In one of the few business deals that could make The Coca-Cola Co. fear for their market share, PepsiCo and Anheuser-Busch have agreed to jointly purchase certain goods and services in the U.S. and set off rumors of further deals – even a potential merger.
For the moment, though, the agreement is pretty innocuous.
The two firms will share the tab on some “indirect goods and services” purchased and used primarily in the U.S. The list includes information technology hardware, office supplies, travel facilities and services, transportation and other maintenance, repair and operating supplies.
Harry Schumacher, editor of Beer Business Daily, called the agreement “like getting the benefits of a merger without the merger.”
“It will be interesting to see how these two companies… will work together,” he told Reuters, “and whether this is the first baby step toward an eventual full-on merger.”
Coke rolls out plans to help with obesity
As policy makers and the public pay an increasing amount of attention to America’s obesity crisis and the beverage industry’s role in it, The Coca-Cola Co. announced a pair of initiatives designed to help consumers control their calorie intake.
The beverage giant announced a global commitment is to list calorie information on the front of all packages by the end of 2011, and also rolled out a 90-calorie can. The contents of the new can are identical to that in a 12 oz. can of coke, there’s just less of it – 7.5 ounces, to be exact.
Its announcement has induced eye-rolls among industry observers. The UK’s Guardian newspaper asked if smaller Coke cans will lead to smaller Coke drinkers. The Washington Post framed the new can in terms of New Coke, and Slate.com noted that Coke’s pitch for the new can resembles the promotion used for light cigarettes.
PepsiCo to tinker with beverage brands
PepsiCo executives recently told bottlers its plans to tinker with its beverage brands.
Beverage Digest, reporting from the Pepsi Bottler Meeting Sept. 21-23 in Los Angeles, described new plans for SoBe, Gatorade, Amp, canned coffee, and Sierra Mist.
The beverage giant said it may relaunch Sierra Mist as a “health and wellness platform, possibly with new sweeteners,” BD reported. The change would follow the lemon-lime soda brand’s most recent repackaging, announced just last October.
PepsiCo has recently struggled with rebranding. It watched Gatorade sales continue to slip after a much-touted packaging revamp that moved the brand’s emphasis from its lightning bolt emblem to a giant G, and pulled a new package for Tropicana Pure Premium Orange Juice after consumers objected.
The company had more success with a repackaging of SoBe Lifewater, which put the brand in a twisted bottle. That package debuted at the same time as its first three zero-calorie varieties sweetened with Purevia, a natural sweetener derived from the stevia plant. BD reported that PepsiCo will add more zero-calorie varieties to the Lifewater line, and will also transition core SoBe from its iconic glass bottles to PET.
In other non-carbonated beverages, Gatorade G2 will see a reduction from its already-low 25 calories per serving. The company is also exploring zero-calorie variants of Propel, and is planning RTD coffee “value offerings” through Starbucks’ Seattle’s Best brand.
On the energy front, PepsiCo is considering an AMP juice line in PET, BD reported, and will add new sugar-free AMP flavors. The company is also planning a new energy shot to replace its recently-scrapped AMP Energy Shot.
On core Pepsi, the company will place greater emphasis on its “performance with a purpose” theme, BD reported, and the company promised institutional support for its bottlers’ decisions.
Hugh Johnson, president of Pepsi-Cola North America Beverages, told bottlers that “When you invest, the franchise company will have your back,” BD reported. That could be good news for coconut water marketer O.N.E. World Enterprises, which recently announced an investment from the Pepsi Bottling Group.