In a very recent post, I looked at Pepsi and other snackfood companies and discussed how they are acquiring healthy brands an dintroducing healthier products to achieve some modicum of growth in the flat snackfoods business. But what about the other side of Pepsi's portfolio--soda?
It depends on where you come from, whether you call it soda, cola, or pop, but the one thing we can all agree on is that the category has been in decline for quite some time now. And the diet category is falling even faster than the sugary segment, if you can believe that, and these truths has been covered rather thoroughly during the seven years I have been writing this blog. It's fun to talk about soda. Pepsi was, of course, aware of the need to diversify its product mix 20 years ago when they acquired SoBe Beverages and, in doing so, entered the lucrative natural products category, which is still in high growth. And so they are no stranger to the consumer shift in tastes.
Indeed Pepsi, Coke and Dr. Pepper Snapple have been busy for the past 10 years adding products like coconut water and kombucha to offest the reduce demand for sugary drinks and diet sodas. Dr. Pepper Snapple recently merged with Keurig Green Mountain to get a piece of the coffee market and offer more single-serve soda. And Pepsi just announced that it is launching a selzer water brand called Bubly, which certainly sounds fun. I can't wait to see the marketing campaign. Coke has been a little slower to change, betting instead that soda drinkers in 2018 will stay with them if they offer flavored Diet Coke products, which were advertised during the Super Bowl.
It will certainly be interesting to see how this new strategy plays out. These are very big companies operating in a largely declining category; but it's best to always remember the "power of place". Large-scale distribution and the premium shelf space that comes with it gives these beverage giants a huge competitive advantage over smaller players and upstarts. Marketers with deep pockets can continue to introduce new products, promote the heck out of them, and give them premium shelf space for many, many years before they run out of time or money. So with a little bit of marketing savvy, these brands really should be able to adjust to changing market conditions and get a couple of hits among the many misses we are sure to see.
Discussion: Do you think these three brands have the best strategies going forward? Look at each and discuss. What else can these big soda brands do to achieve growth?
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