Pepsi Parties With “Coke’s” Santa for First Campaign in Three Years


Pepsi tonight unveiled its new summer campaign, with the tagline “Summer Time is Pepsi Time” and a none-too-subtle tweak at its chief rival in the cola wars. Yes, Virginia — that’s Santa Claus, the iconic Coca-Cola brand mascot.

Saint Nick is shown boogying on summer vacation (with assorted elves in tow) to the Pepsi beat — and rejecting a bartender’s offer of Coke. Watch it below and tell us what you think.[more]

The Wall Street Journal, in a lengthy profile on the brand’s first major ad push in three years, says this commercial represents PepsiCo’s refocusing on its flagship Pepsi brand, “offering one of the most visible signs PepsiCo is throwing new weight behind its biggest brand after it sank to No. 3 in U.S. soda sales last year, trailing not only Coke but Diet Coke.”

After it broke on TV and was posted on Pepsi’s Facebook page, the ad quickly swept FB…

…and Twitter, where viewers picked up on the tweak at “Coke’s” longrunning affair with Santa:

While it’s breaking in the lead-up to the July 4th holiday in the US, the campaign missed last week’s official start of summer in the Northern hemisphere. 

“Would I have liked to have it 30 days ago? Yes,” said Keith Reimer, CEO of Pepsi Bottling Ventures LLC, to the Journal, adding that he’s excited PepsiCo is putting more money again behind Pepsi, which has also been challenged by a shuffle in its marketing ranks.

The campaign also comes as some observers — including brandchannel’s cola-spondent Dale Buss — accuse PepsiCo of taking its eye off the ball by allocating more resources to social marketing (for its Pepsi Refresh crowdsourced corporate citizenship campaign) than traditional marketing. PepsiCo execs duly promised a “turnaround” and fresh focus on boosting Pepsi this year.

According to WSJ, PepsiCo plans “to spend about 30% more this year on TV advertising for its North American beverages, with soda a big focus. In addition to the summer ad campaign, Pepsi will be hawked on Simon Cowell’s X Factor in a $60 million sponsorship deal starting this fall. The company also recently launched new TV ads for Diet Pepsi and Pepsi Max, two smaller-selling colas.” That Diet Pepsi campaign featured Sofia Vergara and David Beckham, while Pepsi Max pegged its latest campaign to baseball with a “clubhouse in the corn” theme.

The Journal notes that PepsiCo CEO Indra Nooyi has been taking the brunt of the criticism. She was hailed “as a strategic visionary since taking PepsiCo’s reins nearly five years ago,” but has been

“facing doubts from investors and industry insiders concerned that her push into healthier brands have distracted the company from some core products. Emphasizing fruit juice, oatmeal and Gatorade, she has set an ambitious goal of more than doubling revenue of nutritious products to $30 billion by 2020 while cultivating a corporate image tuned in to health and global social responsibility. ‘Is she ashamed of selling carbonated sugar water?’ said Pat Weinstein, owner of Seattle-based Weinstein Beverage Co., an independent Pepsi bottler. ‘That’s a question that is raised often by the most concerned of the independent bottlers.’

As we noted in March, when Beverage Digest released its analysis of US sales figures for 2010, U.S. sales of Pepsi-Cola and Diet Pepsi fell 4.8% and 5.2% last year. Coca-Cola and Diet Coke sales slipped, “more modestly” as the Journal puts it, 0.5% and 1%, respectively.

Nooyi defends the Pepsi strategy in a sidebar to the Journal article, noting that she’s sticking to her guns in refusing to chase Coca-Cola for market share in a “scorched earth” battle of the colas in the shrinking cola market, telling the reporter that

“What’s been happening in this category forever: we, Pepsi, would push like hell to get a program with the [retailer], we’d spend everything, and get a tenth of a point of market share,” she said. “The next period, Coke would come along, push like hell, and gain a tenth. This was a zero-sum game. The cola category was profitable, but didn’t grow profits.”

PepsiCo is pursuing a dual strategy for cola, Ms. Nooyi said. The company is spending money to maintain its base business but also is searching for a breakthrough in sweeteners that will yield a naturally sweetened, zero-calorie cola, what Mrs. Nooyi calls “the ultimate nirvana.” The company raised its research and development budget to $488 million last year from $388 million in 2008. “We are confident that we will reinvent the cola business the right way,” she said.