PepsiCo brought together executives from its US bottling system in August to review new product and marketing plans for 2020. The company hosted the meeting at its Purchase, New York headquarters. Attendees included company-owned and independent franchise bottling executives. The gathering came six months after PepsiCo reorganized its North America beverage business into five divisions, four in the US and one in Canada. The meeting’s theme was “Nationally Great. Locally Even Better,” continuing the rallying cry from last year. PepsiCo Beverages North America CEO Kirk Tanner said the system has support from PepsiCo CEO Ramon Laguarta and that increased investment in core brands Pepsi, Mtn Dew and Gatorade will improve performance. Details of the meeting in this report are based on information provided by multiple sources.
‘Robust’ A&M. PepsiCo Chief Marketing Officer Greg Lyons expressed optimism about the beverage unit’s reorganization. “We finally have the team that is going to take us into the future,” he said. Advertising and marketing spend for PepsiCo’s beverage portfolio increased significantly during the first half of this year. A&M spending next year will continue to be at robust levels. “We have significantly more innovation in 2020 and have been receiving incredibly positive feedback from our customers,” Lyons added.
Brand Pepsi. Brand Pepsi will concentrate on “key cola moments,” and increasing awareness and trial of flavors and zero-calorie offerings. The goal is to reinforce the idea that Pepsi represents unapologetic enjoyment. The brand will bring formula innovation to the cola category, use packaging innovation to drive trial, and use sports to stoke the rivalry around cola.
Mtn Dew. The brand will focus a significant portion of its advertising and marketing spend within core Dew markets and seek to recruit new audiences with the launch of a variant. Kickstart will get new packaging and a meaningful line extension. The formula and packaging for Dew Ice will evolve. On the retail front, work within the dollar store channel has informed a new broader customer strategy. Game Fuel, a gamer-targeted functional energy drink launched this year, will add a line extension and a limited-time offering. The brand will continue to leverage key gaming partnerships with publishers, leagues and teams. A new Game Fuel project will add to the brand’s credibility.
Gatorade. Base Gatorade will focus on Hispanic-centric markets. The brand will take a more surgical approach to media spend during hot weather, and G Zero will introduce new flavors. Labeling will better identify the functional difference between regular Gatorade, lower-calorie G2 and no-sugar Gatorade Zero. Bolt24, an all-day hydration platform launched this year, will continue to build distribution and evolve the platform. Propel managers want to increase support for Vitamin Boost, which was launched in April. When it comes to Gatorade’s line of protein shakes, the brand will be contractually free to pursue a more aggressive retail strategy now that PepsiCo owns Muscle Milk.
Water. PepsiCo’s Bubly sparkling water will add flavor, product and packaging innovation in 2020. At retail, bigger lobby and perimeter displays will be an emphasis. Lifewtr will emphasize a sustainable packaging initiative tied to new bottle and recycling programs. Aquafina will look to provide increased options for consumers with aluminum packaging.
Tea/Coffee. The US tea category has been challenged with losses to bottled water and a slowing of the consumer shift from carbonated soft drinks. PepsiCo’s Lipton partnership will emphasize the organic credentials of its Pure Leaf line within a premium tea segment that has yet to produce a scaled player. Lipton also will introduce a new product platform. In coffee, PepsiCo’s Starbucks partnership will launch new flavors across Frappuccino and Tripleshot, as well as a cold brew innovation. The full Starbucks portfolio will be supported with increased marketing spend.
Energy. Rockstar will look to move into the functional energy space and focus on flavor innovation.
Juice. In chilled juice, Tropicana will get increased advertising and marketing support. Kevita’s branding will be enhanced. In ambient juice, PepsiCo will seek to build a national value brand that is cold-filled and DSDdelivered. Another juice brand will be repositioned to play more meaningfully in lemonade.
Other Initiatives. PBNA will continue to focus on Hispanic consumers using brands such as Pepsi, Gatorade and Manzanita Sol. New Dr Pepper and Crush flavors will be priorities for PepsiCo’s allied brands unit, while Schweppes will expand its presence in the mixer category.
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