PepsiCo continues to ramp up marketing investments for its core brands including Pepsi, Gatorade, Lay's and Quaker. And so while first-quarter earnings showed a drop of 5 percent from a year earlier, the increased advertising outlays may be the harbinger of future top- and bottom-line payoffs from brands that critics say were underexposed for years.

Besides, PepsiCo CEO Indra Nooyi said this week, the additional marketing investments—which she promised for last year to the tune of an additional half-billion in global expenditures on core brands—are being offset by the fruits of the company's $3-billion productivity program.

"With the productivity we're unlocking, we're able to invest in growth drivers like advertising and new-product launches to simultaneously drive margin improvement," she told analysts on a conference call, according to Advertising Age. But, she cautioned, "Any growth we achieve in one area takes from another area where we compete."Continue reading...

New York politicians are making life difficult for anybody who sells sugared beverages, but it doesn't stop there. Recently, Dunkin’ Donuts came under fire from state comptroller Thomas P. DiNapoli, who doesn't usually deal with what restaurants serve to their customers.

The state’s pension fund owns 51,400 shares of Dunkin’ Brands Group (worth around $2 million) and DiNapoli has been working toward getting any companies the fund invests in to be more involved in sustainable practices, the New York Times reports. As a result of DiNapoli's work, Dunkin’ said Thursday that it would announce in the second quarter a timetable for obtaining the palm oil it uses in its products from sustainable sources.

“Consumers may not realize that many of the foods and cosmetics they eat and use contain palm oil that has been harvested in ways that are severely detrimental to the environment,” DiNapoli said in a statement. “Shareholder value is enhanced when companies take steps to address the risks associated with environmental practices that promote climate change.”

Meanwhile, Dunkin’ and other coffee vendors in New York City are preparing for the difficult task ahead of informing its customers about which of its drinks have more sugar than the new Mayor Bloomberg-pushed, American Beverage Association-opposed, NYC sugary drinks ban allows. According to the Times, Dunkin’ Donuts is handing out fliers to inform its customers while Starbucks is waiting until the rule goes into effect Tuesday before taking any action.Continue reading...

Opposition by two civil rights groups to New York City Mayor Michael Bloomberg's proposed ban of super-sized sodas and sugary drinks has triggered scrutiny of their ties to the beverage industry.

The ban, set to take effect on March 12 in city restaurants, stadiums and cinemas, was met by formal opposition at a New York court hearing on Wednesday by the National Association for the Advancement of Colored People and the Hispanic Federation — both well-known nonprofits dedicated to advancing the rights of minorities. The American Beverage Association has filed suit to block Bloomberg's plan, contending the mayor lacks the authority to enact a policy that it maintains will cause small-business owners to lose sales to drug and grocery stores. Many such stores are owned by minorities.

James Brandt, a lawyer for the association, argued in court that other sugar-laden drinks like milkshakes are missing from the ban, and highlight its arbitrary nature. The 16-ounce limit has “no justification in science,” he said. But Thomas Merrill of the City Law Department countered that, with more than 20 percent of New Yorkers clinically obese, “there is ample evidence that there is an obesity epidemic being driven by sugary beverages."Continue reading...

New York City Mayor Michael Bloomberg has been trying to get his citizens to live healthier lives (and consume less soda) so he’s probably not overly pleased about a new fast food branding heading to the Big Apple: the 60-year-old California-based Fatburger chain.

NYC already has 627 burger places, the New York Daily News reports, but Fatburger’s owners think they’ve got something special enough to separate them from the Shake Shacks, SmashBurgers, Five Guys, Steak 'n Shakes, and other burger-meisters.

Fatburger makes its sandwiches to order and serves up five different sizes, from a 2.5 ounce small to a monstrous, three-patty 24-ounce XXXL that’ll cost you about 2,000 calories (and more if you add on bacon, chili, and guacamole). Gothamist also notes that the “onion rings are ‘made from real onions’ and the shakes are hand-scooped.

So don’t expect Bloomberg to show up for the ribbon-cutting when Fatburger lands in Manhattan in the spring. Fatburger plans to open 10 lcoations across NYC in partnership with The Riese Organization, which operates more than 75 restaurants in NYC, including franchises for KFC, Pizza Hut, and TGIFridays.Continue reading...

New York City's ban on selling beverages bigger than 16 ounces that passed last month doesn't seem to face a major threat as it heads toward implementation in March. It's fat from popular with many New Yorkers, and the beverage industry and others certainly hate it, but the regulation has begun to assume the momentum of inevitability.

That's why the American Beverage Association, which represents Coca-Cola, PepsiCo and Dr Pepper Snapple Group among other companies, has launched a last-ditch effort that now includes a lawsuit against the city that the organization, as promised. The suit argues that the unelected New York health board, which approved the ban spearheaded by Mayor Michael Bloomberg, shouldn't be telling people how much soda to drink, according to CBS Radio. The suit also said that the rule "burdens consumers and unfairly harms small businesses."Continue reading...

To no one's surprise, the New York City Board of Health approved on Thursday a ban on the sale of large sodas and other sugary drinks at restaurants, street cars and movie theaters. It was the first restriction of its kind and scale in the country.

It also surprised no one that Mayor Michael Bloomberg, the spiritual father and political force behind the ban, quickly hailed the enactment of his brainchild. "NYC's sugary drink policy is the single biggest step any gov't has taken to curb obesity," he stated. "It will help save lives." The Mayor's Office also released statements of support, along with the news that the new Barclays Center will comply.

The measure will take effect in six months unless the American soft-drink industry manages to get some judge to overturn it. Of course, there's always the possibility that popular sentiment could turn heavily against the ban and result in political pressure that would cause its reversal. But no one is betting on that.

"This is not the end," Eliot Hoff, a spokesman for New Yorkers for Beverage Choices, an industry-financed group opposed to the ban, commented in a statement to the New York Times. "We are exploring legal options, and all other avenues available to us." The coalition's chairwoman, Liz Berman, also released a video statement reiterating that stance.Continue reading...

In the 1920s and early ‘30s of New York, as Prohibition ruled the land, folks didn’t have to go without a drink. There were speakeasies aplenty back on those days that would be happy to quench your thirst as long as you didn’t mind needing to remember the password, being ready to dump your liquor at the drop of a hat, and having a few extra bucks to help pay off any police that happened by the place.

The folks at Mountain Dew seem to think that New York City Mayor Michael Bloomberg is about to return the Big Apple to those long-gone days if his suggested bill — which could be passed today — winds up restricting consumers from buying sodas that are bigger than 16 ounces goes through. Some call it a gamble; Bloomberg says he’s looking out for the long-term health of his city’s dwellers and visitors.

The whole thing has got Mountain Dew execs and indeed the entire beverage industry agitated — and not because of the caffeine in their beverages, either. The PepsiCo-owned soda brand has teamed up with "cultural production" studio New York Art Department to plaster ads around New York City that say “Prohibition” and feature a 17 ounce, vintage can of Mountain Dew (long before it was abbreviated to Mtn. Dew). To drive the message home, a smaller message quips: “Also available in legal sizes!” 

On a more serious note, New Yorkers for Beverage Choices, an industry coalition backed by the American Beverage Association, says more than 250,000 New Yorkers have signed a petition. While small business and industry lobbying has failed to sway New York City’s Board of Health, which appears poised to pass the ban on Big Soda (update: it passed), you can be sure Bloomberg's public health watchdog is unhappy with another move Mountain Dew has made as well.Continue reading...

New Yorkers were girding for a showdown Wednesday between Mayor Bloomberg and the opponents to his proposed ban on 16-ounce or bigger soft drinks. A mid-afternoon public hearing was scheduled to debate the measure, which still needs approval by the city Board of Health — appointed by the mayor — to take effect.

The ban's opponents could always sue or appeal to the state legislature (or not, judging by Gov. Andrew Cuomo's recent remarks), but the "hundreds" of people who gathered on the steps of City Hall on Monday to oppose the ban, organized by a American Beverage Association coalition called New Yorkers for Beverage Choices, would rather put a stop to Bloomberg's legislation before it goes into effect.Continue reading...