Pepsi to refocus on soft drink sales

New York: PepsiCo, the second-largest US beverage company, said on Friday it was launching a new marketing campaign to refocus attention on soft drinks, which have seen lagging sales.

Carbonated soft drinks (CSDs) are "an important part of the franchise," chief executive Indra Nooyi told the trade publication Beverage Digest. "So rejuvenating CSDs is important."

In recent years, as consumers grew more health conscious, demand shifted from soda to bottled water, energy drinks and juices. Bottled water sales also slowed recently as concern grew over how much waste was created in the bottling and shipping of water.

"This is a multi-year commitment. We realise we have to stick with it, and the identity change is just the first step," she said.

The company plans new logos for Pepsi, Mountain Dew and Sierra Mist in the first phase of a multi-year campaign.

Shift

The move to shift some marketing attention to soft drinks comes in a week when investor concern led to a massive global selloff in stocks after the credit crisis has crippled the economy. The announcement was made at a meeting with bottlers held from Monday to Wednesday.

Slowing sales of CSDs - which are generally cheaper than energy drinks and other soda alternatives - have been dragging down results even as PepsiCo's Frito-Lay and overseas sales grow. Nooyi said she was optimistic that soft drink sales would eventually return to growth of one per cent to two per cent.

"With the decline in water, I think there's a decent chance the right kind of activity can certainly get some interest back in carbonated soft drinks," Beverage Digest editor John Sicher said. "I think Pepsi is betting on that."