Slowly and perhaps surely, it looks like Pepsi is coming back against Coke in North America. By the time Beyonce headlines the Pepsi-sponsored halftime show during the telecast of the next Super Bowl in February, the brand may be celebrating more than her performance.
Pepsi had flat sales volume when taking into account a calendar shift during the third quarter, company executives told analysts on a conference call on Wednesday, but market share improved by volume and dollars. It's one of the first tangible signs that a significant recommitment to the brand by PepsiCo CEO Indra Nooyi, launched last year, is gaining some traction.
At the same time, Nooyi told the analysts that PepsiCo's overall organic revenue was only flat during the period on a 3-percent decline in volume, which she blamed on a 7-percent volume drop in non-carbonated drinks that on longer were profitable. "It's important that we don't chase unprofitable businesses and unprofitable categories," she said, according to the Wall Street Journal.
PepsiCo investors and retailers began rebelling a couple of years ago when sales of the flagship Pepsi soda brand began lagging so badly in the United States that it fell behind Diet Coke; regular Coca-Cola remained No. 1. The company had put a lot of marketing resources into innovations such as the Pepsi Refresh social-media based community funding project — but they weren't yielding sales in the age-old battle between Pepsi and Coke.
So last year, Nooyi recommitted to marketing Pepsi in a more traditional way as well as digitally. The brand signed on to sponsor The X Factor on Fox, the Simon Cowell reboot of the hit UK talent show that began countering the success of his previous vehicle, American Idol — whose major CPG sponsor is Coca-Cola.
And this year, PepsiCo commited to plowing at least $600 million in additional advertising money behind its top brands, including renewal of its previous sponsorship of the Super Bowl halftime extravaganza which, lately, had been held by Bridgestone. The introduction of the mid-calorie Pepsi Next is also helping boost the brand's North American market share.
So when Beyonce thinks of her sponsor during her Super Bowl show early next year, instead of singing her hit "Ring the Alarm," she can warble something more appropriate ("Crazy in Love"?) for Pepsi's new momentum.