Multiple Pepsi bottlers say company develops and considers introduction of caffeinated lemon-lime soft drink with low carbonation. Bottlers refer to it as "Storm"; but uncertain if "Storm" is product's brand-name or internal project-name. Top-10 Pepsi bottler: "It's there, it's been researched, and I hear they have some test markets identified." Bottlers say product designed to compete with Sprite and 7UP "with a point of difference: caffeine." Sprite is industry's fastest growing brand (BD 2/7/97). Pepsi bottlers: 1) "Storm is high on Pepsi's radar screen, it's a good idea." 2) "If they do it, it will be by the end of this year, maybe by September or October." 3) "I haven't seen the packaging or tasted it. But I hear Pepsi's well along in the development process." 4) "We need something to compete with Sprite." Reason. Major independent 7UP bottler: "This is about concentrate, concentrate, concentrate. Pepsi doesn't want its bottlers selling someone else's concentrate. Roger Enrico is a concentrate man."

Impact on 7UP? Dr Pepper/Seven Up (DPSU) works to turn around 7UP. Pepsi system handles 36% of 7UP volume in US; 3rd tier 61%. Pepsi COBO and Beverage America are top 7UP bottlers; each moves 13.3% of brand's volume (BD 12/13/96). Co-existence. Pepsi bottlers consider issue: if Storm introduced, could Pepsi bottlers with 7UP keep 7UP and sell Storm? Top-10 Pepsi bottler: "Pepsi's objective is to manufacture what it distributes and get the concentrate profit. But I don't think Storm would preclude us from distributing 7UP. Pepsi won't push its bottlers to choose." Adds: "Co-existence issue will be for Cadbury to decide. I don't know what Cadbury's response will be."

Also. Other Pepsi bottlers: 1) "This could mean allied brand pressure (on DPSU) from Pepsi." 2) "(Addition of) caffeine may allow (7UP and Storm) to co-exist." 3) "Caffeine won't make enough difference to let (7UP and Storm) co-exist." 4) "Pepsi is looking for a lemon-lime product it can have system-wide." 5) "If it kicks Sprite in a test market, I'll face the 7UP issue." International. Pepsi owns 7UP outside US.

Prospects. Pepsi bottlers offer diverse views: 1) "If Pepsi comes up with a product that does the trick, why wouldn't we take it on?" 2) "Pepsi will probably do what Coke is doing with Citra (BD 1/22/97) -- introduce it in a few markets and see how it flies." 3) "They probably won't do any better with Storm than they did with Slice. By the way, I don't think Surge will hit a home run either." 4) "COBO would probably take it on first. Then it will be a long process with the franchised bottlers." 5) "I don't know why a Pepsi bottler with 7UP would be excited about this. Pepsi didn't have great success with Slice." Ahead. Pepsi bottler: "Pepsi will someday want a Dr Pepper-type product, too."

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