PepsiCo is betting on a new 13-oz PET bottle priced below $2 to reach consumers who are walking past the cold vault to better afford higher prices for gas and groceries. The company is rolling out the smaller bottle across five of its biggest sparkling brands. We dive deep in a Q&A with PepsiCo's US Sparkling Chief JP Bittencourt.
Rising fuel and aluminum prices against the uncertainty of a war in Iran and the highest annual inflation rate since May 2023 have caused increasing angst among US beverage bottlers and distributors. BD informally surveyed executives across the Coca-Cola, PepsiCo, Keurig Dr Pepper, and independent beverage distribution systems during the past week to find out what cost and profit margin pressures they face now, and what additional pressure they expect. The bottlers also discussed concerns about the revenue side of their P&Ls as consumers look for ways to better afford high grocery and gas prices. During the first-quarter earnings cycle in recent weeks, Coke, PepsiCo, Keurig Dr Pepper, Celsius Holdings, and Monster Beverage all addressed current and anticipated commodity inflation pressure this year, while adding that the costs are mostly manageable so far. “We expect beverage companies will feel margin pressure in 2026, with likely pricing actions in 2027,” RBC Capital Markets Beverage Analyst Nik Modi wrote in a May 7 research note, citing higher costs for aluminum and fuel. Much of the pressure is falling on distributors who own and fuel the trucks that move beverages and buy the aluminum cans that drinks are packaged in. One bottler called it a “perfect storm” of cost pressures. The following is a summary of responses and key themes that emerged from more than a dozen discussions:
Celsius Energy went from being an underdog to the No. 3 energy drink in the US with a simple formula: broaden the base. Rather than competing for the traditional male energy drink consumer through testosterone-fueled marketing, Celsius Energy built its brand around flavor and a wellness-oriented identity that gave women and professionals who had never bought an energy drink permission to enter the category. Now, with the acquisition of Rockstar Energy from PepsiCo last year, parent company Celsius Holdings is tapping back into the category's roots to access the adrenaline and attitude that built the energy drink sector. “We’ve always been an in-your-face brand,” Celsius Holdings CMO Rishi Daing said of Rockstar, for which he is spearheading a marketing reset. “But we became a little too polished in recent years, maybe a little too sophisticated. Our consumers probably weren't finding that as relevant anymore.” Last month, Celsius Holdings launched a new “Live Loud” brand identity and marketing campaign, playing off Celsius Energy’s “Live. Fit. Go” brand positioning. The new Rockstar positioning comes with an aggressive push into music, action sports, and motorsports. Daing said...
