Pepsi Spire’s Launch Fuels Competition and Innovation

Pepsi's range of the Spire. There are three different sizes and versions (1.1, 2.0, 5.0) to help customers cater to their consumers' needs.
Pepsi’s range of the Spire. There are three different sizes and versions (1.1, 2.0, 5.0) to help customers cater to their consumers’ needs.  From left to right: Pepsi Spire 1.1, Pepsi Spire Ice Dispenser, Pepsi Spire 2.0, Pepsi Spire 5.0 counter top unit, Pepsi Spire 5.0 freestanding unit, Pepsi Interactive Vending Machine, and Pepsi Smart Cooler.

Since 2013, Pepsi has been testing an interactive fountain unit similar to Coca-Cola’s Freestyle.  It looks like the testing is complete and they chose to launch the interactive fountain dispenser as Pepsi Spire (after trademarking Pepsi Touch, Pepsi Fusion, and Pepsi Smart Cooler).  The Pepsi Spire comes in three sizes offering restaurant customers up to 1,000 beverage combinations, here’s the media release from Pepsi.  It is currently available in over 50 locations in the U.S.  Spire’s launch comes nearly five years after Freestyle, but Pepsi has taken this time to tweak issues that were present during Coca-Cola’s launch: customer frustration and social integration.

Pepsi launched Spire with three different sizes, relative to Coca-Cola’s Freestyle launch in only one size.  This will certainly be pleasing to restaurant owners.  One of the initial concerns for Coca-Cola’s Freestyle was that some restaurant may not have strong enough customer traffic to justify the available flavor combinations.  This would exclude the Freestyle’s availability for smaller restaurant.  Having smaller units with fewer combinations solves this problem.  This leaves only the top flavors and most popular combinations available for the smaller unit (40 combinations for Pepsi Spire 1.1), and offers the broadest assortment for the largest unit (up to 1,000 combinations for Pepsi Spire 5.0).

Pepsi also understood that the “maker” movement is both interactive – and social.  Despite no direct mention of social media integration, Pepsi has demonstrated the ability to incorporate the usage of mobile phones, Facebook, Twitter and other social platforms with their equipment.  While it is widely understood that most dining experiences are social, Pepsi found a way to make this experience more inclusive with your peers.  Pepsi’s smart equipment also has the ability to provide the restaurant customer with popular beverage combinations at that location, further integrated social and local demographics.

Pepsi Spire 2.0 – the interactive fountain unit integrated with smart equipment to provide popular beverage combinations as well as real-time insights for restaurant owners.

The launch of Pepsi Spire has spurred Coca-Cola to improve the Freestyle.  Coca-Cola recently introduced a mobile app allowing users to share their drink combinations with other users and pre-mix drink combination to scan at the Freestyle unit.  Coca-Cola also announced two smaller Freestyle fountain units coinciding with the Spire’s launch.  To minimize market news and maintain a competitive landscape against the Pepsi Spire, Coca-Cola’s Freestyle has also introduced smaller Freestyle units that dispense 35 drink combinations or 80 drink combinations.

The Pepsi Spire’s adoption rate should be relatively quick given their unit size flexibility as well as their own customer exclusivity contracts.  Beyond customer push tactics, consumer trends and social integration will help pull the Pepsi Spire into more on-premise locations.

The Cola War heats up again with the arrival of Pepsi Spire, this time on the fountain unit frontier.

Pepsi Integrates Social Media Into Vending Machines

The Cola Wars have largely been publicized on the single serve front with more recent TV commercials taking the fight to the diners and delivery trucks, and also extending out to Coke Zero and Pepsi Max.  While Coca-Cola started gaining press for their vending machines dispensing you a beverage when you sing, dance, or hug the machine, Pepsi seemed to be dormant on this front of the Cola War.  Well it turns out that Pepsi did in fact respond, but BevWire may have been hiding under a rock when those news articles gained popularity.  The video above shows you that Pepsi will give you a free Pepsi of your choice if you like them on Facebook.  Really nice touch of layering in social media to their existing vending technology.  Should this vending machine come to the United States and Canada, this will certainly extend the Cola War over to the vending machines.

While Coca-Cola has innovated on their fountain unit – the Coca-Cola Freestyle – they still have not integrated any form of social media aspects directly into the machine.  Sure, there is a smartphone memory game for the user to play and guess/create your own fountain concoction, but there is no social media integration on the machine itself.  This is where Pepsi’s vending machine is unique.  Pepsi is generating social media currency by sampling their trademark beverages to consumers.  This currency makes the Facebook user proclaim their enjoyment of Pepsi, and certainly allows Pepsi to collect consumer demographic information similarly as well.  In a time when the grocery shopper buying your product is not the same person that ends up consuming the product, the vending machine allows you to connect directly with the end user.  While there may be certain privacy laws governing this, but Pepsi will essentially be able to capture information about the user’s location data, sex, age, school, work and anything else the Facebook user puts on the social network.

Pepsi Like Machine - courtesy of socialnewsdaily.com
Pepsi Like Machine – courtesy of socialnewsdaily.com

So on the vending machine front, while Coca-Cola has you singing, dancing, and hugging their machines to open happiness, they still don’t know exactly who you are and where you live.  The Pepsi vending machine does.  This gives them a slight edge on the vending machine front of the Cola War.  Your turn to respond Coca-Cola.

Increase Customization to Satisfy Soda Shopper Needs

It’s no surprise that carbonated soft drinks have been on a sales decline for the past few years.  Subjects such as stronger health-focus, lower calorie sodas, and government-proposed taxes are just a few examples of contributing factors toward the category’s decline.  So what has beverage conglomerates done to respond to this challenge?  Increase their product assortment – especially in the low calorie segment – and expand their package ranges among existing flagship brands.  One such example of proliferating the package range is delivering even more customization at a grocery retailer.

Over the last few months, we have seen examples of this customization from both Coca-Cola and Pepsi.  Beverage Digest tweeted about Coca-Cola’s partnership with Kroger’s to deliver a retailer-specific merchandizing strategy, where individual 12oz (355ml) cans of soda were lined up in racks for shoppers to choose their desired composition for an 8- or 10-pack.

Shortly after that, BevReview.com’s readers tip off a customized offering from Pepsi, offering a mix of both Pepsi and Mountain Dew in one 28- and 30-pack offering.

Both types of offering are examples of increased customization and are intended to satisfy more of the shopper’s needs.  Both are trying to ensure that the grocery retailer fulfills most (if not all) of their buyers’ soft drink requirements on that one shopping trip.  Coca-Cola’s offerings are also eliminating the fear of expired cans simultaneously.  After all, as a grocery shopper that previously had to buy a 12-pk of Tab but really only wanted 4 cans of Tab can now get these 4 cans, along with a couple cans of Fanta Orange and Fanta Grape.  Pepsi’s combo pack meets shoppers’ needs a little differently, but still offers customization since you can purchase both top-selling beverage brands in one case pack.

Coca-Cola Freestyle - courtesy of timeoutchicago.com

These custom offering are likely the end result of valuable shopper insights on consumption behavior.  What’s also interesting about Coca-Cola’s create-your-own-pack initiative is that it mimics their Coke Freestyle machine.  To remind some readers, the Coke Freestyle is the beverage manufacturer’s fountain unit that offers over 100 flavors of soda.  The important part to note for this machine is that in addition to allowing the thirsty consumer to create their own beverage mix, it also provides the Coca-Cola with information on what flavors are dispensed the most and possibly satisfy a previously unmet beverage need.  Creating your own multipack allows them to do the same thing, by monitoring shipment levels of individual cans and tracking the point-of-sale scanned data.

For Coca-Cola and Pepsi, this is an example of passing influence to the purchasers while maintaining their own product control.  By giving customers more choices and customization, they have effectively satisfied more of the shoppers’ needs and benefited themselves in the process with rich information.  Everyone wins in this scenario.