An article from BevNet.com mentions that Pepsi will be launching another soda in the coming year (link here). The industry critic from the linked article believes that the launch won’t meet expectations since other similar products have failed in the past (Pepsi Edge, Pepsi XL, and Coke C2 are the failed experiments). Pepsi Next – a 60-calorie carbonated soft drink (CSD) partially sweetened with high fructose corn syrup and natural sweeteners – launches Summer 2011. Pepsi is reported to be promoting their new product through Simon Cowell’s new tv program “X Factor” in addition to other strong advertising and marketing support.
Is there such thing as middle ground for consumers though? Those that want full flavor will opt for the regular Pepsi, those that want diet will grab a Diet Pepsi, and those that want the full flavor with zero calories will choose Pepsi Max. Will anyone choose mixed sweeteners and 60 calories instead of any of the already available options? Consumers that are willing to sacrifice taste and ingest less calories will likely choose the Pepsi Max, and whereas consumers that want full taste and do not care about the calories would choose Pepsi, so where does that leave Pepsi Next? Even Pepsi expects there to be some form of cannibalization, where one Pepsi beverage will be substituted by another Pepsi beverage.
It is clear that the soft drink market is declining and Pepsi is trying to establish a stronghold in other categories like enhanced water and energy beverages, but why would they introduce one more product into this category? On the heels of Pepsi slipping from No.2 to No.3 in the United States, their solution appears to be introducing a new product that will cannibalize their own shares in a declining CSD market and confuse their customers with which Pepsi product to choose. Why not focus your portfolio on the emerging products and gain a stronghold in those categories?
The old adage is that you never want to fix anything that isn’t broken, and Pepsi clearly is broken in that sense. But with what the beverage organization has done: introducing new Pepsi beverage alternatives, a modified logo and constantly changing packaging, are any of these “fixes” actually helping the company? I believe this is a move in the wrong direction, but only time will tell.