PEPSI UNVEILS AD CAMPAIGN EMPHASIZING FOOD AND COLA

By Chad Terhune
Wall Street Journal
November 20, 2003

That meatloaf would taste even better with a Pepsi.

That's one of the messages coming from PepsiCo Inc. behind its first new slogan for its flagship cola since 1999. The new advertising campaign, "It's the Cola," replaces "The Joy of Pepsi" and its original version, "The Joy of Cola."

Pepsi unveiled the first three TV commercials in the campaign as well as initial radio spots and outdoor advertising. Pepsi said the TV ads will begin airing this Sunday during National Football League games and prime-time shows.

"Our whole new campaign is about driving consumption of food and Pepsi," said Dave Burwick, chief marketing officer of Pepsi-Cola North America. "If this was your last cheeseburger ever, you would want Pepsi, not peach iced tea."

The problem for Pepsi, Purchase, N.Y., and rival Coca-Cola Co., Atlanta, is that consumers are increasingly reaching for those flavored teas, waters and other noncarbonated drinks at the expense of colas. Pepsi-Cola volume dropped 5.5% for the first nine months of this year, while Coca-Cola volume fell 2.9%, according to Beverage Digest. Those figures exclude fountain and vending sales.

Industry observers say it's imperative for Pepsi and Coke to stabilize their cola business because it requires so much growth in their smaller brands to make up for even slight declines.

Katie Lacey, Pepsi's vice president of colas, said the cola category has been losing "drinks, not drinkers" to the proliferation of new beverages. She said the goal is to reclaim those "cola occasions" by emphasizing food, fun and energy in the new campaign.

Pepsi's longtime agency, BBDO, a unit of Omnicom Group Inc., created the ads. Pepsi said it planned up to 12 different TV commercials in the new campaign.

"It is an exceptionally versatile theme and gives them a lot of latitude in terms of directions they can take the creative," said Gary Hemphill, senior vice president at Beverage Marketing Corp., an industry consultancy in New York.

Coke has paired cola with food for decades. In the 1920s, Coke's advertising featured its signature soda with hamburgers and hot dogs.

"We are going to a whole new place (Coke) has never been," Mr. Burwick said.

Pepsi will be counting on TV ads like "Summer Job," which features a young woman dressed in a hot dog costume passing out leaflets for the grand opening of Wiener World. She becomes distraught when passersby ignore her, but she finds a friend in a young man dressed as a Pepsi can outside a nearby store. They walk off holding hands.

Another TV ad, "Tailgating," shows a group of men grilling out before the game and reaching for ice-cold Pepsi. The third TV ad shown, "Vacuum," has comedian Dave Chappelle losing his pants to a robotic vacuum thirsty for his Pepsi. Several radio ads, also heavy on humor, emphasize that Pepsi is the "difference between a good lunch and a great lunch."

In the outdoor ads, Pepsi plans to post signs in delis and stores with lines such as, "That pastrami and rye would taste even better with a Pepsi" and an arrow pointing to the product nearby.

In several of its new ads, particularly billboards, Pepsi pairs its cola prominently with burgers, pizza and fries.

Some public-health advocates found that somewhat surprising given the growing concerns about obesity. "To promote their sugary beverage with burgers and pizza is sending two wrong messages, not just one," said Tracy Fox, a registered dietitian in Bethesda, Md.

Larry Cohen, executive director of Prevention Institute, a national nonprofit organization in Oakland, Calif., that focuses on community health, said that Pepsi is reflecting what many consumers eat, but he worries that such advertising reinforces an unhealthy diet.

Pepsi said a variety of foods would be featured over time. "We don't want to be too apologetic," Mr. Burwick said. "People can have pizza and hot dogs and not get obese."

There are also logistical reasons why certain foods were used in some ads. "You can't spiral a chicken breast," Mr. Burwick joked, explaining why one of the tailgaters throws a hot dog to a friend across the stadium parking lot.

Pepsi traditionally kicks off new advertising with a big Super Bowl splash, but this year executives didn't want to miss a marketing opportunity during the holiday season, particularly with their emphasis on food and social gatherings.

For the upcoming Super Bowl, Pepsi plans an ad about its promotion next year with Apple Computer Inc.'s iTunes Music Store.

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