Blue Pepsi?!?
Ugh! I'm glad I drink Diet Coke! <g>
Pepsi Blue to Hit Store Shelves in Summer
By Jessica Wohl
PURCHASE, N.Y. (Reuters) - Pepsi-Cola on Tuesday unveiled a bright blue cola, Pepsi Blue, as the soft drink giant adds to its carbonated lineup to perk up sluggish cola sales in the key U.S. market.
The berry-flavored cola targeted to teens follows a number of recent carbonated soft drink debuts from Pepsi-Cola. It will also follow the mid-May launch of Vanilla Coke from top competitor Coca-Cola Co. (NYSE:KO - news).
Pepsi-Cola North America, a soft drink arm of PepsiCo Inc. (NYSE:PEP - news), said Pepsi Blue is "a fusion of berry and cola" flavors and will hit store shelves by early August.
But some grass-roots promotion of Pepsi Blue will start next week, Dave Burwick, senior vice president of marketing for Pepsi's carbonated soft drink brands, told reporters gathered at the company's Purchase, New York headquarters.
"This is a critically important juncture for Pepsi and Coke as they both introduce major cola line extensions," said John Sicher, editor of industry newsletter Beverage Digest. "The issue is, will these moves return growth to their huge trademark cola businesses?"
The time seems right for such launches, analysts said.
According to a recent study from Morgan Stanley analyst Bill Pecoriello, 72 percent of the U.S. population "said they would be interested in trying Vanilla Coke or a new Pepsi flavored cola."
Consumers have flocked to Pepsi's Mountain Dew Code Red, which has a cherry-citrus taste and rolled out in May 2001. A diet version of Code Red is set to follow this summer.
Pepsi is not concerned that consumers are being overloaded with new options, since they appeal to different consumers.
"Code Red is about Mountain Dew, this is about Pepsi," Burwick said of Pepsi Blue.
BRIGHT BLUE HUE
Pepsi Blue will come to market almost two years after the October 2000 launch of Sierra Mist, Pepsi's lemon-lime soda that competes with Coke's Sprite and Cadbury Schweppes Plc's (London:CBRY.L - news) 7 UP.
Pepsi has also launched lemon-spiked colas Pepsi Twist and Diet Pepsi Twist nationally. Those drinks compete with Diet Coke with Lemon from Coca-Cola.
Pepsi Blue comes in a clear plastic bottle with a transparent label that lets the bright blue color of the beverage show through. The drink's color is reminiscent of Windex, the window cleaner from S.C. Johnson & Son.
Pepsi Blue will be available in 20-ounce and 1-liter bottles, and other sizes may follow, the company said.
Pepsi said it tested a variety of products before deciding on Pepsi Blue, which took nine months to create. The company said it might bring out other colored sodas in the future, though it declined to comment on them.
"We have very high hopes for this," said Gary Rodkin, the president and chief executive officer of Pepsi-Cola North America. "It's going to be a winner, but I wouldn't want to peg a number on it," he said when asked about volume expectations.
While Pepsi Blue is the first major carbonated soft drink with a blue hue, it is not the first blue beverage on the market. Pepsi's Gatorade comes in blue, among other colors.
With a slew of new drinks coming to market, the beverage makers are facing an ever more difficult battle for space in the crowded aisles and coolers of convenience store.
Rodkin, in an interview, said it's tough to get more space and that there's "a lot of blocking and tackling" involved to secure prominent positioning for new drinks.
He also said there was no decision yet on whether to use pop star Britney Spears, who promotes Pepsi-Cola, to sell Pepsi Blue.
In the battle between the top two soft drink companies, Coke said on Tuesday that it will buy the Seagram's Mixers business from British drinks group Diageo Plc (London:DGE.L - news) and French spirits company Pernod Ricard (Paris:PERP.PA - news). Coke's bottlers already distribute more than 75 percent of Seagram's U.S. mixers volume. Terms of the deal were not disclosed.
New twists on old drinks have been a great boost to Pepsi's sales. About 70 million cases of Mountain Dew Code Red were sold last year, even as sales of regular Mountain Dew declined, according to a Beverage Digest/Maxwell study.
Pepsi Twist and Diet Pepsi Twist have also been adding to Pepsi's volume.
But, it is still too early to tell if a diet version of Pepsi Blue will be on the way.
"Never say never," Rodkin said.
Shares of PepsiCo slipped 17 cents to $51.83 in trading on the New York Stock Exchange, while shares of Atlanta-based Coca-Cola climbed 6 cents to $56.65. Both are trading near recently tapped 52-week highs.
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