Editorial: A Team Sport
One of the expected competitions never really surfaced, however. For the first time in nearly a decade, both Coca-Cola and PepsiCo were running cola ads during the game, and some had predicted a soft drink advertising showdown that would bring back the cola wars of decades past.
The Coca-Cola Co. and PepsiCo did put significant effort into advertising during the game. Coca-Cola ran ads focusing on its “The Coke Side of Life” campaign, and Pepsi went back to its tradition of using high-profile celebrities, this time featuring pop star Justin Timberlake. But more striking to me was the emphasis on non-carbonated brands during the game. PepsiCo promoted its launch of Gatorade line extension G2 with ads starring New York Yankee Derek Jeter. The company also used the game to relaunch its SoBe Lifewater, even sponsoring the half-time analysis during the game. And Coca-Cola advertised its newly acquired Vitaminwater brand. Like it has in the beverage industry overall, the cola battle became merely part of the total lineup.
As this month’s cover story examines, carbonated soft drink sales are in something of a tenuous state, having slipped two years in a row. When we began discussing the report, it seemed as if 2008 might be a make-or-break year for the category.
The analysis from industry experts brought up some interesting points, however. Several commented that consumers are still buying soft drinks, but they are scaling back some of their CSD purchases and combining them with a much wider range of other products such as non-carbonated offerings, flavored waters and plain bottled water.
Soft drink companies, too, are considering the entire lineup, both their growth brands (i.e. non-carbonates and flavored waters) and their volume brands (soft drinks). Whereas once they might merely have sought representation in non-CSD categories, today they are fine-tuning every category. Case in point: The Coca-Cola Co.’s recent investment in Honest Tea. Just days before the deal was announced, Coca-Cola Chief Executive Officer Neville Isdell was quoted during the World Economic Forum saying, “Tea is one area where we’ve seen our performance has not been as good as we would like it to be.” Although tea is a much smaller category than CSDs, the company seems determined to optimize that category as well.
I still believe the next year or so will be essential to the carbonated soft drink category. CSDs are the largest segment of the industry and their survival is essential to all who operate within it. But the future of the industry looks more like a team sport than a showdown between two star players.