Pepsi Overhaul: Cutting Jobs & Changing Logos

Excerpted from AdAge “PepsiCo Launches Massive Overhaul” by Natalie Zmuda, October 14, 2008

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PepsiCo said it will pour some $1.2 billion over three years into a push that will include sweeping changes to its brands, including …  a revamp of “every aspect of the brand proposition for our key [carbonated soft drink] brands. How they look, how they’re packaged, how they will be merchandised on the shelves, and how they connect with consumers.”

Included is the redesign of many of the brands’ packaging graphics, as well as a redesign of the Pepsi globe logo. The white band in the middle of the logo will now loosely form a series of smiles. A “smile” will characterize brand Pepsi, while a “grin” is used for Diet Pepsi and a “laugh” is used for Pepsi Max. Also, Mountain Dew will be rebranded as Mtn Dew…

Time for strong action
It is our belief that, especially, in this economic downturn, we should be investing in the category to get consumers to stay with and some to return to the packaged liquid refreshment beverage category and to our brands, in particular.”

PepsiCo said the $1.2 billion will come from its “Productivity for Growth” program, which involves the elimination of 3,300 positions, as well as the closing of six plants… “The majority of the savings will be invested in our businesses. A primary focus will be restoring growth to our North American beverage business. At the same time, we will increase our investment in developing markets, make selective investments to continue growing our global snacks business and accelerate our global R&D initiatives to help secure our future innovation pipeline.”

During the third quarter, PepsiCo Americas Beverages reported a 2.5% volume decline, with a 4% decline in North America, specifically. North American carbonated soft-drink volume dropped 3%, while non-carbonated beverages declined 5%. Unflavored water and Propel saw double-digit declines during the quarter…

Gatorade in for a facelift
.”We’re initiating similar upgrades for the entire Gatorade line, which will have an entirely new contemporary identity, and there will be exciting innovations for both G2 and Tiger and a renewed Propel platform.” 

Beverages are more affected than snacks in this economy, because there is a free substitute: tap water. The last 12 to 18 months mark the first time the category is seeing a decline. “We’re saying goal one is to stem that decline . … It’s a critical source of profitability,”

 “Once we have a breakthrough on a natural low-calorie sweetener that can be used in colas, we have a reason to talk about this category growing again.” 

Edit by SAC
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Full article:
http://adage.com/article?article_id=131733

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2 Responses to “Pepsi Overhaul: Cutting Jobs & Changing Logos”

  1. barbara Says:

    isn’t water something that actually benefits a consumer/human’s need for life? seems like all sodas actually are destructive to health, weight gain and add nothing to making a person healthy. think about serving humanity with healthy beverages rather than anything sweet to make a buck.

  2. Felicia Curtis Says:

    I think it’s great the changes that are being made on all the brands that fall under the Pepsico Umbrella. I believe it will definitely help to restore confidence and interests in our company as well as grow the company so future jobs can be gained here.

    Thanks,

    Felicia

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