With the buzz around healthy sodas far from fizzling, Pepsi is doubling down on the emerging segment just months after acquiring one of its pioneers, Poppi, by launching a new innovation: Pepsi Prebiotic Cola.
The product is “one of the largest new innovations in the cola category,” Mark Kirkham, CMO of PepsiCo Beverages US, told Retail Brew. Containing 5 grams of cane sugar, 30 calories, and 3 grams of prebiotic fiber, the new soda is aimed at giving consumers more soda choices, he said, as Pepsi tries to meet demand for more healthy options. It’ll be sold first online in Original Cola and Cherry Vanilla flavors for Black Friday and Cyber Monday, followed by a retail debut in February, priced at a premium to traditional Pepsi, Kirkham said.
Poppi, whose acquisition was completed in May, also offers Classic Cola and Cherry Cola flavors with a nearly identical nutritional profile, but Kirkham sees the two as complementary, selling in two separate soda segments that reach different consumer sets.
Kirkham broke down the new product, and how it fits into its portfolio alongside Poppi and aligns with Pepsi’s larger beverage innovation strategy.
This interview has been lightly edited for length and clarity.
Why did Pepsi decide to develop this product?
One of the things we wanted to do is address two opportunities. One is the declining cola category. Particularly, we’ve seen occasions drop over time in the core, but especially in diet [soda], and also to look for new ways to deliver more, better-for-you functional ingredients into our core. And obviously this was early days in what has become the modern soda business, and we started working on this well over a year ago.
We found…we could get to an amazing-tasting product that is no artificial sweeteners, that’s 5 grams of cane sugar, that’s got the taste of Pepsi…But also it’s got prebiotic fiber…And it’s the kind of ingredient that we’ve seen bringing new consumers into the category. The reality is, no one has that in cola, and obviously super complimentary to Poppi, who do have two cola SKUs, but that’s only 8% of their mix. We feel this is a great opportunity to: one; bring innovation to the traditional cola category; two, compliment this amazing new family member in Poppi—they are the leader in developing the modern soda category; and then three, offer choice. Offering choice to our consumers is the ultimate goal of these innovations…It’s a win-win for the consumer, and it’s a win-win for us.
What are your thoughts about how similar those products are?
A lot of what makes Poppi so special is it’s been built from the ground up. It always was clean label, natural ingredients. One of the biggest drivers there was always the apple cider vinegar. When you taste their cola, particularly their cherry and their regular cola, it’s a very different flavor profile than, let’s say, traditional cola, like we offer with Pepsi. We felt there are a lot of cola lovers out there that have this certain expectation of a cola flavor, particularly of Pepsi, but they also want alternatives in terms of different sweetener systems, or added benefits, or having lower sugar. Being able to address that part of the market that may not be being addressed through the cola segment within modern soda—that’s where the real opportunity is for us.
The prebiotic soda space has been popping off for several years. What instigated the development of this product now?
We were just listening to the consumer, and we were seeing the emergence of different segments in the category.
This is about Pepsi, and Pepsi delivering a new product to address the consumers of cola, or, in the case of maybe some of the younger consumers who maybe didn’t grow up with cola like I did, right?…We’re bringing them in through the fact that this is only 5 grams of sugar, no artificial sweeteners, that it’s only 30 calories, and the prebiotic fiber gives it a new way to bring in a different audience and a new consumer.
We actually think it’s a great opportunity for, let’s say, Gen X female diet cola drinkers. There’s an opportunity to really source from a broader range of consumers. This is not just a pure Gen Z play, which is very much what’s built modern soda. This is a broader play for cola lovers.
How are you balancing innovating on the core versus bringing on acquisitions like Poppi?
The reality is you have to do both…I like to say “core and more.” The only way you’re really going to drive growth in some of our categories is to really ensure that your core is healthy and that you’re continuing to innovate your core, but at the same time, you cannot miss out on these new and emerging categories, like what we saw in modern soda and Poppi. It’s a balanced approach that you need to take with innovation, but you must make sure that you’re doing both core and more, because we built this amazing brand for over 125 years. We’’ve helped create amazing products through our Diets, through our Zeros, but this next generation of consumer and as the category evolves, there’s opportunities to offer new innovation within the core, and that’s what we’re doing.
This report was originally published by Retail Brew.
