BEVERAGE FORUM 2019

How big soda is taking an ‘honest’ approach to consumer health habits

By Beth Newhart contact

- Last updated on GMT

Re-positioning soda and co-locating CPG divisions are just some of big brands' strategies. Pic: Getty/jonnysek
Re-positioning soda and co-locating CPG divisions are just some of big brands' strategies. Pic: Getty/jonnysek

Related tags: Pepsi, Pepsico, keurig dr pepper, Dr pepper, soda

PepsiCo, Keurig Dr Pepper (KDP) and other major soda brands are still learning to grapple with the health and wellness wave that’s causing consumers to drop their sugary drinks for something ‘better-for-you’. Executives spoke at the 2019 Beverage Forum about honest advertising and building a succession plan.

There are more healthy beverage choices now than ever, packed full of functional, organic superfoods. Pressed juices, kombuchas and flavored waters line the supermarket shelves, pulling customers away from traditional soda in the search of something healthier.

Meanwhile, it has been a challenge for big brands like Coca-Cola, Pepsi and Dr. Pepper to stay relevant and maintain a loyal audience when there's a consumer backlash against sugar and additives. Many have shifted to different marketing strategies, quick innovation and interactive ad campaigns to keep up.

According to Derek Dabrowski, VP of carbonated beverages, marketing at KDP, sodas aren’t consumed now the way they once were, and big companies have to realize that “they don’t solve the world’s problems.”

“We have to embrace what they are and talk really honestly about them,”​ he said.

Dabrowski said that KDP has tried to shift to ‘honest content’ because he believes the best brand messaging comes from it.

The current campaign for Diet Dr. Pepper, ‘It’s the Sweet One,’ takes this approach, as it depicts a singing mascot that pops up to reward consumers with the drink after they’ve completed a difficult task.

By positioning the drinks as a sweet, indulgent treat, KDP thinks it will take away some of the stigma shoppers now experience when purchasing soda.

“The most honest thing we can say about Diet Dr. Pepper is, it’s not a guilt-free situation anymore. There’s baggage attached there,”​ Dabrowski said.

Leveraging adversity

Al Carey, the former CEO of PepsiCo North America, said that he found success in his long career by planning for the future and doing more listening than talking. At the Beverage Forum in Chicago this month, he discussed navigating the North American branch of PepsiCo into the health and wellness wave.

He started with the company in 1981, and rose up through the ranks in sales. He retired this spring, but not before stacking his replacements. Carey went through the top 25 positions at PepsiCo North America and made sure that over time the company had at least two prepared successors for each role.

“That takes work. I don’t care how small your organization is, you need to have a succession line to help your future,” ​he said.

One of the ways he approached outside recruiting for PepsiCo was looking for candidates that had already overcome some career adversity, “did they have to dig themselves out of a hole, did they have to work through some difficult circumstances to be successful?”

“At one point I was a little intimidated because I thought people with pedigreed resumes were really the ones that did very well at PepsiCo,”​ he said.

Another legacy Carey left behind at the company was his involvement with the ‘Power of One’ initiative, first announced in 2011. It aimed to bring “together its top food and beverage leaders to leverage the combined scale of the company's complementary snack and beverage businesses across North, South and Central America.”

“Some of the young people now don’t want to move around so much. I moved ​[locations] 12 times in my career. My kids look at me like I’m crazy, they don’t want to move one time. And most of the young people coming up the ladder are that way,”​ he said.

The executive team at PepsiCo intended for co-located offices of the beverage and snack divisions to offer one insight, rather than three or four different insights. It allows PepsiCo to more easily move employees between divisions, making them comfortable and versatile with all facets of the company.

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