PepsiCo, the world's second-largest soft drink maker, launched a new marketing campaign at the beginning of the year, while No. 1 Coke launched its campaign three weeks later.
Soda makers, who have seen their highest-profile [image-nocss] products lose ground to energy drinks and pricey bottled water in recent years, are turning away from the lifestyle marketing that has dominated the soda wars. Now, they hope to draw customers back to the old favorites with a simple lure: they're cheaper-or at least a better value.
Coca-Cola's campaign includes 16-oz. plastic bottles of Coke, Coke Zero, Diet Coke, Sprite and Fanta for 99 cents. The new size could draw people looking for a bargain, in that a 20-oz. bottle costs $1.25 to $1.50. An ad campaign called "Open Happiness" and tied to the "Coke Side of Life" ads launched on American Idol last week.
"A lot of people have left the category," Beverage Digest editor John Sicher told AP. "Also, a lot of young people have not entered the category, so these ads may help Coke both recruit new young consumers and re-recruit some lapsed ones."
In recent years, as U.S. soda sales fell steadily-including 2.5% in the third quarter last year at PepsiCo, while Coca-Cola does not break out soft drink performance-the two turned to other bottled drinks for growth. PepsiCo refocused its drinks portfolio around bottled Lipton teas and Starbucks coffees, its Aquafina bottled water, Izze sparkling juice drinks and others. Coca-Cola made the biggest drinks acquisition in industry history in June 2007 when it bought Glaceau's VitaminWater for $4.1 billion. Though its products contain plenty of sugar, the brand had attracted health-conscious consumers with drink names such as Power-C, Defense, Endurance, Rescue and Multi-V.
But Coca-Cola CEO Muhtar Kent said last fall that soft drinks are the "oxygen of our industry."
The chief executives of both soda makers indicated they were refocusing on soft drinks last fall as consumers felt the weight of a recession but it had not yet been officially declared.
PepsiCo's push is "complementary" with the trend of shoppers trading down, the company's North American beverages chief Massimo D'Amore told AP. He declined to say the company was appealing to consumers' pocketbooks. "We will not communicate on price," he said. "Value to consumers is much broader than price. It's not the primary focus of our marketing."
D'Amore said PepsCo's drink portfolio is the "exact ammunition" it needs to win in the current climate. CEO Indra Nooyi has said the company, which also owns the Frito-Lay, Tropicana, Gatorade and Quaker brands, aims to slow the decline of U.S. soda sales.
Both companies are grappling with how to hold on to consumers that have grown wary of the high-fructose corn syrup that is used in a wide variety of bottled drinks, from soft drinks to bottled teas and energy drinks.
Meanwhile, two decades after adding the designation, the Coca-Cola Co. is removing the word "Classic" from its prominent location on the flagship cola sold in the United States., a company spokesperson said Friday. "The reason for being, for classic as a descriptor, has all but disappeared," Scott Williamson said.
The "Classic" tagline, right under the script Coca-Cola logo, was added in 1985, when the company introduced a formula that consumers called "New Coke." New Coke never caught on and was sold sparingly until it was dropped in 2004.
Williamson said Coca-Cola decided to make the change as it launches a new global marketing campaign it's calling "Open Happiness."
"Taking it off will modestly contemporize the brand because, to some people, classic doesn't sound youthful and contemporary," Sicher told AP.
While "Classic" is coming off the logo, the word will not disappear completely from Coca-Cola packaging. It will still use the phrase "Coke Classic original formula" in a less prominent place.
The change will show up nationwide during the first part of this year.
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