BOCA RATON, FLA. — Beverage innovation at PepsiCo taps into consumer demand for healthier drinks. Products set to launch from the Purchase, N.Y.-based company feature nutrition claims, reduced sugar or ingredients perceived as natural.
“We have very high hopes for our product news from a profitability standpoint,” said Al Carey, chief executive officer of PepsiCo Americas Beverages, during a presentation at the Consumer Analyst Group of New York conference on Feb. 19.
New Mtn Dew Kickstart varieties, for example, contain coconut water and include 60% less sugar than original Mountain Dew.
From the Gatorade brand comes Propel Electrolyte Water, which offers the hydrating benefits of Gatorade without the calories.
“And Lipton Sparkling Tea, which has been a great start so far, (has) low calories as well,” Mr. Carey said. “So that’s a big part of our success on the beverage side.”
PepsiCo also is launching new Naked Juice smoothies made with almond milk in berry and peach flavors, and a new variety of Starbucks Doubleshot canned coffee beverage with 20 grams of protein. Under the Tropicana banner, the company is expanding the Farmstand fruit and vegetable juice line with a tropical green flavor, made with sweet potato, grape, apple, banana, mango, pineapple, orange, yellow carrot, lime, spinach, kale and kiwi juice.
And as consumers increasingly clamor for natural ingredients, PepsiCo is introducing soft drinks sweetened with sugar instead of high-fructose corn syrup, including Dew Shine, a clear citrus beverage, and Pepsi-Cola Limon, a cola flavored with Mexican lime juice.
The new products come at a time when the beverage industry faces mounting pressure from consumers and public officials regarding the calorie content and ingredients in soft drinks. New dietary guidelines recommendations released on Feb. 19 called for a sugar tax in North America to help curb obesity. PepsiCo said it has a plan in place to address the issue.
“On the sugar tax, we’re working together as an industry with the American Beverage Association, Coke, Dr Pepper, and us; and I think we’ve got a good plan moving forward to work against these things,” Mr. Carey said. “We have a program called Mixify that is in the marketplace now, which talks to teens and moms about the importance of balancing calories. We are working together on a number of projects; I feel like we are making some progress there, working together as one.”
Calories are not the only topic of concern among health-minded consumers, however. PepsiCo executives attribute sharp declines in diet soft drinks to controversy over the artificial sweetener aspartame.
“And the No. 1 thing we see from consumers is a complaint about aspartame,” Mr. Carey said. “Aspartame is just one sweetener, but it’s the one that seems to get most of the negatives in the press and on YouTube…
“So I’d say that that diet business stays down for a while. We have some ideas on how we might address it. But, yes, it’s a definite drag on the business.”
In the meantime, innovation elsewhere in PepsiCo’s portfolio may help keep the company’s beverage business afloat.
“At one point when I first came back to Pepsi about three years ago, I thought, ‘Boy, you just can’t sell enough of these other drinks like tea, coffee, sport drinks, and Naked Juice to make up for the decline in the carbonated soft drinks,’” Mr. Carey said. “The answer is, yes, you can, and we are seeing that now.
“So I would say that these other brands, and then Mountain Dew contributing, gives us a chance to grow the business.”
