Cola wars take a turn towards semantics

Zac Bissonnette — Tue, 27 Feb 2007 12:40:00 EST

Filed under: Newspapers, Competitive Strategy, Coca-Cola (KO), PepsiCo (PEP), Marketing and Advertising, Coca-Cola Enterprises (CCE)

George Carlin is going to have a blast with this. In an effort to improve the unhealthy image of soft drinks/soda/pop/tonic, the Coca-Cola Company (NYSE:KO)is going to start referring to its product as a "sparkling beverage." Sales of these sparkling beverages were down 5% last year, as consumers sought healthier alternatives.

To be fair, Pepsi(NYSE:PEP) and Coke are making substantive changes as well. Coke is launching a new version of Diet Coke with vitamins and minerals and Diet Pepsi Max will be enhanced with ginseng and more caffeine. Both companies are also working on "hybrid brands" that will combine the appeal of soda (er...sparkling beverages...) with the healthier aspects of other beverages. And then there's the controversial Enviga, which claims to burn calories. Pepsi will also be changing the design of the Pepsi can 35 times this year, compared to four changes in the past 60 years.

Time will tell whether these marketing changes and product innovations will pay dividends for the soda companies. But I'm extremely skeptical that referring to soda as something other than soda will enhance its reputation. What do you think?

Cola wars take a turn towards semantics originally appeared on BloggingStocks on Tue, 27 Feb 2007 12:40:00 EST. Please see our terms for use of feeds.

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Pepsi gets Naked

Sarah Gilbert — Tue, 28 Nov 2006 18:13:00 EST

Filed under: Deals, Competitive Strategy, Coca-Cola (KO), PepsiCo (PEP)

PepsiCo, Inc. (NYSE:PEP) and The Coca-Cola Company (NYSE:KO), always one-upping one another, right? Yes... but this one-upsmanship was a lot longer in coming. Back in 2001, Coke bought Odwalla Juice, immediately positioning it in the highest-price (and, yes, most authentically healthy) segment of the non-alcoholic beverage market.

This month, Pepsi has finally countered that by purchasing Naked Juice Co, a part of the company's overall shift towards healthier options and, certainly, a move to raise the average price of their products -- or, as John Faucher from JP Morgan Securities puts it, "adding high growth, non-carb brands." While terms of the deal weren't announced, analysts say it was likely around $450 million.

The way I see it, this acquisition helps move Pepsi into the coffee shop, alongside its recent acquisition of Izze sodas. While Pepsi's cola and other sugary, fizzy drinks aren't exactly a has-been, Americans are spending more of their casual dining dollar in coffee shops, and less in fast food restaurants (not to mention the considerable health benefits of juice over soda). Pepsi is wise to position its beverages so that coffee shop owners won't mind putting them alongside their Guatemalan coffees -- and Naked Juice and Izze sodas are naturals there.

Pepsi gets Naked originally appeared on BloggingStocks on Tue, 28 Nov 2006 18:13:00 EST. Please see our terms for use of feeds.

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