The PepsiCo portfolio has evolved to include some of the most recognized, even beloved, food and beverage brands in the world. From the cola brand in its name to Lay’s, Cheetos and even Quaker, these brands have not only quenched our thirst and satiated our appetites; they have helped define our culture.
The innate connections we have with food and beverage brands, especially those we have grown up with, create a built-in opportunity for companies like PepsiCo to drive customer retention and loyalty. But what happens when these brands are no longer as present in consumers’ daily lives as they once were — or worse, no longer align with their goals, needs and expectations?
That is why PepsiCo has had to grow beyond the deep roots of these brands — and even the strong recognition of their names, logos and products — and use data intelligently to inspire marketing and product innovation. These efforts have been spearheaded by the PepsiCo C-suite, including Chad Matthews, Chief Commercial Officer, and Cara Keating, Chief Customer Officer. In an interview with Retail TouchPoints, they offered insights into how the company is:
- Leveraging pepviz, a data practice powered by PepsiCo, to study, analyze and apply new consumer behaviors;
- Harnessing the power of pop culture to fuel marketing campaigns, partnerships and experiences;
- Investing in pep+, or PepsiCo Positive, to reimagine its culture and processes to be more sustainable; and
- Creating new product lines and brands to adapt to consumer lifestyle shifts.
Retail TouchPoints (RTP) How have consumer behaviors shifted for brands within the CPG category specifically?
Chad Matthews: Shoppers are on the go more than ever. They have more choices to make and little time to make them. Additionally, most shoppers fall into five paths of purchase: early adopter, ease, bargain, caretaker and explorer. It is important to understand how to engage with shoppers along each of these paths to optimize the marketing touch points along their journey, both within the retail ecosystem and outside of the store.
We’ve evolved our approach to ensure we’re delivering a more personal and valuable experience every single time a customer interacts with our brand. We think about this as a journey that accounts for those paths of purchase, as well as the following stages: identify, engage, convert and optimize.
RTP: How has PepsiCo adapted its approach to marketing and engagement as a result of these evolving behaviors?
Matthews: With so many possible touch points throughout that path to purchase, it can be challenging for brands and retailers to pinpoint specific behavioral shifts over time, which is why a 360-degree understanding of your shoppers is so important. At PepsiCo, we turn to our industry-leading data capabilities to uncover the most impactful moments online, in stores and everywhere in between to influence and increase product discovery and purchase.
We are also constantly innovating our products to appeal to these various shopper paths and working with our retail partners to be sure they are offered in the most impactful formats.
RTP: Can you expand upon your data capabilities and how you’re prioritizing first-party data collection specifically?
Cara Keating: For any brand to be relevant in today’s environment, we must stand out to our consumers by delivering meaningful, relevant experiences every single time a person interacts with us.
PepsiCo is on a marketing transformation journey, shifting from a product-centric to a human-centric mindset to create more personalized experiences for our consumers. This is all made possible via opted-in consumer data that enables rich, human-based insights.
PEP’s U.S. portfolio loyalty program, PepsiCo Tasty Rewards, is a great vehicle that provides the right value exchange for members to engage, and whereby we are able to learn more about what a consumer is most interested in hearing back from us about. This is one example of how we can collect data to fuel the personalization flywheel, enabling engaging and predictable human experiences that serve to deliver a step change in consumer lifetime value.
And early results from the program show that it works: PepsiCo Tasty Rewards members spend on average 60% more per year across the PepsiCo portfolio than average U.S. consumers.
RTP: And then how do you incorporate data from your retail partners to glean even more insight into your customers?
Matthews: One of the approaches we have at our disposal is pepviz, our proprietary data practice. By looking at the shopper holistically, pepviz has revealed that an understanding about what shoppers do across their entire journey is crucial for retailers to succeed. Together with our partners, we’re working to share data and innovate our offerings to best serve the shoppers and ultimately unlock growth.
RTP: What adjustments have you had to make to your marketing and advertising strategies in response to the data and insights you’ve collected?
Keating: As media consumption shifts to significantly more digital channels, so do our investments. And we are continually measuring our spend effectiveness to optimize future work. In addition, we anticipated the shift to ecommerce early on and invested in those capabilities. We now have two direct-to-consumer (DTC) sites, PantryShop.com and Snacks.com, that offer shoppers additional channels to meet their needs. DTC is one more way we can serve our consumers online, in addition to our key retailers.
Before COVID-19, CPG companies had a low penetration rate online. But at the start of the pandemic, we started to collaborate more frequently and more closely with our online partners to ensure customers get what they need — and that partnership has continued. In-store promotional strategies also are still important to keep in mind. After all, half of all shoppers recall seeing at least one pre-shop and/or in-store marketing tactic related specifically to their purchase. These tactics can also help drive impulse purchases.
RTP: How are you tapping into what’s culturally relevant and meaningful to make brand campaigns and experiences more impactful?
Matthews: We are consistently showing up at the intersection of pop culture and food and beverage through innovative brand programs, campaigns and experiences. Partnerships generate brand excitement. An example to highlight is how three of our fan-favorite brands — Doritos, MTN DEW and Rockstar Energy — came together to announce their biggest gaming partnership yet with Xbox. For a limited time, fans could snag specially marked products featuring codes to unlock a free one-month subscription to Xbox Fame Pass Ultimate, and points for gaming rewards and in-game content from big games like Forza Motorsport, Madden 24 and Sea of Thieves.
With Pepsi, our flagship brand and one of the most iconic brands in the world, we recently celebrated a historic milestone: the brand’s 125th anniversary. To honor the legacy of Pepsi and to welcome the next era, we recently launched our new Pepsi logo. The new design showcases a bold typeface, signature pulse and an updated color palette, honoring the brand’s legacy, both past and present, while looking ahead to the next 125 years as the brand enters a new era.
We also opened the doors to a Pepsi Diner in New York City to commemorate this anniversary. The pop-up restaurant was created to celebrate the momentum, the brand’s history and its new logo, while offering food that features Pepsi as an ingredient. For example, consumers could taste a three-course menu with foods like Pepsi-flavored bacon and “Colachup,” a Pepsi-infused ketchup.
RTP: Have you had to adapt your product offerings because of new consumer habits and expectations as well?
Keating: Our consumers are gravitating toward healthier products and we’re evolving our portfolio to offer options that are better for people — and better for the planet. We also understand that today’s consumers, especially Gen Z, care about more than just premium products; they want to support brands that share their values. That is why we’re doubling down on pep+, or PepsiCo Positive, which is our roadmap to build a more sustainable future for the planet, people and our business. As part of this initiative, we’re establishing and working against sustainability-focused goals across agriculture, value chain/people and product portfolio.
Finally, we recently launched Pepsi Zero Sugar and STARRY Zero Sugar, and we have plans to roll out additional zero-sugar options in 2024. We also have other brands like Simply, Bare and SunChips that offer products with less sodium, real fruit and a great taste.
RTP: What new brands and products are going to be driving your marketing priorities in 2024?
Keating: In 2024, Gatorade Water will remain a big bet for us. For the first time ever, Gatorade is producing unflavored, electrolyte-infused water to create a refreshing and crisp taste, developed to help support all-day hydration for active people. We also know that Gen Z loves bold flavors, textures and heat, so we’re excited to launch products like Doritos Dinamita Sticks Smoky Chile Queso, which offer a multidimensional flavor and satisfying crunch, as well as Jack Link’s® Fritos® Chili Cheese Beef Jerky, in partnership with Jack Link’s, which fuel that love for intense flavors and will help us attract new meat snack buyers to the category.