New Tricks Needed
PepsiCo is the US's largest food-and-beverage company and the second largest in the world. Made up of billion-dollar brands like Tropicana, Gatorade, and Quaker Oaks, PepsiCo plans to keep its lead in the food market by becoming an innovator in a new "healthy snack" market.
The Good Company
PepsiCo wants consumers to buy its products because consumers consider PepsiCo to be "the good company," not just the maker of consistently tasty snacks. Unhealthy snacks and sugary beverages are leading contributors to the obesity crisis especially amongst children. According to Indra Nooyi, PepsiCo's CEO, the company has to evolve to address this issue.
Nooyi's long term strategy is to make "nutrition business" and "good-for-you" products an increased part of the company's portfolio. She is pushing for snacks to be made more out of grains, fruit, nuts, vegetables, and dairy and wants to introduce products like "drinkable oats" beverages, vegetable soups, and coconut water.
Pepsi's desire to be the good company can be seen in its advertising decisions last year. Pepsi's Refresh campaign was an innovative marketing strategy that made a social impact by awarding $1.3 million to grassroots organizations. Winners used the funds to help Gulf residents after the BP oil spill, brought arts to youth, and created a park in the Bronx.
PepsiCo came up with the money by not advertising during the SuperBowl. Although this helped the company's image as well as many deserving small groups , advertisers do not think it garnered the massive support that PepsiCo was hoping it would because of tech glitches and cheating allegations.
Less Salt, Same Salty Taste
Now PepsiCo is handling its "good company" image in two different ways.
First, it's using scientific innovation to lessen the sodium in PepsiCo's Lay's Potato Chips. The new type of salt, called Crystal Salt, is shaped differently than normal salt as to be more soluble on the tongue. This way it tastes just as salty to consumers, but it diminishes the chip's sodium content by one third.
Although this makes the chips healthier in comparison to the old version, Marion Nestle, NYU Professor of Nutrition and Public Health, points out that the truly healthier option would be to get people to desire less salt. She says, "The philosophical question that you have to ask about these products is: Is a slightly better for you option a good choice? When what you really want is you want people eating foods that are as unprocessed as possible."
PepsiCo is also trying to garner support by making conventions in social networking into non-cyber marketing campaigns. At a Chicago trade show PepsiCo introduced a "social vending" machine.
Shaped like a traditional vending machine, the social vending machine has several functions. The first is normal - you can buy a Pepsi.
The other functions are new. You can send a friend a Pepsi by entering someone else's name, phone number, and a text or video message. The friend will get a code, which they can punch into any Pepsi social vending machine and get their Pepsi. They can then choose to send the gift along.
This machine seems to be targeted at younger people for whom social networking is an integral part of their lives. Problematically, PepsiCo will have to find a way to work with the fact that most schools are increasingly not allowing sugared beverage vending machines inside their walls.
The social vending machine is reminiscent of the various "gifts" that pop up periodically on Facebook (remember bumper stickers?) but Mikel Durham of PepsiCo thinks this idea will catch on and stick.
"Social Vending extends our consumers' social networks beyond the confines of their own devices and transforms a static, transaction-oriented experience into something fun and exciting they'll want to return to, again and again," he says in a press release.
More importantly to PepsiCo's overall image promotion, "Our vision is to use innovative technology to empower consumers and create new ways for them to engage with our brand," he continues.
Marketing Innovation, But Is It Healthier?
From an advertising and marketing standpoint, PepsiCo is commendable for it's bold strategies and innovative approaches to advertising in the digital age.
However, PepsiCo will need to start making healthy food if they want to be a healthy company, and it is yet to be seen if manufacturing snack foods, soda, and chips will ever be nutritious.
Time will tell whether its healthier foods and social network machines will convince consumers to view PepsiCo as "the good company" it wants to be perceived as.
- Snacks for a fat planet (The New Yorker)
- Sugary drinks vs. obesity: power politics in action (Food Politics)
- PepsiCo aims to chip away at sodium content with Crystal Salt (APM Marketplace)
- Social soda? Pepsi testing social vending machines (San Francisco Chronicle)