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Pepsi's Next Innovation: Buy a Soda, Send a Gift, Play a Game, Charge Your Phone

Posted by Dale Buss on October 8, 2012 02:17 PM

Now that PepsiCo has begun marketing in its flagship Pepsi brand in a much more significant way this year, investors, analysts and other pundits are giving PepsiCo CEO Indra Nooyi the benefit of the doubt as she continues to unfold her strategy for making the company a major player in better-for-you markets rather than just a traditional purveyor of snack foods and soda beverages. From Australia to India, from vending machines to sweeteners to ad agencies, PepsiCo is pushing to innovate.

Case in point: PepsiCo just announced a pilot rollout of its Pepsi Interactive Vending machine pilot program, allowing consumers in a handful of U.S. locations to not only buy a beverage, but also send virtual gifts, play games and even charge their mobile devices. In addition to buying a Pepsi, Mountain Dew, Sierra Mist Natural, Aquafina or Lipton Green Tea, users can also gift a 20-ounce bottled beverage to a friend by entering the recipient's name and email along with a personalized message. That person, in turn, can send a gift back to the gift-giver — or pay it forward by sending their own gift to another friend.

The next-generation social vending machine is "part of a broader global platform of equipment innovation we're developing to engage consumers," stated Mikel Durham, PepsiCo's Global Growth officer. "The pilot launch of our Interactive Vending equipment is an exciting step in transforming the point-of-purchase experience," added Margery Schelling, the company's Global Innovation officer.

Thanks to the machine's digital advances, soda-buyers can also compete in an on-screen random chance game to win a free 20-ounce bottled beverage that can be redeemed immediately or at a later date at any Pepsi Interactive Vending machine. They can also charge their mobile devices while enjoying a PepsiCo beverage by plugging into specially designed AC power outlets and USB ports directly from the machine.

Competing with Coca-Cola's futuristic Freestyle machines, the Pepsi machines' touchscreen technology also displays nutritional information, current PepsiCo beverages campaigns (witness the "Live for Now" branding), TV commercials and other video promotions. On the analytics side, vendors can tap into "PepsiCo’s pioneering use of telemetry" to closely manage inventory levels and delivery scheduling remotely, and easily update digital content and messaging online as needed.

At its global headquarters in Purchase, NY, meanwhile, global CMO Salman Amin is busy consolidating its roster of ad agencies — as General Motors did a year ago — in an effort not only to drive economies of scale but also to push more resources to what consumers see and to create ad-agency partners who understand the company and its diverse brands, marketing initiatives and businesses better. "The goal is not to cut money; the goal is to refocus money ... against consumer-facing activities," Amin told Forbes. In a bid to elevate its brands' creative, PepsiCo recently named a chief design officer, recruiting Mauro Porcini from 3M, where he "turned pedestrian Scotch tape and Post-it note dispensers into desk art," noted Bloomberg. He's tasked with helping PepsiCo make design statements with its products a la Apple.

PepsiCo's innovation push also extends to ingredients. In Australia, for example, it is rolling out its reduced-calorie Pepsi Next brand with stevia, the "honestly sweet" natural plant-based sweetener; it also includes some sugar. The Pepsi Next introduced this year in the United States doesn't rely on stevia, even though PepsiCo has a joint-venture stake in the stevia-based sweetener, PureVia. That may be because many Americans are reporting disappointment with a bitter afternote in stevia-based beverages.

Meanwhile, in India, PepsiCo is rapidly renting IT services to help the company crunch numbers for its increasing reliance on "big data" to uncover patterns across the company and in the market that may be ripe for exploitation. And in China, PepsiCo has opened its sixth food-manufacturing plant to help reach its goal of investing $2.5 billion in that market in the three years ending next year.

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