PepsiCo’s Better-For-You Vending Machines, Non-GMO and Organic Plan

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PepsiCo Hello Goodness vending machine

PepsiCo isn’t waiting until the new year to make health-conscious resolutions. Bolstering its “better for you” commitment, the food and beverage giant this week unveiled revamped vending machines labeled Hello Goodness that will roll out in 2016 with a refreshed variety of healthy fare.

The move follows the company’s support of the non-profit Non-GMO Project and decision to introduce low or no-cal and organic versions of existing products, which were outlined at a key beverage industry event—the Beverage Digest Future Smarts Conference—in New York.

That’s where PepsiCo North America Beverages CEO Al Carey also announced, according to Beverage Daily and other media there, that a plethora of Better For You (BFY) products are launching in 2016, including an organic version of Gatorade, zero-to-low-calorie black iced coffee drinks under its Starbucks partnership, Naked Juice “Pressed” and zero calorie flavored unsweetened tea—in addition to new Mtn Dew Kickstart flavors and other new product launches.

Hold the phone: Organic Gatorade? “It’s a consumer interest. They’re very invested in non-GMO and organic, and to the degree you can make meaningful for the consumer, do it,” Carey reportedly told attendees.

He also observed at the conference, according to Beverage Daily, that almost half of PepsiCo’s products now fall into the good for you or better for you category, up from 24 percent in 1997. Many of those products will now be coming to an office, arena or other US venue where vending machines can be found in the coming year.

As PepsiCo notes in its Hello Goodness press release, its new vending machines will offer “good- and better-for-you product choices from the company’s diverse and highly complementary food and beverage portfolio. PepsiCo will place several thousand units throughout the US in 2016 in a variety of locations, including select healthcare, recreational, transportation, governmental, workplace and educational facilities.”

As for which brands will be offered, the full Hello Goodness vending machine—which will also be available in a beverage-only version—features “a thoughtfully-chosen selection of PepsiCo products such as such as Naked Juice, Smartfood Delight popcorn, Lay’s Oven Baked potato chips, Quaker Real Medleys bars, Pure Leaf iced tea, Propel Electrolyte Water, Tropicana Pure Premium and Sabra Ready-to-Eat Hummus cups.”

The innovative machines also go beyond traditional vending machines with:

• digital point-of-sale touch screen with product nutritional information
• suggested food and beverage pairing ideas for different eating occasions throughout the day
• smart equipment, giving PepsiCo real-time consumer preference insights to further inform future offerings
• dual climate-control shelving, allowing both perishable and non-perishable items to be easily vended together at the correct temperature
• cashless and digital vending.

“Consumers want more choice when it comes to what they eat and drink on-the-go and we’re providing the choices they want,” stated Kirk Tanner, COO, PepsiCo North America Beverages. “For years, PepsiCo has been transforming its portfolio to offer more and better food and beverages. We’re continuing this journey with our new Hello Goodness vending initiative, which brings together the power of our brands and our expertise in design, category management and equipment innovation expertise.”

In another change that’s coming in 2016, PepsiCo recently announced that labels on Tropicana Pure Premium orange juice and four of its brand siblings early next year will begin carrying the butterfly seal conferred by the Non-GMO Project, a nonprofit group that verifies products as being free of genetically engineered ingredients, according to the New York Times. 

The company has been among the biggest corporate opponents of state efforts to impose labeling requirements on such foods, but consumers want to know where brands stand and how their products rate.

“Consumers today have a desire for transparency from brands, and that desire is only going to increase,” said Bjorn Bernemann, VP and general manager of Tropicana in North America, to the Times.

PepsiCo won’t have to make any changes to its products to meet the verification as oranges are non-GMO, although adding the seal may help reassure those consumers who are concerned about GMOs and want the confidence of third-party verification of any non-GMO claims directly on product packaging.

“Some consumers,” Bernemann told the Times, “are expressing a desire to get beyond what brands are actually telling them, and we felt having external verification would give our customers assurance.”

As PepsiCo states on its website, its goal is to educate consumers about GMOs so they can make informed choices: “PepsiCo will continue to engage in an informative dialogue with our consumers so that they understand the safety, prevalence and benefits of GM ingredients and can make informed choices for themselves and their families.”

While a non-GMO label may help reassure some customers, PepsiCo already offers non-GMO fare—but consumers may not know unless they’re identified as such on a package or label.

“We’ve got products on the market today that are not GMO,” PepsiCo Vice Chairman and Chief Scientific Officer Dr. Mehmood Khan told brandchannel earlier this year. “Potatoes are not GMO. So if someone has the desire for that type of product, we have that. It’s all about choice.”

“There is no scientific basis to think GMOs are more or less safe than anything else,” Khan also told us. “The federal government and the American Medical Association have said that.”

In another change as it refines its “better for you” food strategy, PepsiCo has decided it’s time to exit the yogurt business, ending its 2012 Muller Quaker joint venture with Germany’s Theo Muller Group that launched a yogurt co-branded with Muller and with PepsiCo’s Quaker brands. PepsiCo has sold the plant in New York where it made the yogurt to the Dairy Farmers of America cooperative.

Yogurt is a highly competitive category in the US, of course, where PepsiCo has a 2.2 percent share of the US market, which is flat from 2014 according to Euromonitor International. When it entered the space, PepsiCo steered clear of the Greek-style yogurt products from the likes of Chobani, Dannon and Yoplait that already dominated the category.

Its hope was that the Muller Quaker brand’s “innovative premium” products would add differentiation and taste excitement to the category. “It’s been an ‘I gotta have it because it’s good for me’ kind of product,” Mehmood Khan, who oversaw PepsiCo’s global research and development and is now vice chairman, commented at the time. “The ‘wanna have it’ was missing.”

While yogurt is now missing from its US portfolio, innovations such as organic Gatorade and other developments show that PepsiCo won’t rest until it meets the needs of consumers to have healthful, informed choices in the grocery store and beyond.

And as a purpose-driven company and supporter of the American Beverage Association’s commitment to reduce 20 percent of beverage calories consumed per person by 2025,  PepsiCo is a key player in an industry-wide push to make 2016 the start of a healthier year across the board—and brands.

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