Case 14. Pepsi One
•
14-1
C
ASE 14
PEPSI ONE
INTRODUCTION
On June 30, 1998, PepsiCo shocked the beverage industry with its introduction of a revolutionary new sugarfree cola with no aftertaste. Within one hour of FDA
approval of acesulfame potassium (ace K), the main
sweetening ingredient, the launch of Pepsi One was
announced. Samples of the new drink were in the hands
of reporters and bottlers within hours.
How was PepsiCo able to formulate a new core
brand so quickly? The answer is that Pepsi is no longer
an American company but has become a truly global organization. Pepsi has proven that it is a truly global company by developing a new product to satisfy an overseas
market segment. As the product was highly successful
in foreign markets, PepsiCo brought it back to the U.S.
market for a successful launch once ace K was approved.
pany with sales of $510 million. By 1970, PepsiCo had
grown to annual sales of $1 billion and had transferred
the corporate headquarters to Purchase, New York.
Diversity and Focus
Throughout the history of PepsiCo, there have been several purchases and sales of separate business entities
(Appendix 1). In the late 1990s, PepsiCo experienced a
period of rationalization and began to focus on the beverage and snack food markets. The most dramatic change
during this period was the divestiture of the restaurant
brands, Kentucky Fried Chicken, Taco Bell, and Pizza
Hut into the new Tricon Global Restaurants. Tricon was
spun off to shareholders on the basis of one share in the
new company for every ten shares of PepsiCo held.
Brand Development
PEPSICO CORPORATE HISTORY
Early Growth
In the 1890s the soda fountain was an integral part of the
town drugstore. In New Bern, North Carolina, a pharmacist named Caleb Bradham decided to develop a new
beverage that was both delicious and healthful. This
beverage would aid digestion and boost energy by eliminating many of the chemicals and narcotics in popular
fountain drinks. His new beverage was a huge success.
He started producing the flavoring syrup in his basement
and shipping it out to other drugstores in the region. By
1902 the formula was so successful that he decided to file
incorporation papers to expand into Virginia, Maryland,
Pennsylvania, and New York.
Now, more than a hundred years later, PepsiCo has
developed into a global giant with sales in the range of
$21 billion per year and a global sales force of 63,000
people. The current corporate entity of PepsiCo truly
began in 1965 when Pepsi-Cola, under the leadership of
Donald Kendall, and Frito-Lay, under the direction of
Herman W. Lay, merged their companies to create a com-
This case was prepared by Jason Blondé, Hemal Salot, Tanya
Savio, and Florian Schmid of Temple University’s Fox School of
Business and Management under the supervision of Professor
Masaaki Kotabe as the basis for class discussion rather than to
illustrate either effective or ineffective management of a
situation described (October 1999).
PepsiCo has concentrated on the development of major
global brands. In 1997 it held nine different brands with
over $1 billion in global sales (Lay’s, Doritos, Ruffles,
Cheetos, Pepsi, Diet Pepsi, Mountain Dew, 7-Up, and
Mirinda).
International Operations
PepsiCo’s revenues are highly skewed toward the American marketplace and international revenues account for
a small portion of total revenues and an even smaller
proportion of profits. During fiscal year 1997, PepsiCo
reported a strong balance between its snack foods and
beverage divisions. Each accounted for approximately
$10.5 billion in revenue, although profits in the snack
food division were significantly larger at $1.7 billion,
opposed to $1.1 billion for beverages.
In the beverage market, $8 billion was realized
in North America, while international operations accounted for only $2.6 billion, with a net loss of $137 million. The snack food business was also skewed with $7
billion in North American revenue; however, PepsiCo
achieved $3.5 billion in international revenue, for an
international profit of $318 million.
THE HISTORY OF PEPSI ONE — PEPSI MAX
The soft-drink market is one of the most active in terms
of product development. This drive for innovation pro-
14-2
•
Case 14. Pepsi One
vides manufacturers with the tools to produce top-class
beverages from milk and fruit juice combinations to
great-tasting reduced-calorie carbonates.
Pepsi One, launched in the U.S. market in October
1998, is one of the latest and biggest of these innovations. The product is an innovation in the U.S. market but
was actually already launched under the name Pepsi
Max in Europe in 1993.
Carbonated soft drinks are not as popular in Europe as they are in other markets, especially in the
United States. In terms of servings per capita, they rank
only seventh, tied with bottled water (Appendix 8). With
only 191 8-oz. servings per capita, compared to 861 in the
United States. European soft drink consumption is only
one-eighth of what it is in the United States. It only accounts for 5.6 percent of the total beverage consumption, compared to almost 30 percent in the United States.
Europeans prefer, in descending order, tap water (including “other’’; see Appendix 8), milk, tea, coffee, and
beer. But these facts do not mean that Europe, and especially Western Europe is a small market. On the contrary, Western Europe consumes 26 percent of the world
production of soft drinks (Appendix 9).
International market share of diet soft drinks in
1993, at 4 percent, paled in comparison to the U.S. market share of diet soft drinks, a whopping 27 percent. Rival Coke’s international sales were three times that of
Pepsi’s in 1992, and its edge on diet sales in particular
was even wider. In competing with Coke overseas, Pepsi
has to deal with Coke’s greater visibility and dominance
in Europe.
Hoping to expand its share of the international
soft drink market, Pepsi launched Pepsi Max. The idea
grew out of foreign consumers’ reluctance to try diet
colas. Pepsi decided to set out to find out what customers really wanted. In market research with overseas consumers, Pepsi discovered that consumers were
hesitant to try colas that were labeled “diet’’ or “light,’’
as these terms were perceived to indicate that the
products were meant for the obese or diabetics. The
name Pepsi Max was cleverly chosen to avoid any reference to the word diet. “Maximum Taste. No Sugar,’’
was the line used to convince reluctant consumers.
Interestingly enough, the name Pepsi Max was chosen
out of a list of thirteen possible names including
Pepsi One.
Not only were overseas consumers turned off by the
negative image associated with the word diet, they also
didn’t like the taste of artificial sweetener-based diet colas. Consumers tested expressed dislike of the aftertaste.
Since there are many ways to explain tastes and flavors,
Pepsi set up panels from its research centers to define a
common vocabulary to describe subtle variations in taste
of colas. After extensively cross-checking their findings
with consumers, Pepsi determined four different ele-
ments that defined “aftertaste.’’ With this information
Pepsi was able to focus on finding a suitable blend of
ingredients that would produce a muted aftertaste.
Pepsi Max spent three years developing a product
that would not taste like typical diet cola. Pepsi Max
contains the same base oils as Pepsi but in the place of
sugar, there is a mixture of aspartame and acesulfame K,
a product that was not yet approved for consumption in
the United States at the time. Pepsi Max is described as a
no-sugar product with a full-bodied cola taste. According
to Jesse Meyers, publisher of the Beverage Digest newsletter, it tastes more like Pepsi than Diet Pepsi.
In April of 1993, Pepsi Max was launched in two test
markets; the United Kingdom and Italy. These two countries were chosen because they represented opposite
ends of the European diet cola consumption spectrum.
In the United Kingdom in 1993, diet colas represented
approximately 17 percent of the total carbonated soft
drink market, and in Italy they represented only 3 percent of the market.
In September 1993 it was launched in Ireland because of research that showed that more than two-thirds
of regular cola drinkers are concerned about sugar intake. Pepsi Max was then introduced in France, the
Netherlands, Ireland, and Australia in December 1993. In
the beginning of 1994, Pepsi Max was introduced in
Canada where market research found that Canadians
appreciate product innovation in soft drinks.
By the end of 1994, Pepsi Max was present in
twenty markets including Spain, Portugal, Sweden, Denmark, Norway, Greece, Japan, Thailand, New Zealand,
and Uruguay and planned to enter thirty more markets
by the end of 1995. By early 1994 Pepsi Max held 1.3
percent of the cola market in France, 3 percent in Australia, 3.2 percent in the Netherlands, 3.5 percent in
Britain, and 4.8 percent in Ireland. In September 1995,
PepsiCo stated that Pepsi Max would have more than
$500 million in sales and projected a growth rate of 70
percent for that year.
The target market was principally men between the
ages of 16 and 29 with a fast-paced, exciting lifestyle. In
terms of promotion, Pepsi concentrated on the suggested
image for Pepsi Max that was discovered during the
market research: masculine and adventurous. Two commercials were made with rock climbers and skydivers to
promote the adventurous, risk-taking image. Other promotional support included outdoor advertising, product
sampling, point-of-sale displays, and consumer promotions. In 1994, $40 million was spent in promotional support. This represented one-third of Pepsi’s international
advertising budget. The “Live Life to the Max’’ theme
was maintained through 1995.
An exceptionally extravagant promotion involved
a competition for teenagers from all over Eastern and
Western Europe. Those that were successful in a vari-
Case 14. Pepsi One
ety of promotions — including finding lucky-number
ring-pulls and composing slogans — were flown to
Club Med in Ibiza for an all-expenses paid, week-long
holiday.
In Britain, promotion for Pepsi Max included commercials featuring teens accomplishing dangerous feats,
including skydiving from Big Ben, rollerblading off of
the Sphinx, and surfing down the dunes of the Sahara.
Pepsi engaged a London club called the Ministry of
Sound to promote Pepsi Max at dance parties all around
the country. Since its launch in England, Pepsi has increased its market share by two percentage points.
Another unusual but highly successful campaign
took place in the United Kingdom. In order to gain the
interest of the “generation X’’ crowd, Pepsi mounted an
aggressive “in your face’’ type of tasting campaign. Actors that emulated the risk-taking characters from the
Pepsi Max commercials were hired to take Pepsi Max on
a road show. This was an attempt to prove that Pepsi
Max with its “Live Life to the Max’’ slogan was not simply an image-based product. In the process of product
sampling, they found that when people tried the product, repeat purchasing was quite strong.
In terms of packaging, it was decided that traditional blue should be kept but jazzed up a bit. Consumers associated red and white with Coke, red and
blue with cola in general, and found anything else confusing.
THE LAUNCH OF PEPSI ONE
It is a formidable challenge to introduce a new soft
drink into the already saturated U.S. soft-drink market.
In 1994, according to the Market Share Reporter, cola
was the most popular flavor with 65.9 percent of sales,
followed by lemon-lime with 12.3 percent, pepper with
7.6 percent, root beer with 2.7 percent and orange with
2.3 percent. All flavors are usually available in regular,
caffeine-free, diet, and diet caffeine-free versions. The
U.S. market includes nearly 450 different soft drinks.
Three major players occupy more than 90 percent
of market share and dominate the U.S. market. In 1998,
Coca-Cola Co. held 44.5 percent, Pepsi-Cola 31.4 percent, and Dr. Pepper/Seven-Up 14.4 percent of the market. In 1997, the retail sale of soft drinks totaled more
than $54 billion, and soft drinks accounted for more
than 27 percent of Americas’ beverage consumption.
Although the three companies dominate the market, production of soft drinks is managed at a local level.
Approximately 5,000 mostly independent bottlers bottle
and sell the different beverages under exclusive licensing agreements. The bottlers provide the capital needed,
and the big companies provide the concentrates and
beverage bases to produce the final product, which con-
•
14-3
sists mainly of carbonated water, sweeteners, and flavors.
Although nondiet soft drinks, which account for 75 percent of the total market, are currently sweetened with
high-fructose corn syrup, sugar, or a combination of
both, diet soft drinks are mostly sweetened with aspartame. This intensive sweetener provides less than one
calorie in a 12-ounce can.
Although beverages with cola flavor still account for
more than half of all carbonated soft drinks sold, its
share is on the decline. The share of colas within total
consumption of carbonated soft drinks has slightly but
steadily declined from 63.5 percent in 1986 to 57.1 percent in 1997. The share of diet cola drinks within carbonated soft drinks increased continuously from 1977 to
1990 from 9.0 percent to 20.9 percent, but has been on
the decline since then. In 1997, diet cola drinks accounted for only 18.0 percent of the market. After having expanded its share compared to regular colas, diet
cola drinks have stagnated at around one-third of the
total share of cola drinks (Appendix 4).
Today’s consumers demand a much better-tasting
product in the low-calorie sector, which has led to the introduction of drinks based on multisweetener concepts
and sugar-reduced mainstream products. As Pepsi-Cola
North America is trying to reposition itself more as a
marketing services firm and less as a manufacturing company, the company has transformed its American operations into five sales and development markets. One of
the newly created groups, the innovation and technology
department, is responsible for maintaining an innovation
pipeline that is filled with new products, packaging, and
equipment.
The first challenge for this department — induced by
the market research department that identified a market
niche — was to develop the only soft drink left to brew: a
diet cola that does not taste like one.
The idea of Pepsi One was born almost ten years
earlier, but the US government only approved the sweetener ace K in 1998. The quick move to introduce Pepsi
One after FDA approval reflects a lesson Pepsi had
learned in 1983 when the sweetener aspartame was approved. Coca-Cola reached a deal with NutraSweet to
use the new sweetener in Diet Coke, which kept Pepsi
out of the market for months and left the market to
Coca-Cola. In consumer marketing, and especially in the
highly competitive, oligopolistic market of carbonated
soft drinks, being first really matters, and is a determinant of market share and the success of new products.
The concept for the new product was to develop a
low-calorie drink that tastes like a sugared soft drink
while avoiding the bitter aftertaste of diet drinks and the
word diet. Pepsi One, as officials stress, is not a replacement for Diet Pepsi. The fundamental difference
between the two drinks is the taste. “Diet Pepsi is light,
crisp, and refreshing . . . Pepsi One has a taste that’s
14-4
•
Case 14. Pepsi One
closer to regular brand Pepsi for people who are entering the category.’’
Market research and tests had been analyzed to determine the best positioning for Pepsi One. The new
drink’s target group is young men in their 20s and 30s
who are scared away from diet drinks by the word diet
and by the bitter aftertaste. The product also targets consumers who switched to bottled waters instead of diet
drinks. Pepsi believes that the new product will reach a
whole new audience. Initial cannibalization of Diet Pepsi
is not considered to be severe, because “Diet Pepsi consumers love the taste of Diet Pepsi . . . and Pepsi One
has a unique taste all to itself.’’
The new product was supported by a new and
unique marketing strategy to capture the American market. At this point the chairman of PepsiCo Inc. stated,
“This is a real-time business, and we’re going to be a
real-time company.’’ Pepsi’s launching strategy for Pepsi
One, which started in October 1998, was to quickly attract consumers and make them try the new drink over
and over again. Pepsi went for a national launch using all
available channels, packages, and geographies. The only
place where Pepsi One was not available initially was in
fountains. But in March of 1999, five months after the
launch, Pepsi One was also distributed through fountains. Industry analysts estimate that Pepsi will spend
$100 million in the first year to promote the product, to
boost sales in the low-calorie market and to gain market
share. Pepsi predicts that Pepsi One will attain sales of
$1 billion in its first year.
In the initial phase of the launch, Pepsi shipped
millions of free six packs to the doorsteps of cola
drinkers. Pizza Hut distributed free cans with every
pizza delivery. 7-Eleven gave away free samples to
buyers of sandwiches, and even greeters at 2,500 WalMart stores were equipped with free samples. Since the
drink targets young men, Pepsi created Pepsi One
lounges in approximately 100 shopping malls. While
waiting for their wives or girl friends, men can watch
sports and enjoy Pepsi One. Free samples were distributed at all targeted malls, and the turnaround to buy
the drink was 60 percent the next day. The initial
launch was very successful.
To support the national rollout of Pepsi One, Pepsi
signed Academy Award winner Cuba Gooding, Jr. as
spokesman. Cuba Gooding, Jr. starred in Pepsi One commercials featuring the slogan: “Only ONE has it all.’’ The
actor, who can be seen in adventurous and humorous settings, was signed to reinforce the message that Pepsi One is
for everybody, not just dieters. The first spot, “Parachute,’’
finds Gooding in an airplane with a group of skydivers and
communicates the message that “You haven’t tasted life
until you’ve tasted the massive cola taste of Pepsi One!’’
The second spot, “Wired,’’ plays in the boardroom of an
Internet company where a young millionaire can’t help but
Supermarkets
51%
Drug & mass
merch. 6%
Fountain
21%
Convenience
stores 10%
Vending
12%
feel that something “big’’ is missing from his life, which, of
course, turns out to be Pepsi One. The spots dominated
airwaves during the World Series, the season premiere for
the “X-Files’’ television show, the Oscars, and the Super
Bowl. For commercials during the NCAA tournament
(“March Madness’’) the spots were shot on college campuses to position Pepsi One as a drink for everybody and
especially for men in their 20s and 30s.
Marketing Pepsi One in addition to Diet Pepsi is not
an easy task. Pepsi One is the first low-calorie drink that
does not contain the word diet, and the word Pepsi seems
to be secondary on the packaging. This is purposely done
to avoid confusion with Diet Pepsi and to avoid the word
diet. In consumer tests, Pepsi One reached very high
scores. Nearly 70 percent of consumers who tried Pepsi
One in an extensive home-use test stated that they would
most likely purchase the product again.
According to Pepsi-Cola North America, Pepsi One
will be treated as a core brand. This means that it will
available everywhere Pepsi, Diet Pepsi, and Mountain
Dew are available. The graph shows where Pepsi core
brands are sold. Supermarkets account for more than
half of Pepsi’s soft-drink sales, with fountains following
with 21 percent.
DISCUSSION QUESTIONS
1. Address the following issues regarding market positioning and segmentation.
• What market positioning and segmentation strategy has PepsiCo chosen in this case?
• How does this approach influence the marketing
mix decisions for Pepsi One/Pepsi Max?
• To what degree is the soft-drink industry able to
standardize products and marketing-mix elements
on a global basis?
2. “Pepsi core displays will include Pepsi, Mountain
Dew, Diet Pepsi, and Pepsi One,’’ says Philip
Marineau, CEO Pepsi North America. Pepsi One will
Case 14. Pepsi One
be treated as a Pepsi core brand and it will be sold
everywhere the other core brands are available.’’ Will
Pepsi One take away market share from Diet Pepsi,
or will it generate more revenues and increase the
market share for PepsiCo? Given the limited amount
of fountains, shelf space and vending machines, how
can Pepsi effectively manage two products in the diet
soft-drink market?
1972
1974
1977
1978
1981
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1997
1998
14-5
3. “We’d be thrilled if consumers just call it ‘One,’’’ says
Steve Fund, director of marketing for Pepsi-Cola.
What are the possible reasons why Pepsi wants to
deemphasize the corporate brand name “Pepsi’’ for
this new product? How can Pepsi One still enhance
the corporate brand image of Pepsi?
APPENDIX 1
PEPSICO ACQUISITIONS, DIVESTITURES, AND INTERNATIONAL EXPANSION
1898
1964
1965
1967
1970
•
Pepsi-Cola is formulated by Caleb Bernham
Pepsi-Cola purchases Mountain Dew soft drink brand
PepsiCo is founded by merger of Pepsi-Cola and Frito-Lay
North American Van Lines (transportation company) purchased
PepsiCo world headquarters moved to Purchase, New York Wilson Sporting
Goods is purchased
Pepsi-Cola is sold in the USSR in exchange for Stolichnaya vodka
Pepsi-Cola starts production in USSR
PepsiCo acquires Pizza Hut restaurants (founded 1958)
Taco Bell restaurants acquired (founded mid 1960s)
PepsiCo reaches agreement for production in China
PepsiCo founds PepsiCo Food Systems (restaurant supplies)
North American Van Lines is divested
Wilson Sporting Goods is divested
PepsiCo acquires Kentucky Fried Chicken restaurants (founded 1952)
PepsiCo acquires Mug Root Beer brand
PepsiCo headquarters relocated to Somers, New York
PepsiCo establishes joint venture agreement in India
Hostess Frito-Lay partnership formed in Canadian snack food market
PepsiCo acquires Walker Crisps and Smith Crisps in UK snack food market
PepsiCo acquires Smartfood ready-to-eat popcorn
PepsiCo acquires controlling interest in Mexican cookie company, Gamesa
PepsiCo acquires equity in leading Polish confectioner, Wedel SA
PepsiCo purchases Carts of Colorado mobile merchandising equipment
PepsiCo purchases equity in California Pizza Kitchen restaurants
PepsiCo and General Mills merge European snack food operations
PepsiCo acquires East Side Mario’s Italian Restaurants
PepsiCo acquires D’Angelo Sandwich Shops
PepsiCo becomes first soft drink producer in Vietnam
PepsiCo acquires bottler in India
Carts of Colorado is divested
Pizza Hut, Taco Bell, and Kentucky Fried Chicken restaurants divested into
Tricon
Global Restaurants with PepsiCo shareholders receiving shares in the new
company; Other restaurant brands sold individually (California Pizza Kitchen,
East Side Mario’s, and D’AngeloSandwich Shops)
PepsiCo Food Systems is sold to AmeriServe
PepsiCo purchases Cracker Jack snack food from Borden Foods Corp.
PepsiCo acquires Tropicana Juices from Seagram Company
PepsiCo acquires Smith’s Snackfood Company in Australia Wedel S.A. chocolate
is divested
14-6
•
Case 14. Pepsi One
APPENDIX 2
BRAND AND IMAGE DEVELOPMENT
Over the past 100 years Pepsi has developed into one of the world’s most recognizable
brands. This brand growth has taken place in all of the core soft drink and snack food
brands. The marketing slogans used by Pepsi have evolved in line with the product image.
IMAGES AND SLOGANS FOR PEPSI COLA:
1929
1940
1963
1967
1968
1973
1976
1979
1980
1984
1990
1991
1992
1993
1994
1995
1996
1998
1999
Pepsi Bottle Cap
Pepsi Coaster
Pepsi Generation advertising begins with slogan: “Taste that beats the others cold.
Pepsi pours it on!’’
New theme and slogan: “Come Alive! You’re in the Pepsi Generation’’
New package using bold red, white, and blue logo.
New theme and slogan: “You’ve got a lot to live, Pepsi’s got a lot to give.’’
New theme focused on individualism with slogan: “Join the Pepsi people, feelin’
free.’’
Start of The Pepsi Challenge taste test campaign, New slogan: “Have a Pepsi day!’’
New campaign and slogan: “Catch that Pepsi Spirit!’’
New campaign and slogan: “Pepsi’s got your taste for life!’’
New campaign with spokesman Michael Jackson Advertising focuses on music
marketing and slogan: “The C Generation’’
New campaign with Ray Charles and new slogan: “The Righ
Eighth Pepsi logo introduced since 1898 Ray Charles campaign extended:
“You Got The Right One Baby, Uh-Huh’’
New “Gotta Have It’’ campaign and membership card
Pepsi Max introduced in European markets
New slogan, “Be Young — Have Fun — Drink Pepsi’’
New slogan, “Nothing else is a Pepsi’’
New marketing campaign for “Pepsi Stuff’’ products
New 3-dimensional logo, “The Globe’’
New blue ice logo backdrop
Introduction of Pepsi One in United States
New Slogan: “The Joy of Cola’’
Case 14. Pepsi One
•
14-7
APPENDIX 3
ALL CHANNEL CARBONATED SOFT DRINK COMPANIES/BRANDS
Companies
1 Coca-Cola Co.
2 Pepsi-Cola Co.
3 Dr. Pepper/
Seven Up
4 Cott Corp.
5 National Beverage
6 Royal Crown
7 Monarch Co.
8 Big Red
9 Seagram’s
10 Private label/other
Industry totals
Brands
1
2
3
4
5
6
7
8
9
10
Coke Classic
Pepsi-Cola
Diet Coke
Mountain Dew
Sprite
Dr. Pepper
Diet Pepsi
7Up
CF Diet Coke
Minute Maid
1998
Share
1997
Share
Share
Change
98 Cases
(millions)
97 Cases
(millions)
Volume %
Change
1997
Rank
44.5
31.4
14.4
43.9
30.9
14.5
0.6
0.5
0.1
4399.5
3100.2
1423.9
4208.6
2965.7
1392.5
4.5
4.5
2.3
1
2
3
2.7
2.0
1.3
0.5
0.3
0.3
2.6
100.0
3.2
2.0
1.5
0.5
0.3
0.3
2.8
100.0
0.5
Flat
0.2
Flat
Flat
Flat
0.2
270.0
194.0
126.1
46.0
33.7
28.0
258.6
9880.0
305.0
188.0
148.4
51.9
30.4
26.5
273.0
9590.0
11.5
3.2
15.0
11.4
10.9
5.7
5.3
3.0
4
5
6
7
8
N/A
10
1998
Share
1997
Share
Share
Change
98 Cases
(millions)
97 Cases
(millions)
Volume
% Change
1997
Rank
20.6
14.2
8.6
6.7
6.6
6.1
5.4
2.1
1.8
1.2
20.6
14.5
8.5
6.3
6.2
5.9
5.5
2.3
1.8
1.0
Flat
0.3
0.1
0.4
0.4
0.2
0.1
0.2
Flat
0.2
2037.5
1399.8
851.8
665.1
651.8
599.4
529.7
210.9
179.7
121.5
1978.2
1391.5
819.0
605.2
598.0
566.8
524.5
216.7
172.8
93.6
3.0
0.6
4.0
9.9
9.0
5.8
1.0
2.7
4.0
29.8
1
2
3
4
5
6
7
8
9
N/A
APPENDIX 4
COLA SHARES OF THE MARKET FOR CARBONATED
SOFT DRINKS IN THE UNITED STATES
Year
Total
/
Regular
/
Diet
/
1977
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
61.0
63.5
63.3
63.0
61.3
61.8
60.4
59.0
58.6
58.3
58.1
58.2
57.1
2.5
0.2
0.3
1.7
0.5
1.4
1.4
0.4
0.3
0.2
0.1
1.1
51.7
46.2
45.2
43.9
41.0
40.5
39.5
38.9
39.0
39.2
39.1
39.5
39.1
5.7
1.0
1.3
2.9
0.5
1.0
0.6
0.1
0.2
0.1
0.4
0.4
9.3
17.3
18.1
19.1
20.3
21.3
20.9
20.1
19.6
19.1
19.0
18.7
18.0
8.0
0.8
1.0
1.2
1.0
0.4
0.8
0.5
0.5
0.1
0.3
0.7
14-8
•
Case 14. Pepsi One
APPENDIX 5
SOFT DRINK AD SPENDING RISES SLIGHTLY IN 1997:
U.S. TRACKED MEDIA SPENDING ($ MILLION)
Coca-Cola Co
Pepsi-Cola
Dr. Pepper/Seven-Up
– Dr. Pepper
– 7Up
– Cadbury Bev
Triarc
Total
1997
1996
1995
1994
277.1
197.8
129.4
79.9
38.7
10.8
26.4
630.7
327.6
169.3
128.7
67.0
33.2
28.5
4.5
630.1
215.0
177.5
108.2
62.1
23.1
23.0
6.4
507.1
237.2
148.3
N/A
59.8
27.0
19.6
8.5
500.4
APPENDIX 6
15 U.S. MARKETS: COCA-COLA VERSUS PEPSI
Market
Atlanta
Boston
Chicago
Dallas/Ft. Worth
Denver
Detroit
Los Angeles
Miami/Ft. Lauderdale
Minneapolis/St. Paul
New York
Philadelphia
Phoenix/Tucson
Providence
San Francisco/Oakland
Seattle/Tacoma
Company
Cola
Diet Cola
Coke
Coke
Coke
Coke
Pepsi
Pepsi
Coke
Coke
Coke
Coke
Pepsi
Pepsi
Coke
Coke
Coke
Coke
Coke
Pepsi
Coke
Pepsi
Pepsi
Coke
Coke
Coke
Pepsi
Pepsi
Pepsi
Coke
Coke
Coke
Diet Coke
Diet Coke
Diet Coke
Diet Coke
Diet Pepsi
Diet Pepsi
Diet Coke
Diet Coke
Diet Coke
Diet Coke
Diet Pepsi
Diet Coke
Diet Coke
Diet Coke
Diet Coke
Case 14. Pepsi One
APPENDIX 7
TOP DIET SOFT DRINKS
Rank
1
2
3
4
5
6
7
8
9
10
Top 10
Brand
Diet Coke
Diet Pepsi
Caffeine Free Diet Coke
Caffeine Free Diet Pepsi
Diet Dr. Pepper
Diet Mountain Dew
Diet 7Up
Diet Sprite
Diet Rite
Fresca
Share of
Diet Drinks
Share of All
Soft Drinks
33.2%
19.9%
6.9%
4.0%
3.5%
2.9%
2.3%
1.9%
1.2%
1.1%
77.2%
8.5%
5.1%
1.8%
1.0%
0.9%
0.8%
0.6%
0.5%
0.3%
0.3%
19.9%
APPENDIX 8
1997 8-OZ. SERVINGS PER CAPITA
Carbonated Soft Drinks
(% of total consumption)
Coffee
Milk
Beer
Tea
Juices
Canada
USA
Europe
471
(15.3%)
861
(29.5%)
191
(6.2%)
402
380
274
246
240
315
301
357
112
139
248
271
221
252
115
Canada
USA
Europe
471
(15.3%)
861
(29.5%)
191
(6.2%)
90
72
27
17
16
848
3083
184
78
30
26
21
496
2920
191
N/A
89
12
24
1470
3084
APPENDIX 8 (continued)
Carbonated Soft Drinks
(% of total consumption)
Bottled water
Powdered drinks
Wine
Sports drinks
Spirits
All other/tap water
Total
•
14-9
14-10
•
Case 14. Pepsi One
APPENDIX 9
WORLD CONSUMPTION OF SOFT DRINKS BY REGION
(1992 – 1996, IN MILLIONS OF LITERS)
Africa / Middle East
Australasia
Eastern Europe
Japan
North America
South America
South Asia
South East Asia
Western Europe
World Total
1992
1996
4,546.6
2,284.3
5,650.7
8,488.1
74,181.8
16,630.9
872.1
7,621.0
44,501.2
6,246.0
2,801.8
11,794.2
10,456.0
84,896.0
24,514.0
1,181.9
11,930.0
53,128.4
164,776.7
206,948.2
APPENDIX 10
WESTERN EUROPE LOW CALORIE
CARBONATED CONSUMPTION
Year
Consumption (in thousands of liters)
1990
1991
1992
1993
1994
1995
1996
1997
2,345
2,670
2,935
2,959
3,142
3,254
3,256
3,435
% of Total in 1996
3.0
1.4
5.7
5.1
41.0
11.9
0.6
5.8
25.7
100