Pepsi Throwback in Canada

Pepsi Throwback CanadaRegular readers of my blog may remember that I reported on Pepsi Throwback and Mountain Dew Throwback last year, but mainly as a American limited-time only beverage.  Well I was thirsty and went into a Shoppers Drug Mart a few weeks back and was surprised to notice that there was Pepsi Throwback here in Canada.  In addition to being a soft drink that was only released in the United States, I remember that the beverage being a few years old.

After some googling, it turns out that the Pepsi Throwback was made part of Pepsi’s permanent line-up because of their strong sales and recipe.  It was also launched in Canada early 2011.  Throwback tastes different from the current Pepsi cola in that it has no citric acid and uses real sugar, compared to High Fructose Corn Syrup in the “new” Pepsi.

Initial feedback has been great for Pepsi Throwback, but as my critiquing tendencies go, do they really need another permanent Pepsi?  It almost appears that they are trying to blanket-cover the calorie and sweetness spectra with their offerings.  Pepsi, Diet Pepsi, Pepsi Max, soon to be launched Pepsi Next, and now Pepsi Throwback.  How much cannibalization will occur?  The expanded line-up means some drinks within the portfolio gets less sales.  Pepsi should beware of what vitaminwater is doing in terms of having so many available options for a consumer to choose from.  vitaminwater’s consumers to this day still gravitate toward 5 flavors out of a possible 11 flavors, making more than half of them slow movers and hard for retailers to justify the shelf space.  This isn’t to say that having Pepsi available in 5 different options is a bad idea, but each of the 5 option must be unique to avoid duplicity.  Pepsi’s differentiation between Pepsi Cola, Diet Pepsi, Pepsi Max and even Throwback would be significant, but Pepsi Next…not so much in my opinion.

While I didn’t buy a Pepsi Throwback that day (settled for vitaminwater instead) I am still interested in finding out what it tastes like and how it compares to the new Pepsi.  Has anyone ran a taste test to try both, and care to give me your two cents?

Pepsi Next – the new 60-Calorie Soda

Pepsi Next - courtesy of rft3.wordpress.com

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.

 

Pepsi Slips To Number 3

2010 Coke and Pepsi Market Shares, courtesy of adage.com

A few weeks ago, Beverage Digest posted the latest market share statistics for the US carbonated soft drinks (CSD) category and we found out that Pepsi had slipped to number 3 (see stats here). Industry analysts had predicted that this market share change was coming as Pepsi had lost share in the last few years, as Coca-Cola has stayed the course with their beverage unit and maintained marketing Diet Coke in traditional media (TV/print/radio) while Pepsi started promoting other beverages in traditional media, and invested in other forms of marketing

It seems that as Pepsi sought to maintain a balance beverage portfolio by promoting other beverages (such as Pepsi Max, Sierra Mist, Aquafina Plus10, Mtn Dew, Gatorade, etc) that they forgot to keep promoting Pepsi itself.  Their NFL sponsorship was recently changed from Pepsi to Pepsi Max, Superbowl advertisements followed the same course, and even the main TV commercials started promoting a Coke Zero vs. Pepsi Max cola war instead of focusing on Coca-Cola vs. Pepsi.

Was this the right decision for Pepsi – to focus on other beverages instead of their core product?  Despite Pepsi’s balanced portfolio making them more formidable to withstand declines in any one category if they promote other products, the CSD category is still the largest beverage category.  Even within the CSD category, promoting Pepsi Max, Mtn Dew, and Sierra Mist helps these brands gain traction and spread their risk if any one product sees slow sales.  However, CSDs as a category is in decline, and Pepsi has been declining more than the category.  And according to the Beverage Digest rankings, it’s not just Pepsi that lost market share, it’s also Diet Pepsi.  Your two core products are in decline, while your competitor’s two core product maintain market share in a declining market, meaning they now own a bigger share in the CSD category.  Even Sprite, another core product for Coca-Cola passed Diet Pepsi in the market share rankings.

Although this decline cannot be fully traced back to any one particular issue, I would answer that Pepsi’s decision to experiment  with their marketing and promote other brands was a bad decision.  The core of your business where you make the most money is still Pepsi and therefore you should be promoting Pepsi.  In the largest marketing venues, Pepsi should be promoted and not Pepsi Max.  Though whether they should allocate more spend at the expense of other brands is still questionable, promoting their core product more and through effective traditional media is a must.

Dr Pepper Joins The Low-Calorie Soda War

Dr Pepper recently launched Dr Pepper 10, joining Coke Zero and Pepsi Max in competing for consumers’ dollars in this low-calorie beverage market.  Launching is six American markets (Denver, Colorado Springs, Des Moines, Kansas City, San Antonio, and Austin), Dr Pepper markets this drink as only for men.

The main points of differentiation for Dr Pepper’s low calorie option is that Dr Pepper specifically targets men and only contains 10 calories (per 355ml serving) and is outwardly targeting men.  While Coke Zero and Pepsi Max have strong sponsorships with male-oriented events (Nascar and NFL, respectively) and advertise with a strong focus on male consumers, they have never out right said that it’s a beverage for men.  Doing so would alienate a large of female potential consumers.  Yet Dr Pepper sees that this may be a potential niche market that they can own.  Furthermore, Dr Pepper says that having 10 calories gets the beverage’s flavor as close as possible to the natural flavor of Dr Pepper.  So will this work for Dr Pepper?

Given men’s association with dieting, marketing this beverage would be quite a challenge – if they had actually included the word “diet” and cut out all calories.  By leaving some calories in order to closely replicate the Dr Pepper taste, they have also created their own market for low-calorie soda options.  Recognizing that they are joining the low-calorie market late and having to deal with all the competition from Coke Zero and Pepsi Max, Dr Pepper was smart in creating their own market to reach out to consumers.  While Coke Zero and Pepsi Max have both been successful as zero-calorie options, there may be still male consumers out there that perceive this as a diet beverage and stick with the regular Coca-Cola and Pepsi.  Though these consumers may be brand loyalists, Dr Pepper 10 might appeal as an alternate option to those that consider a soda without any calories is impossible, or even that there is a different taste.

Though currently only in test markets, Dr Pepper’s Director of Marketing Dave Fleming says that Dr Pepper 10’s marketing budget is significant, and will give off the feel that it is a national launch in those six test markets.  A Dr Pepper 10 branded trailer will appear in these test markets at sporting events or car shows offering male consumers the opportunity to play video games and watch TV.

Dr Pepper 10

As it stands, the low-calorie soft drink market is growing in its importance while the overall carbonated soft drink category is stagnating.  This sub-category of low-calorie sodas may give the category the boost that it needs so it will be kept top-of-mind with consumers that are looking to refresh themselves (versus water, energy drinks, tea, and juices).  No word on whether it will come up to Canada, but if Coke Zero and Pepsi Max are any indication, Dr Pepper 10 will see at least moderate success that justifies its need to be launched in Canada.

Pepsi Max Official NFL Soft Drink

Pepsi Max has been named the official soft drink of the National Football League, moving away from the regular Pepsi soft drink.  This move comes after the Pepsi Max rebranding (BevWire blogged about that a couple of weeks ago) and Pepsi hopes to gain some momentum with the beverage.  The new commercial features New York Jets’ quarterback Mark Sanchez “training” the Pepsi Max driver (also the same truck driver from their earlier spot about the Pepsi Max Diner 2.0).  See below.

It’s an interesting move by Pepsi to change the official soft drink away from Pepsi.  Is this a realization that consumers prefer full taste but no calories in their soft drinks?  A good way to promote a smaller beverage, but what about protecting the sales of the main (read core, bread and butter, most important, etc) beverage in your soft drink portfolio?  And Coca-Cola has been advertising their zero calorie alternative Coke Zero in the Superbowl since 2009, advertising Pepsi Max now might seem like a copycat move.

BevWire doesn’t believe this is a great move on Pepsi’s part.  While the commercial is entertaining, it doesn’t make me any more likely to drink Pepsi Max.  And although advertising a new (or repackaged) product is important, using a medium that was previously reserved for your core offering and replacing it with the new product isn’t the best move.  Advertising dollars for Pepsi can always be allocated elsewhere, but where would you have such a strong audience to remind them about your most important soft drink.  Unless Pepsi believes Pepsi Max is more important than Pepsi, and can also take down Coke Zero, changing the NFL official soft drink to Pepsi Max is not helpful.  Also, Coke Zero’s advertising does not have to focus on comparing with Pepsi Max, making it the clear number one zero calorie soft drink my eyes.  If you’re in first position, why do you have to change your strategy and get into a slugfest with the number two?  The last time Coca-Cola did that, we saw a new cola formula come to the market and the disaster that was New Coke.

It will be interesting to see what happens to Pepsi Max sales now that it is the official NFL soft drink.  Sales will undoubtedly rise, but will it rise enough to justify changing the preferred beverage from Pepsi?  We’ll have to wait and see.

Cola Wars…Here We Go Again

Pepsi has always been on the edgier side with their marketing and they have done it again.  Always the company to ignite rivalry with their taste tests and comparison commercials, they released a TV ad during the 1995 Superbowl titled “Diner” pitting Pepsi against Coca-Cola.  The commercial ends with “Nothing else is like a Pepsi”.  You can see the ad below.

Recently, Pepsi has released a sequel to this TV ad – Diner2 or War – pitting Pepsi Max against Coca-Cola Zero.  In this updated spot, the Pepsi driver offers a Pepsi Max to the Coca-Cola driver, snaps a video of him drinking it, and then posts it on youtube.  The tag line at the end of this updated commercial is “Zero Calories, Maximum Pepsi Taste”.  25 years later, and Pepsi is still trying to ignite rivalry with Coca-Cola.  First it was against Coca-Cola and now it’s Coca-Cola Zero.  But despite all the commercial views on TV and online, does this ad work?  And the more important question, does it created the desired effect of switching Coca-Cola Zero drinkers to Pepsi Max?  The commercial can be seen here.

It is obvious what is being advertised in the updated commercial, and it uses humor to play off of the taboo of a Coke driver drinking a Pepsi Max, and ends reminding consumers with the tagline “Zero Calories, Maximum Pepsi Taste”.  Will this get anyone to buy a Pepsi Max?

BevWire doesn’t think it works.  While the commercial is funny, it won’t get anyone to change to Pepsi Max – it lacks a compelling message to get a consumer to switch.  It advertises itself as a copycat of both Pepsi and Coca-Cola Zero when it’s trying to communicate maximum taste but zero calories.  With all the logos involved pitting the two against each other, it is obvious Pepsi Max is trying to one-up Coca-Cola Zero through the ad.  Then the ad finishes saying “Zero Calories, Maximum Pepsi Taste” .  Maximum Pepsi Taste!?  Why go through an entire 60 spot to showcase yourself against one competitor (Coca-Cola Zero) and end with the tagline comparing yourself to Pepsi?  This wasted the commercial’s comparison with the new focus on Pepsi.  Would a tagline like “Zero Calories.  Nothing else like a Pepsi Max” be better since it maintains the focus on Pepsi Max?  Compared to Coca-Cola Zero’s latest commercial, this Pepsi Max commercial lacks originality despite its desire to portray originality.  At least Coca-Cola Zero communicates to its audience that it offers real Coca-Cola taste with no calories, and does this while focusing on its own product.

Ultimately, this commercial won’t change anyone’s opinion of their zero calorie beverages.  Those that enjoy Pepsi Max will keep on buying Pepsi Max, and those that choose Coca-Cola Zero will continue to purchase Coca-Cola Zero as well.

Another question that lingers in the mind may be how Coca-Cola will react to this commercial, will they do anything to combat this comparison ad?  When the entire carbonated soft drink category seems low single digit growth last year and Coca-Cola Zero experiences double digit growth, there will definitely be someone out there trying to copy you and take your growth away.  Coca-Cola Zero’s reaction should be flattery since Pepsi Max is trying to imitate them, because it provides additional publicity for Coca-Cola Zero free of charge and reinforces the fact that Pepsi Max is a copycat.  Will Coca-Cola do anything to combat this ad?  If a reminder is needed, look no further than in their own history with the New Coke launch failure.  If you get caught up in what the competitor and media is saying about your own product, your own fears will become a self-fulfilling truth forcing you to make an action that you will later regret.  BevWire thinks Coca-Cola should maintain status quo with their own advertising.  When you are the category leader (zero calories soft drinks), and you’ve built up brand loyalty through your own set of ads communicating your own great taste, why stoop to the level of your competitor and engage in another round of the Cola Wars?