The Journal: Can Pepsi Make a Comeback? Episode Release Date: April 11, 2025

Hosts: Allison Poley (Guest Host)
Produced by: The Wall Street Journal & Gimlet

1. Introduction

In this episode of The Journal, guest host Allison Poley delves into the current state of PepsiCo, exploring whether the iconic beverage can reclaim its former glory amidst fierce competition and shifting consumer preferences. The discussion is enriched by insights from Laura Cooper, a seasoned reporter covering the soda industry.

2. The Rise and Rivalry: Pepsi vs. Coca-Cola

The episode begins with a nostalgic look at Pepsi's golden era. Allison reminisces about Pepsi's cultural dominance in the early 2000s, highlighting celebrity endorsements like Britney Spears that positioned Pepsi as the "cool" alternative to Coca-Cola.

Allison Poley [01:14]: "I look back and think that [Pepsi] were the coolest when Britney Spears was selling it back in the early 2000."

Laura Cooper provides historical context, tracing Pepsi's aggressive marketing strategies during the Cola Wars, including the famous Pepsi Challenge that aimed to dethrone Coca-Cola as the leading cola brand in the U.S.

Laura Cooper [03:23]: "Pepsi was positioning Coke as being really old fashioned and Pepsi was the hip, cool soda for young people."

3. Diversification and Decline of PepsiCo

As PepsiCo expanded beyond beverages into snacks and fast food in the 1980s and beyond, Pepsi's focus began to wane. Cooper explains that while PepsiCo successfully acquired brands like Frito-Lay, KFC, Taco Bell, and Gatorade, Pepsi sales started to decline as resources were diverted.

Laura Cooper [05:42]: "Pepsi Cola sales had been dipping lower and lower."

By the late 2010s, this diversification strategy contributed to Pepsi slipping from the second to the third position in the U.S. soda market, overtaken by Dr. Pepper.

4. Current Strategies to Revive Pepsi

Facing an inflection point, PepsiCo appointed Ram Krishnan as the head of beverages in the U.S., tasked with reversing the downward trend. Krishnan adopted a hands-on approach, traveling extensively to understand consumer behavior and optimize shelf placements in major retailers.

Allison Poley [08:35]: "He's traveling four days a week across the country doing this."

A pivotal strategy under Krishnan involved integrating food and beverage distribution to leverage PepsiCo's robust distribution network, ensuring better product visibility and availability.

5. Marketing Innovations and Collaborations

To rekindle Pepsi's appeal, PepsiCo launched a new marketing campaign emphasizing that "Pepsi goes better with food." This campaign underscores Pepsi's unique flavor profile suited for pairing with various cuisines, positioning it as the preferred choice in dining settings.

Additionally, PepsiCo reignited the Pepsi Challenge by introducing a showdown between Pepsi Zero Sugar and Coca-Cola Zero Sugar, aiming to engage younger, health-conscious consumers through digital platforms like TikTok and Instagram.

Laura Cooper [10:48]: "Krishnan is trying to bring Pepsi back into the mainstream by advertising on TikTok and Instagram."

The acquisition of prebiotic soda brand Poppy signifies PepsiCo's commitment to catering to Gen Z's preference for healthier beverage options.

Allison Poley [11:30]: "Poppy is considered to be a healthier soda and that is important to bringing in Gen Z and a bunch of new consumers."

6. Challenges in the Soda Category

Despite these efforts, the soda industry faces significant challenges. Increasing health consciousness among consumers has led to a decline in traditional soda consumption. Public figures like RFK have criticized sugary carbonated drinks, labeling them as "poison," which has further dampened the category's appeal.

Allison Poley [11:15]: "RFK has come out and referred to sugary carbonated drinks as poison, that just the category as a whole is having a harder time."

Consumers are shifting towards alternatives like energy drinks, seltzers, and healthier beverage options, making it difficult for traditional sodas to maintain their market share.

7. Competition with Coca-Cola

Coca-Cola continues to dominate the beverage industry, maintaining its status as the top cola brand. Its focused strategy as a pure beverage company, without the distractions of a diversified portfolio, has been pivotal to its sustained success. The company's iconic marketing, such as the perennial polar bears during Christmas, keeps it consistently in the public eye.

Allison Poley [12:38]: "Coca Cola is a pure beverage company. They do not have food. And when I spoke to their CEO, he believes that their focus on this core area of beverage helped them win."

In contrast, PepsiCo's broader focus has diluted its brand identity in the cola market, making it challenging to reclaim its former position.

8. Future Prospects and Conclusions

PepsiCo's strategic pivots, including acquisitions like Poppy and revamped marketing campaigns, present a potential pathway for rejuvenating Pepsi's market presence. However, the effectiveness of these initiatives remains to be seen as the company navigates a market increasingly wary of sugary and traditional sodas.

Allison acknowledges the uphill battle ahead but remains cautiously optimistic about PepsiCo's ability to innovate and adapt to changing consumer preferences.

Allison Poley [13:38]: "I do think the PepsiCo definitely has an opportunity here and that they are doing everything they can to regain market share."

The episode concludes with a reflection on PepsiCo's commitment to evolving its product offerings and marketing strategies in hopes of winning back consumers and restoring Pepsi to its rightful place in the soda hierarchy.

Key Takeaways:

• Historical Strengths: Pepsi's past success was driven by cultural relevance and aggressive marketing.
• Diversification Challenges: Expanding into snacks and fast food may have diverted focus from core beverage products.
• Current Strategies: Emphasis on marketing, acquisitions like Poppy, and leveraging digital platforms to engage younger audiences.
• Industry Challenges: Health concerns and shifting consumer preferences pose significant hurdles for traditional sodas.
• Competitive Landscape: Coca-Cola's focused strategy reinforces its market dominance, making Pepsi's comeback more challenging.

Notable Quotes:

• Allison Poley [01:14]: "I look back and think that [Pepsi] were the coolest when Britney Spears was selling it back in the early 200."
• Laura Cooper [03:23]: "Pepsi was positioning Coke as being really old fashioned and Pepsi was the hip, cool soda for young people."
• Allison Poley [08:35]: "He's traveling four days a week across the country doing this."
• Allison Poley [11:30]: "Poppy is considered to be a healthier soda and that is important to bringing in Gen Z and a bunch of new consumers."
• Allison Poley [12:38]: "Coca Cola is a pure beverage company. They do not have food."

This summary provides a comprehensive overview of the episode "Can Pepsi Make a Comeback?" from The Journal, capturing the essential discussions, strategies, and challenges faced by PepsiCo in its quest to regain market prominence.