diets, don’t like the taste and move on to water or other categories,” Mr.
Sicher said. “This is an attempt by Pepsi to come up with another tool to keep consumers in their cola franchise. The theory is that a mid-cal can taste better than a diet to some consumers and appeal to consumers who are moving away from the regular brands. ” Key to the success or failure of Pepsi Next will be messaging, considering its growing array of choices-Pepsi, Diet Pepsi, Pepsi Max and now Pepsi Next. While the propositions of “regular” and “diet” are well understood, it gets murkier with mid-calorie products.
Consumers who have become used to the idea of Pepsi Max, “Zero Calories, Maximum Taste” and Coke Zero, “Real Coca-Cola Taste, And Zero Calories,” could easily be confused by the proposition of a mid-calorie cola. Indeed, mid-calorie colas, which typically contain half the calories of a traditional soda and are sweetened with a blend of high-fructose corn syrup and artificial sweeteners, have a rocky history. In the mid-1990s, PepsiCo launched the short-lived, 70-calorie Pepsi XL, “X” for excellent taste, “L” for 50% less sugar.
In 2004, PepsiCo unveiled 70-calorie Pepsi Edge, while Coca-Cola pushed C2; the brands subsequently disappeared from shelves in 2005 and 2007, respectively. Dr Pepper Snapple Group is testing Dr Pepper Ten, a 10-calorie soda, though it’s positioned to compete with Pepsi Max and Coke Zero in appealing to men. So why try again? “There exists pent-up demand for better tasting lower-calorie products,” said Bill Pecoriello, CEO of Consumer Edge Research. “Our research suggests that a mid-calorie cola could drive incremental volume for carbonated soft drinks. Generally, mid-calorie colas are expected to appeal to a demographic older than full-calorie soda drinkers but younger than those who gravitate toward diets. In theory they’ll appeal equally to men and women, with a sweet spot among 25- to 34-year-olds, according to Mr. Pecoriello. A major advertising and marketing push is said to be planned for Pepsi Next, and there is some speculation that the brand will be involved with Pepsi’s “X Factor” promotion. Pepsi has said it expects to spend more than $60 million on a sponsorship and integration with Simon Cowell’s new singing competition, airing on Fox this fall.
Pepsi Next will need to find a way to speak to a demographic that has been broadly defined in past mid-calorie launches. Pepsi XL targeted 20- to 29-year olds, with an emphasis on men. C2 was aimed at 20- to 40-year olds. PepsiCo claimed that Pepsi Edge had a market of as many as 60 million “dual-users,” drinkers of both regular and diet soft drinks. Both Pepsi Edge and C2 received major advertising support, with C2, at the time, ranking as the most lavish launch since Diet Coke in 1982.
Estimates pegged the cost of the C2 launch campaign at $30 million to $50 million. Pepsi Edge tried to appeal to men with spots featuring well-known sportscasters and the tag, “This moment deserves a Pepsi Edge. ” At the time, execs said the brand skewed slightly toward men, with a 55 to 45 male to female ratio, and the thinking was that men were more turned off by female-focused ads than vice versa. C2’s effort was more gender-neutral, using the Rolling Stones’ “You Can’t Always Get What You Want” and Queen’s “I Want to Break Free” in ads. We believe that having a fair amount of skepticism that Pepsi can get the messaging correct on this brand is the right initial position to take,” said Mr. Pecoriello in a research note. “Coke and Pepsi have proven that they struggle to speak to consumers about lower-calorie, better-tasting products. ” A Consumer Edge Research survey found that one-third of consumers age 13 or older are very interested in trying a Coke or Pepsi with half the calories of a traditional soda, under the assumption that it tastes “almost identical” to the existing brand.
A Coca-Cola spokesman declined to comment on Pepsi Next or any plans Coca-Cola might have for a mid-calorie cola. “We do not see Coca-Cola being a quick follower on mid-calorie colas,” said Mr. Pecoriello. “We expect that the company will have a product and marketing plan readied so if Pepsi Next proves successful, they can get to market quickly. … If Pepsi Next were to prove a success, we believe that we could see a Coke mid-calorie by the fall, but, again, we suspect that Coca-Cola doesn’t want to distract its focus from its core three-cola strategy with a mid-calorie launch. Indeed, while Coca-Cola keeps hammering away at its three-cola strategy, some in the industry are wondering why PepsiCo won’t do the same. Diet Coke overtook Pepsi as the No. 2 soda brand in 2010, a year in which Pepsi and Diet Pepsi were the only two top ten carbonated soft-drink brands to lose share. PepsiCo anticipates Pepsi Next will cannibalize other Pepsi trademarks, according to Beverage Digest’s bottler informants, but Beverage Digest’s Mr.
Sicher said, that’s “absolutely OK, if [PepsiCo] is keeping consumers drinking Pepsi colas and, perhaps, recruiting lapsed drinkers. ” For more on the continuing cola wars, go to AdAge. com ~~~~~~~~ By NATALIE ZMUDA, [email protected] com Copyright of Advertising Age is the property of Crain Communications Inc. (MI) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.
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