My last blog post on brands was about brands that possess revival power and how to spot these wizard brands in your company’s brand portfolio. In that context, I had shared my thoughts and ideas on how Passport Scotch Whisky from Pernod Ricard can tweak its brand strategy and along with a new brand campaign, revive itself as well as create a stronger connection between Pernod Ricard and young whisky drinkers around the world.
In that article, though, I had mentioned that I had thought of a new drink idea for PepsiCo that might do something similar for the company. It was over ten years ago, in 2010, when I had put down my thoughts and ideas but lost them to termites at my parents’ place in Goa. I have now recreated that brand strategy for a new drink and campaign ideas as well, from memory, and would like to discuss them here.
This is really not just about a new drink, but how brands have the power to revitalize a category in consumers’ minds, and also revive the corporate brand and the company in the process. Especially a lead or flagship brand, such as Pepsi has been for PepsiCo. It has not merely been the main image-builder for the company, but also the main revenue earner for them around the world, and the product that they started out with. This doesn’t mean that we go down memory lane and the nostalgia path. But we must acknowledge and recognize just how important this single brand is to the company and how relevant in corporate branding.
Pepsi Cola was the brand they originally launched, which lent its name to the Company in an abbreviated PepsiCo. The drink brand itself was shortened to Pepsi. There is, therefore, a stronger connection between Pepsi and PepsiCo, than we perhaps care to realise. It is almost an umbilical one, and the sanctity of that connection needs to be maintained, even as we go about launching a new drink.
Why, a new drink, in the first place? Well, because consumers especially in the US and western markets have been telling us that they would like to shift away from carbonated drinks, and cola ones as well. This is not a new or recent phenomenon or a passing fad or trend, and is perhaps one of the reasons that PepsiCo embarked on a journey to create, acquire and bring healthier offerings to consumers. It was the former CEO, Indra Nooyi’s vision to see that the Company brings healthier, good for you and better for you, products and brands.
This is evident in the rise of new and perceptibly healthier beverage options in the US and other markets, such as Snapple, and several types and brands of water. In the past couple of decades, though, PepsiCo has become more of a snacks and foods company diversifying away from beverages to the extent of perhaps even neglecting the category, sometimes. Meanwhile Snapple, Dr Pepper and Coca Cola are all running away with a larger share of the soft drinks market, launching new variants, new products and new brands. Pepsi’s share by volume of the carbonated drinks market is declining, and Coca Cola enjoys a much larger share of the overall soft drinks market in the US than PepsiCo does: 46.3% to 25.6%, according to Statista.
More than a declining share of the market, Pepsi is probably also declining as a share of the consumer’s mind, and this is something the company must vigilantly guard against. With consumers shifting away from carbonated drinks and colas in the US, could PepsiCo’s drinks portfolio be in trouble? Is the lead brand Pepsi itself a little jaded now, since there are only so many healthier variants that one can introduce: Diet, Caffeine-Free, Zero Sugar, Low Calorie etc. and perhaps none of them meet the consumer’s new demands of a soft drink.
It is probably to strengthen the healthy drinks offering from PepsiCo, that the company acquired Tropicana the fruit juice brand from Seagram in Indra Nooyi’s time. I cannot understand why the company has chosen to sell it, at least in the US, from what I read in the news, though Tropicana continues to be marketed in India by PepsiCo India. In order to realise the company’s vision of offering healthier products and to keep in step with consumers’ changing tastes and lifestyles, it is imperative that PepsiCo improve its drinks portfolio through innovation.
It was this that got me thinking about how PepsiCo can exit the carbonated drinks category and reinvent itself as a maker of healthier, refreshing drinks for the young generation. To my mind, there is no stronger signal of change than with the leading brand. For PepsiCo to innovate and introduce a new drink that can replace Pepsi, would be the most effective way to tell the world, we said healthier and better for you and here it is.
Here is the drink idea, in brief. In keeping with consumers’ changing tastes and preferences, the new drink would be a non-carbonated and a non-cola one. On the health and refreshing parameters, the new drink would use natural ingredients that consumers already identify as healthy and refreshing, such as coconut water, fresh lime, tea and passion-fruit. I had originally also thought of a refreshing green mango drink (aam panna as it is known in India). The new drink would maintain the sparkling effervescence of Pepsi, but naturally and not through carbonation.
Initially, I wasn’t sure if it was possible to create such a drink, but I believe that now it might be, based on what I have been reading and hearing in the news. The new drink would also be priced at a premium to Pepsi, on the assumption that consumers would be willing to pay more for what they perceive to be a healthier and more natural drink. In fact, I have concentrated mainly on the new drink to replace Pepsi, but if we were to extend a similar logic to other carbonated drinks in PepsiCo’s portfolio, we could see a wave of premiumization taking place across the board.
In India we know of PepsiCo’s other carbonated drinks as Mirinda, 7-Up and Mountain Dew. As part of the innovation to healthier drinks and the premiumisation drive, PepsiCo could also relaunch some of these that might find a bigger and faster-growing market. For example, 7-Up could easily be relaunched as a tonic water, and a lemony sparkling water brand. And Mountain Dew, with its high-jinx adventure imagery lends itself beautifully I think to a sparkling energy drink. Different from Gatorade, though, which is an energy drink for sports professionals. Mountain Dew should also differentiate itself from Red Bull and Monster, in keeping the imagery one of good health, refreshing and energetic. As for Mirinda, it can either be retired now that there is Tropicana, or it can be relaunched as an orange squash, for at-home consumption. I have created a flow- chart representation to indicate the future paths each of these brands can take, although I have limited myself to the main brand, Pepsi in this article and in my brand strategy and campaign ideas.
You may read my thoughts on the brand strategy for Pepzi, the new drink from PepsiCo, how it will help build the Pepsi franchise, and the corporate brand PepsiCo, as well as the campaign ideas for the new drink, by clicking the link below.
Pepping up PepsiCo
Of course, the concept of the new drink, Pepzi, its taste, as well as its brand positioning and advertising concept ought to be tested among Pepzi target consumers first, before going ahead. Similarly for the new avatars of their other carbonated drinks brands such as 7-Up, Mountain Dew and Mirinda.
I must also say here, that even if Pepsi’s carbonated beverages are doing well and growing in other markets around the world – as it appears from their corporate earnings which I share in the strategy document – once PepsiCo decides to introduce the new drink and phase out Pepsi, the decision should be global. It should not be that PepsiCo innovates only for its home market in the US and some western countries, but the rest of their global market – most of which lies in the so-called Third World – is left to consume the old Pepsi, 7-Up, Mountain Dew, etc.
Here’s hoping that product innovation and a new brand Pepzi can show PepsiCo the way to a bright, new future. A world of healthy refreshment and positive energy, as PepsiCo begins to style lives, healthy.
Peripatetic Perch 