With all the pontificating about the performance of traditional PepsiCo beverage brands such as Pepsi, it's easy to lose sight of a bright spot shining forth from the company's voluminous beverage portfolio, and one emanating from its controversial stable of better-for-you products as well: Trop50.
The low-calorie juice brand, sweetened with stevia and marketed in a campaign featuring 30 Rock's Jane Krakowski that originated in Canada, is headed to $300 million a year in sales after only three years on the market — a pittance, revenue-wise, compared with conventional orange juice, where PepsiCo's Tropicana brand is one of the leaders. But it's been an impressive ramp-up for a new product in a mature segment where all sorts of things have been tried before.
"We went after a segment who love the goodness of juice without also limiting calorie consumption," Kate Keller, Trop50's director of marketing, told brandchannel. "And they don't want to sacrifice the great taste of juice. They're getting the goodness of juice and taste and sugar at half the sugar and calories — it's pretty simple for them."
PepsiCo is trying other strategies to squeeze profits out of its Tropicana brand too. One of them is to water down some juice products because some consumers prefer thinner consistencies, according to its research. Still recovering from its re-packaging fiasco of a few years ago, the $6-billion Tropicana brand now is focusing more on blends and other innovative, high-margin products such as Trop50.
Trop50 is attempting to leverage its success in new ways, including a diversification into juice-tea blends and a switch to PEP bottles last year from paper cartons because, Keller said, "consumers "like to see juice and its natural qualities."
Clearly, consumer acceptance of stevia as a sweetner has been key to Trop50's rise, even as some reviewers call it a Tang or Sunny D to Tropicana's "real" OJ. Provided by PepsiCo's joint venture, PureVia, the natural sweetener takes away one of the historical objections to reduced-calorie orange juices. "A lot of 'light' offerings have artificial sweeteners," Keller said. Because Trop50 doesn't, she said, "consumers are able to look at it not as a hybrid but as the best of both worlds."
Meanwhile, the ripples from PepsiCo's recently announced expense-cutting program continue to flow, including this look at a communication from the company's HR department about 401(k) cuts. And so do moves from its accelerating global competition with Coca-Cola, such as a report that Coke is cutting prices in India for the first time in nearly a decade, something that is sure to prompt a response from Pepsi.