beverage, corporate watch

PepsiCo’s strategy

1 Comment 13 July 2010

PepsiCo’s strategy

The first glass of carbonated water was discovered at the end of the 18th century. Who would have know that this gave the starting point of America’s love affair with soft drinks! Many pharmacists started having soda fountains in their shops, where they sold different types of self-made flavored sparkly beverages. People kept on coming back for more and quickly enough soda fountains became gathering places just like today’s coffee shops. Caleb Bradham, one clever pharmacist from North Carolina, created a unique bubbly drink: he added kola nuts, vanilla and rare oils to carbonated water. Never would have people imagined that this new concoction, known as Pepsi today, was the magic treasure to the creation of a world-empire cooperation. Today, PepsiCo is a giant cooperation that has acquired some of the world’s most famous snack and beverage brands sold in around 200 countries. PepsiCo has been at the centre of a lot of controversy especially with its bottled water brand “Aquafina”. With a lot of criticism from environmental groups and health advocators, the company is constantly working in order to update its image and marketing strategies. With more than 100 years of history and the arrival of the new millennium, Pepsi decided to adopt a “Globe oriented image” with a concrete and innovative marketing strategy that evolves around various sustainable development programs part of the Pepsi Refresh Project.

In addition to Pepsi’s corporate initiative, the firm has launched an innovative marketing strategy entitled “The Dream Machine”. “This machine is not a simple recycling bin but a dream machine”, says the company, because it do not only recycle but also try to improve the life of individuals  (Source: http://www.facebook.com/dreammachine). In partnership with Waste Management Inc.,this giant corporation has launched dream machine kiosks in various parts of America that work on a reward system that gives consumers the opportunity to collect points for their recycling activities.”The program also intends to provide funding to the Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), a national program offering free, experiential training in entrepreneurship and small business management to post-9/11 veterans with disabilities” (Source:http://pepsico.presslift.com/the-pepsico-dream-machine). The more American citizens recycle the more Pepsi will directly contributed to the Bootcamp for Veterans with Disabilities. Recycling takes a turn and becomes not only saving the plant but helping out people who need it. The intiative is also promoted on You Tube.

The long term sustainable Pepsi Refresh Project gives the possibility to all American citizens to propose a development idea online that can range into a different set of categories: health, arts and culture, food and shelter, the planet, neighborhoods and finally, education. Pepsi accepts the submission of a thousand ideas eve months and 32 potential Pepsi grants are awarded to the most voted ideas. The winner projects have the opportunity to receive a grant that ranges from $5k up to $250k. Various projects all across America have already been approved and funded like the “Enrich the lives of individuals with disabilities through the arts”, a project that was granted $50k or the “Save animals from euthanasia in Midland Michigan” project that was award $5k. Each winner project has a follow up on the Pepsi website with a section reserved to how the grant is being spent. It is a shame that this initiative is reserved only to American citizens because it is obvious that a lot of other country of the world would have a lot of valid and much-needed projects to propose.  The website has recently created a special section called “Do Good for the Gulf” (Source: http://gulf.refresheverything.com/) where people can send their ideas or contributed to raise money in order to help the clean-up procedures and the safeguarding of all the water animals. According to the firm, a small change like implementing the cultural habit of recycling all cans, could implement a considerable change on the national scale.

On the water front, PepsiCo has dedicated a special section to water recycling in its annual environmental report. The company has three main goals in terms of water conservation:” improve their water use efficiency by 20 percent per unit of production by 2015, strive for positive water balance in our operations in water-distressed areas and finally provide access to safe water to three million people in developing countries by 2015″ ( Source: http://pepsico.com/annual09/environmental_sustainability.html). This corporate sustainability strategy is a wise marketing strategy in order to increase the brand equity and could perhaps also be a way to cover the various controversies that have been around PepsiCo and its many brands like its bottled water brand Aquafina. This article present you a general overview of the controversy in order to inform you in the most objective manner all the facets of this world-know brand.

The bottle’s logo is composed of a blue label with a mountain scenery and the slogan: “Pure Refreshment”. This image marketed by Acquafina gives somewhat the wrong impression to many busy customers who are convinced they are buying “pure” water that is sourced from the mountain spring. In 2007, Pepsi-Cola had to publicly announce that the labels of the Aquafina bottles will be changed in order to clearly indicate that their water does not come from a mountain source but is instead purified and treated tap water. This news cause a lot of stir amongst customers and environmentalist groups that are already anti-plastic water bottles. The bottles were labeled : “Bottled at the source P.W.S  and only last year Americans have spent about $2.17 billion on Aquafina” (Source: http://money.cnn.com/2007/07/27/news/companies/pepsi_coke/). Spending such a considerable amount of money to drink tap water and waste a ridiculous quantity of water could have been avoided by a major transparency politics on the side of Acquafina. According to NaturalNews.com, “PepsiCo only agreed to tell the truth on their bottled water labels after being pressured by Corporate Accountability International (CAI), a non-profit organization that helps protect consumers from cooperate abuse” (Source: http://www.naturalnews.com/021962.html). The CAI gathered and instigated customers from all over the world in order to voice their complains directly to PepsiCo that later decided to add the phrase : “public water source” to the label. For many, this is still not clear and explicative enough since it could imply that Acquafina in itself is a public water source. This controversy helped to shade the light on other giant cooperation that were doing exactly the same thing. “Coca-Cola does not have plans to change the labeling on its Dasani brand bottled water, despite the fact the water also comes from a public water supply” (Souce: http://money.cnn.com/2007/07/27/news/companies/pepsi_coke/).

Despite all, Aquafina and Pepsi both are fervent believers in cooperate social responsibility based on the eco-green attitude they promote on their website. Aquafina’s link A refreshed commitment gives simple tips to costumers on how to conserve water while publicizing their new plastic water bottle that uses 35% less plastic than the one from 8 years ago. (Source: http://www.aquafina.com/). Any giant cooperation has a greener side and a darker side that is more business oriented. Giant firms are not charities and are obviously not expected to work for the good of the world.  The fact that they are under the constant scrutiny of public opinion and the media, it forces them to adopt more long- term sustainable behaviors.

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1 comment

  1. Cameron says:

    I just brought all my cans to the closest dream machine! It works and seems like a great initiative!


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