I recently blogged about questions regarding how PepsiCo’s voluntary beverage guidelines, announced in March, would be implemented in schools given that contracts are made at the local level. Now with back- to-school in full swing, I have even more questions about how PepsiCo may be using stealth marketing techniques to gain access to that coveted captive K-12 audience.
Today, the company announced a new program it calls Score for Your School. From the press release: Continue reading →
This past March, soft drink giant PepsiCo announced with much fanfare a new global school policy. The specific guidelines, to take effect by 2012, limit the types of beverages that are to be sold in schools. According to the press release, the policy will “stop sales of full-sugar soft drinks to primary and secondary schools.”
That’s why the announcement last week that Union County High School in Indiana was signing on to a brand new five-year contract with Pepsi (thereby ending its exclusive contract with Coca-Cola) came as a surprise. Not the contract itself, but what one school official had to say about it. From the news article:
The new contract is expected to earn the high school and middle school and booster groups $20,000 more over five years, Union County Middle School Assistant Principal Mark Detweiler said. Prices for soft drinks will remain $1.25, but school officials expect sales to increase with Pepsi products. “Students drink Mountain Dew,” Detweiler said.
They sure do, only problem is, PepsiCo says those products aren’t for sale. Or are they?
I asked Derek Yach, director of Global Health Policy at PepsiCo for an explanation and he told me that the vending machines have not been put into place. He also said:
Our intent from the outset has been that the contract be 100 percent compliant with the American Beverage Association / Alliance for a Health Generation guidelines and other relevant PepsiCo policies. Our local teams in Indiana are well aware of this and will work closely with local school officials to ensure compliance.
Yach was referring to yet another voluntary policy announced by the soft drink industry back in 2006.
Someone should have probably clued in the school officials in Indiana at the time they signed the new contract. Were they even made aware of the PepsiCo policy not to sell the worst products, even if they are the most popular?
This raises many questions about how PepsiCo’s school policy will play out in each school district. Indeed, the language of the policy is pretty vague on implementation and enforcement:
PepsiCo will encourage our bottlers, vending companies and third-party distributors to work closely with parents, community leaders and school officials to ensure that only products that meet the following guidelines are offered…
“Encourage?” “Work closely?” And while it’s nice to mention them, what do parents and community leaders have to do with school contracts?
Here’s what New York University Professor Marion Nestle, author of Food Politics has to say about the Indiana contract:
In my experience, you have to see for yourself, which is why I love visiting schools when I get the chance. With school officials in tow, you can watch kids using the vending machines during the lunch hour with nobody saying a word. The incentive here is to sell MORE product, not less, and that’s the problem.
Right. And here we have the odd situation where the vendors will essentially be telling its customers: Sorry, but we can’t sell you Pepsi and Mountain Dew, those products that the kids love best and that will bring you all that extra cash you need to run your programs.
Let’s see how well that works.
Every few years, when sales decline in a flagship brand, the parent company has to figure out how to “refresh the brand” to re-boost sales and keep investors happy. Such is the case now with PepsiCo’s Gatorade line, which has been in a sales slump for three years.
Invented in 1965 by University of Florida researchers, Gatorade is PepsiCo’s third-biggest selling global beverage brand after Pepsi-Cola and Mountain Dew. So when its sales declined 14% last year, this was cause for concern on Wall Street. Enter “G” brands, PepsiCo’s first in a series of marketing strategies aimed at reviving Gatorade sales. If you’ve been wondering what all those G ads were for, you’re not alone. But odds are, you’re also not the target audience.
Critical to maintaining brand loyalty of course is reaching young customers. According to a recent story in the Wall Street Journal called, “Gatorade Before and After: PepsiCo’s New Ad Campaign Aims to Boost Its Struggling Sports-Drink Business,” the company says the renaming effort has been a hit with teens. To create the “G Series” line, Gatorade interviewed more than 10,000 teen athletes, parents and coaches, says WSJ:
The first stage of Gatorade’s return to its athletic roots came last year with a makeover dubbing the drink “G.” The move fell flat with some consumers who said they were confused by the new packaging, but [Gatorade’s chief marketing officer] Ms. Robb O’Hagan said the “G” campaign achieved its aim of reconnecting with teenagers, who saw the drink as something “my parents drink.”
Reconnecting with teenagers, the needed demographic to replace the aging consumers from previous decades, check. Now comes stage 2 of getting the brand off life support: inventing entirely new ways to promote the products as performance enhancing for athletes, or athletic-wannabes.
Not satisfied to merely be a thirst-quenching “sports drink,” PepsiCo has created not one, not two, but three ways to drink Gatorade, called the “G Series.” (No doubt, the “science” behind this new 3-pronged approach was cooked up at the PepsiCo-funded Gatorade Sports Science Institute, and yes, that’s a real place.) Now kids can mimic their favorite basketball star before, during, and after the game. The three products—Prime, Perform and Recover—together will cost about $7, which is more than triple the price of one plain old 20-oz. Gatorade bottle. How brilliant is that, triple your sales while tripling the empty-calorie consumption, cha-ching!
But of course the costs may be much higher from the resulting health care stemming from the adverse health effects of promoting needless beverages to teens. As the WSJ notes, “teens are Gatorade’s main target.” And Gatorade’s O’Hagan minced no words when she described the teen years:
It’s the most critical time in their emotional relationship with sport. Without a doubt, that’s when consumers enter the Gatorade franchise.
Emotional relationships, entering the franchise, does this sound like corporate responsibility to you? This is the same company that touted itself as being on board with Michelle Obama’s Let’s Move campaign to end childhood obesity. I guess Ms O’Hagan didn’t get that memo.
The need to save a struggling brand by targeting teens could certainly explain why PepsiCo’s recent announcement of a “global policy” on school beverages was suspiciously silent on Gatorade. When I tried to ask PepsiCo management about this disconnect, I was told the products were for “athletes” but no specifics were given on how to keep Gatorade out of the hands of non-athletic students, which, let’s be honest, describes the overwhelming majority of sedentary kids these days.
In my research for Appetite for Profit, every nutritionist and health professional I spoke to agreed that the average teen certainly has no need for “sports drinks,” at least not until we start suffering from a national de-hydration epidemic, which seems unlikely. Meantime, teens, who are already heavily targeted with PepsiCo’s Pepsi-Cola and Mountain Dew brands, will now be bombarded with even more messages to drink highly-caloric, nutritionally-deficient beverages. As a result, we can expect even higher risks of obesity and related health problems that go along with over-consumption.
And with reports of PepsiCo spending $30 million to revive the Gatorade brand, the marketing effort is likely to succeed. Despite the company’s claims of corporate responsibility, all that really matters to PepsiCo is the bottom line, and Gatorade is already showing positive signs of a comeback. Again, from the WSJ article:
“Gatorade is still down but it’s not down as much as it has been previously,” Chief Financial Officer Hugh Johnston said in an interview. “I really do feel good about the fact that we’re getting the Gatorade business back on track.”
At least someone feels good. I am feeling a little ill myself.
