PepsiCo Elevates Diet Brand to Stardom

17 March 2005

US soft drinks giant PepsiCo has seen - and heeded - the writing on the wall.

Health issues and obesity fears are driving consumers to more wholesome alternatives, impelling the company to maximize its marketing might behind its diet brand range.

Diet Pepsi will become the company's flagship, backed by around $60 million (€45m, £31m) in marketing spend this year - double 2004's budget.

Spend on regular sugar-sweetened Pepsi-Cola is likely to fall below last year's $156m but, as the brand has nearly double Diet Pepsi's US market share (by volume), drastic cuts are not expected.

Diet Pepsi will be marketed as a hip, cool brand for everyone, including teenagers and Baby Boomers with its own new tagline, "Light. Crisp. Refreshing." Pepsi will be targeted at under-25s, Latinos, African-Americans and sports fans.

Diet brands have been increasing market share since 2000.

Diet Pepsi rose 6.7% by sales volume last year, moving ahead of the Coca- Cola Company's Sprite brand to become the number five soda in the US by market share, according to Beverage Digest/Maxwell data.

PepsicCo's arch rival is adopting a different strategy. Coke's chairman and ceo, Neville Isdell, has decreed a return to "iconic" advertising for the Coca-Cola Classic brand and more innovation in diet drinks [WAMN: 2-Mar-2005].

The company believes successful marketing of Coke Classic will rub off on Diet Cokeand the company's other products.

Data sourced from Wall Street Journal Online; additional content by WARC staff