In 1967, the song “San Francisco” by Scott McKenzie described “a whole generation, with a new explanation.” The line still captures a central challenge for brands today. Customers continually redefine what they want from the products they choose: more health, less sugar, greater functionality, better value, or simply a better fit for the moments in which they consume them.
For beverage brands, these changing expectations are reshaping what relevance means. The issue encompasses more than appealing to a younger generation. It is understanding how people’s needs, tastes, and occasions are changing across generations.
PepsiCo provides a useful example. Across Pepsi, Gatorade, Mountain Dew, and poppi, the company is adapting established brands and adding new ones to respond to changing definitions of refreshment, hydration, indulgence, and wellness. That is the new definition of brand relevance: staying close enough to changing customer needs that the brand continues to earn a role in people’s lives.
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Remaining relevant in a changing world is critical to a brand’s health. Brand Relevance is a key driver of purchase intent. It means the brand is up to date and top of mind with customers. And the brand is perceived as addressing current customer needs.
The president of Beverage US at PepsiCo, Mike Del Pozzo, in a video interview with The Wall Street Journal, spoke about how Pepsi’s beverage brands are renovating and innovating to remain relevant as customers and potential customers redefine their wants. As Mr. Del Pozzo stated, “ The category of carbonated sodas is focused on those who want this, but want this differently.”
Mr. Del Pozzo also commented on how the beverages division understood the importance of needs within specific occasions. He noted that although having availability across different pack sizes was important, usage occasions were much more important to the brands, especially Pepsi. Mr. Del Pozzo said, “Sixty percent of Zero Sugar Pepsi (usage) is associated with food occasions.” The wildly successful Mountain Dew Baja Blast is specifically designed to complement “the savory, cheesy, and spicy foods on the Taco Bell menu.” People have different needs on different occasions. Segmenting by needs-based occasions is critical for enduring profitable growth.
Gatorade is a PepsiCo beverage that is undergoing “new explanations” renovations. As a bit of background, Gatorade is a brand based on problem-solution. Finding a relevant, differentiating solution to people’s problems is a great source of innovation and renovation.
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The football coach at the University of Florida recognized that his team, the Gators (hence the brand name), sweltering in the Sunshine State’s heat, needed to replace their carbohydrates, electrolytes, and water lost during practices. He turned to the lab folks at the University. Gatorade was born. Gatorade is an immensely successful and well-known brand. But times change, people change, and athletes change. Gatorade is no longer just a sports drink. People consume Gatorade for “everyday hydration.”
Many people, including athletes, are also more concerned about their sugar intake. Although there are different versions of Gatorade with varying amounts of sugar, there are also Gatorade Zero (0 grams of sugar) and Gatorade Fit (0 grams of added sugar), which use electrolytes from watermelon juice and sea salt.
Gatorade’s G2 is a lower-sugar alternative to Gatorade. Mr. Del Pozzo indicated that 20% of lapsed Gatorade users returned to Gatorade through its low-sugar alternative.
For a “whole” younger generation and a generation of wellness seekers, PepsiCo bought Poppi. The Poppi brand is a prebiotic soda that aligns with the desire for “gut health.” With 35 calories or fewer, Poppi is an alternative to more sugar-intensive sodas. According to Mr. Del Pozzo, Poppi is “redefining soda“ for a young cohort of soda users. Soda may no longer be seen as a sugary drink. New explanation. As Mr. Del Pozzo told Bloomberg, the Poppi brand “is on fire.”
Pepsi, the company’s flagship brand, is struggling. Reporting in The Wall Street Journal indicated that Pepsi’s hard-core focus on its snack division and the division’s profitability may have shifted some resources. On the other hand, Mr. Del Pozzo said that Pepsi has always been a challenger brand. Always the Avis to the leader Hertz. A challenger brand is neither a niche brand nor the market leader. A challenger brand is aggressive, bold, and ambitious, and can be disruptive to the marketplace. A challenger brand has a burning desire to outshine, outclass, outdo, outpace, outperform the industry.
Pepsi’s challenger advantage will not come from repeating old rivalry. It will come from making the Pepsi brand more relevant to contemporary occasions, tastes, and definitions of value.
The 1980s Pepsi Challenge is a great example of how Pepsi disrupted people’s views about Coke relative to Pepsi. In today’s marketplace, Zero Sugar Pepsi is a true Coke contender.
In an ever-changing, increasingly competitive marketing world, brands need true customer-insight-driven innovation and renovation to stay relevant. Innovations and renovations breathe active life into brands.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
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