‘When you see blue, we need to see black,” Pepsi CMO Says of Zero Sugar.
Starbucks Ready-to-Drink Coffee Partnership to Tap Café Favorite.
Executives from PepsiCo’s company-owned and independent bottling system met this summer at company headquarters in Purchase, New York to discuss market plans for 2023. The theme of the meeting was “Fit to Win.” PepsiCo Beverages North America CEO Kirk Tanner said it was time for PepsiCo and the bottling system to “separate itself from the pack in the wake of the global pandemic.” PBNA’s goal is to grow faster than the category, deliver stronger profit margins, and be even better when it comes to priorities such as racial diversity, community impact and sustainability. “Faster, stronger, better,” he said. PBNA Chief Commercial Officer Chad Matthews and CMO Greg Lyons elaborated on Tanner’s call to arms. Being “faster” means strengthening core brands, unlocking new growth, and driving share, they said. Being “stronger” means winning in growth channels, building precision in sales and marketing at scale, and delivering productivity. “Better” is transitioning to 100% recycled PET, building purposeful brands, and making “positive” business choices. Details of the meeting in this report are based on information provided by multiple sources.
CSD STRATEGY. PBNA will apply lessons learned from the unit’s seasonal Super Bowl success to other key CSD buying occasions, including the summer selling season. In addition, the convenience and gas channel will be a key focus for in-store and media spend. PBNA will look to win sales and share in “zero sugar” sodas, flavors and mini-can packages.
PEPSI. Pepsi Zero Sugar will be a priority linked more closely to regular Pepsi-Cola at retail. “When you see blue, we need to see black,” brand Pepsi CMO Todd Kaplan told bottlers. Flavored soft drinks will be a cola share battleground for PBNA in 2022 amid big music plans for Pepsi and innovation within the Pepsi Nitro portfolio. The plan will include an LTO strategy, with a big springtime push, along with the return of Pepsi’s retro-themed Soda Shop line in the fall.
MTN DEW. An important objective for Mtn Dew will be sales growth in the core “green” product. In addition, the brand will add bold flavor extensions, and there will be a “step change” in emphasis on the brand’s Zero Sugar variant. Core Mtn Dew marketing initiatives will rally around gamers and action sports. PBNA will place a renewed focus on the convenience and gas channel.
KDP CSDS. PBNA will look to improve its share position for key distributed Keurig Dr Pepper brands Crush and Schweppes. In addition, PBNA will build 20-oz sales of Dr Pepper Zero Sugar, launched in 2021, and Dr Pepper will get a new flavor variant.
HISPANIC MARKETING. PepsiCo’s Hispanic Business Unit will use cultural events as an anchor for its marketing efforts across multiple PBNA brands. In addition, the unit will look to gain ground with Hispanics with colas, flavored soft drinks, sports drinks, and energy drinks, especially Rockstar. Ethnic groceries will be a focus for retail growth.
GATORADE. The market leader in sports drinks will continue to accelerate share and sales momentum while adding key long-term innovation, executives said. As BD has reported previously, the brand is preparing for a transition from warehouse delivery to direct store delivery in the grocery channel. Meanwhile, Gatorlyte rapid hydration will get a key extension. The Gatorade unit will look to close distribution gaps and add shelf presence for Gatorade Fit healthy hydration, launched earlier this year. The brand will launch new forms for some Gatorade products and continue elevating their Gx and equipment platform. Propel upgrades will include branding, ingredients, and package variety. A new form will be introduced as well Gatorade will extend the brand into energy with the introduction of Fast Twitch.
ENERGY. Rockstar will build its core offering and drive greater brand relevancy. PBNA will continue to position Mtn Dew Energy as a functional energy drink that provides a mental boost. Mtn Dew Energy will generate excitement with limited-time flavor offerings.
COFFEE. PepsiCo’s North American Coffee Partnership with Starbucks continues to bolster its co-packing network in the US after product shortages cost sales. Frappuccino will be rejuvenated with a return to variety, the addition of a key package format, and a renewed emphasis on seasonal limited-time offerings. Meanwhile, a popular summer offering at Starbucks cafes will be lifted and shifted into the ready-to-drink market.
WATER. Following supply constraints in recent years, Bubly sparkling water will get renewed marketing focus and new flavors with a campaign rooted in positivity and the continuation of the brand’s longstanding relationship with Michael Bublé. Lifewtr, which has tied its marketing to creativity, will evolve to include product-based messaging focused on functionality and hydration. The brand will promote Lifewtr through a recently announced relationship with LeBron James that includes community engagement and a new 360 advertising campaign.
TEA. PBNA is significantly easing Pure Leaf supply constraints as the unit intends to grab newly vacated shelf space (Coca-Cola is discontinuing Honest Tea this year). Lipton will get a new look and feel, and flavors will be emphasized. Brisk will focus on bold flavors important to their customer target in the grocery and convenience retail channels.
PROTEIN. Supply shortages affected PBNA’s protein beverage portfolio as well. This will be improved by next year as media investment increases. Protein shake brand Muscle Milk will get an upgraded new identity. G Zero Protein will be connected closer to Gatorade Zero at retail. Plant-based protein shake Evolve will reformulate with a new ingredient source.
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