Five Questions with Todd Kaplan, PepsiCo
Todd Kaplan, Vice President of Marketing, PepsiCo
What are the big success stories for your brand over the last 12 months that have driven your brand strength and growth?
This past year was a standout year for the Pepsi brand, as it continued to grow sales across the trademark and each of its sub-brands for the 13th straight quarter and built upon its brand legacy. We have also seen Pepsi’s brand equity experience significant growth across all key measures – including a 7-point increase in brand preference. Finally, we have re-energized the brand’s cultural currency, achieving unprecedented levels of excitement with highs in overall earned and social media chatter.
We feel strongly that this resurgence in Pepsi’s brand strength has been driven by three factors: renewed focus on driving cultural relevance, ongoing and disruptive innovation, and embracing the brand’s challenger mindset and bold approach to creativity.
First, we have seen a renewed focus on cultural relevance. With regards to standout cultural moments, it doesn’t get any bigger than the Pepsi Super Bowl Halftime Show. While we just announced our new lineup for what will prove to be an incredible Super Bowl in LA in 2022, this past year we had to make a big pivot considering the pandemic, and truly reimagine the platform. When we announced that The Weeknd would be our headline artist, we were stunned by the reception of fans online and the incredible levels of anticipation for the performance given the long-term absence of live music. We therefore decided to expand the 12-minute show into a 6-week experience and immerse fans in the action. We provided them with behind-the-scenes content, AR/WR experiences, leadup and pre-game advertisements, and even a documentary chronicling the ‘making of’ which recently aired on Showtime. Clearly, the pivot paid off, with Pepsi becoming the #1 most talked about brand on the Super Bowl, earning 52% total share of voice on game day.
In the past year, Pepsi has been actively disrupting and innovating which has reinvigorated the brand. Whether it has been launching scaled new products like Pepsi Mango, or limited time offerings like Pepsi Soda Shop, a modern take on classic black cherry and cream soda flavors from the past, we have been providing a range of new offerings for our consumers. We have launched a variety of buzzworthy limited edition “product drops”, ranging from Pepsi Apple Pie, to “Cocoa” Cola, to PEPSI x PEEPS, a marshmallow soda, which sold on eBay for more than $1,000.
Our innovation hasn’t just been limited to our product offerings and we have also been innovating around the creation of new media models, taking a bigger role in the content creation process. Earlier this year we partnered with FOX to create a primetime TV game show, Cherries Wild, and partnered with MTV to create a reality dating show, Match Me If You Can. We have innovated in the restaurant space, creating the first-ever ‘fast-beverage’ restaurant, Pep’s Place, a delivery-based ghost kitchen. The model flips the traditional ordering process on its head, as at Pep’s Place the cola comes first, and consumers are invited to select food offerings that pair best with their Pepsi of choice.
Pepsi really embraced its challenger mindset, launching an array of programs that boldly faced the competition. For Pepsi, being a challenger brand is about having the courage to confront the uncomfortable cultural truths that exist about your brand, especially when they fall within your competitive set. We put a stake in the ground with our #BetterwithPepsi campaign, and many in the industry have referred to it as some of our best work in years – maybe ever.
We have known for years a product truth about the brand: that burgers taste better with a Pepsi and there is science behind how the formula breaks down the grease of the burger and how the taste profiles complement each other. Yet for over 30 years, the top three U.S. burger chains have poured our competitors’ product, in the process denying consumers the opportunity to enjoy their burgers the optimal way: with an ice-cold Pepsi. We leaned into this tension, drawing on third-party blind taste tests and consumer survey data that suggested 60% of participants preferred their burgers with Pepsi.
And on National Hamburger Day, we proved that all burgers go #BetterWithPepsi by revealing how Pepsi’s logo appears in the wrappers of the top 3 burger chains (executed via meticulous origami artists), showing that while Pepsi may not always be on the menu, it’s always in the picture. We complemented this with a bold offer to reimburse the cost of a Pepsi for any consumer who posted a picture of them trying a Big Mac, Whopper, or Dave’s Single with a Pepsi on National Hamburger Day. It was a bold move and challenged consumers to test the truth head on – reconsidering the role that their beverage plays in enhancing their burgers, while generating a ton of positive buzz for the brand.
Thinking about the customer: we have a hypothesis that consumers once made purchases to signify their economic capital, then later to signify their intellectual capital, and most recently to signal their “ethical capital”. Does this hypothesis resonate with you and how do you address it from a brand standpoint? What about your brand do you fix & what do you flex?
This is such an important question. As the world continues to grapple with the devastating effects of the pandemic alongside macro factors ranging from social justice to the health of the planet, people are burdened with more uncertainty coming into the regular stresses of their daily lives. As such, brands are increasingly tasked to do more than just provide their product or services to consumers, but rather to also help make a positive impact in the world and society at large. The best brands should be as dynamic and multifaceted as the people they serve, as consumers want to empathize, understand, and connect with brands in profound ways.
Pepsi has committed to putting its brand purpose at the center of everything it does and instigate moments of unapologetic enjoyment. This purpose was derived from true insights about our consumers themselves and how they approach their lives, so we are looking to continue to encourage them to do more of what they love, even in the face of judgement. We advocate for individuality, and we promote the right for all to enjoy. By leveraging our power as one of the world’s most valued and recognized brands, Pepsi leans into its purpose to lead the industry through community giveback and engagement programs for the people who matter most: our consumers, partners and those impacted most by the pandemic and current state of social affairs.
At the outset of the pandemic, during a time when consumers around the world were anxious, confused, and isolated in their homes, we thought about how best we could help people by leveraging the platforms and resources of our brand. So, we decided to partner with Global Citizen to create “One World: Together at Home”, pulling together a globally televised virtual concert in a matter of weeks to aid healthcare workers fighting against COVID-19, while simultaneously bringing joy and a feeling of connectivity to the 280 million viewers around the world. From designing the logo, to leading the marketing efforts for the show, to tapping into our wealth of music, design, and media relationships and resources, “One World: Together at Home” raised $127.9 million, providing $55.1 million to the COVID-19 Solidarity Response Fund and $72.8 million to local and regional responders.
We also recently launched an exciting new brand platform we are calling “Pepsi Trash Talk.” It’s an interactive sustainability platform aimed at teaching consumers the ins and outs of recycling, with the help of an all-star lineup of trash talking NFL athletes. When you think about sustainability and recycling, one of the biggest barriers consumers face is a lack of understanding around what to recycle. So, to bring some fun and awareness to it, we partnered with a range of NFL athletes to “talk trash” – literally about the difference between trash and recycling, but in a way that brings the fun ‘trash talking’ spirit with their rivals into play. Pepsi Trash Talk also celebrates Pepsi’s very bold and important move around sustainable packaging as we recently announced our goal that all Pepsi-branded products in the U.S. will be converted to 100% rPET (recycled plastic) bottles by 2030, with Pepsi Zero Sugar beginning to be sold in 100% rPET bottles by 2022. As we look towards a brighter future, it is critical that we as brands become a force for good to accelerate the positive change we need around sustainability. From educating consumers on the importance of recycling and the planetary impacts of their choices, to taking personal accountability when commit our biggest brand to become built out of 100% recycled plastic, we are constantly taking big steps forward.
This year, in support of the ongoing fight for social justice, we launched “Dig In”, a platform dedicated to supporting Black-owned restaurants by mobilizing consumers to generate $100 million in sales over the next five years. Among other initiatives, this includes countless new partnerships with organizations such as EatOkra, a user-friendly app helping consumers find local Black-owned restaurants, alongside collaborating with Black Restaurant Week to encourage consumers and raise visibility for Black-owned restaurants. We also led the creation of Black Restaurants Deliver, an eight-week, no-cost consultancy that optimizes and builds online ordering and delivery capabilities for over 400 restaurants in more than 40 local communities.
We believe that competition goes well beyond our industry and is ultimately driven by real consumers out in the world and trends they are creating.
Increasingly we see that traditional industry or category conventions are less helpful to understand a brands’ commercial landscape. And that understanding and planning around consumer motivations or desires gives a better sense of the true competition. Does this hypothesis resonate with you and how do you address it from a brand standpoint? Are traditional category or industry definitions as useful as they once were?
While traditional category and industry definitions will always be helpful, our decisions are always in service of our consumers and the cultural context that surrounds us. Now more than ever, culture is rapidly changing, and brands can’t look at the traditional ways of doing things if they want their brand to resonate. Starting the process with the consumer and cultural context (with the right touchpoints throughout to enable agility) has become the ‘new normal’ for us at Pepsi, which has enabled the brand to connect in a much more relevant way with people. While we are a big brand, we need to think small and encourage each other to embrace the ambiguity in the world to strengthen our agility, as even the best laid plans right now can change on a dime. Preemptively empowering our teams to think through different scenarios is critically important to ensure the output resonates in the evolving commercial landscape.
Today, competition is all around us. Established and new beverages continue to fight for consumer consumption and in new occasions. New channels of commerce are continuing to emerge and fight for their share. Disruptive media channels are competing for consumers attention. Everywhere you look, disruption is happening with new and established categories that profoundly affect our business. But instead of approaching these challenges with fear, we project our competitive spirit through our Pepsi challenger mindset.
Pepsi has a great history of battling it out with our conventional competitor, and we have maintained that fiery spirit today with bold challenger executions taking them head on. But beyond that, I always encourage my team to look at ourselves, other categories, and our media channels. We need to challenge ourselves and ensure that we are on the front foot creating solutions and staying ahead of the competition. We are constantly updating our own brand, our competitor brands, our internal team culture and conventional industry assumptions. We take our inspiration from external trends and behaviors with a “culture in vs. brand out” approach. We invite cultural truths into the process, prior to pushing out our brand objectives. We believe that competition goes well beyond our industry and is ultimately driven by real consumers out in the world and trends they are creating.
With culture constantly evolving, context matters more than it ever has before. If we understand cultural developments, we can keep pace with shifting consumer expectations. There can be a creative execution that is spot-on and relevant today, but tone-deaf tomorrow due to a change in context. It is therefore critical to understand the needs, wants, and expectations of today’s consumers. And today, people want brands that act with a broader purpose. Brand purpose is all about knowing what you stand for and adding value to people’s lives in the most authentic way possible.
The best brands should be as dynamic and multifaceted as the people they serve, as consumers want to empathize, understand, and connect with brands in profound ways.
Post-COVID, post Social Justice – the world is settling back to a new normal. How have these events affected your brand strategy? Part of what we see with clients is a closer relationship between the consumer-facing brand and the employee-facing brand. How are you managing these dimensions together? What is challenging for you in this?
At the time, the scale and rawness of the pandemic and social injustice events were challenging for brands given the amount of disruption across industries, brands, and everyday life in general. As a marketer, it was an especially difficult environment to operate in regardless of the situation. But we’ve always known how important it is to stay true and authentic to who we are as a brand, especially as consumers were increasingly looking to brands for answers.
Most importantly, we doubled down on putting people first and listened to, understood and empathized with each other, whether it be our target consumer or our employees. While you could argue we have been more distant since we haven’t been in each other’s physical vicinity, in our Zoom calls we got to know people’s kids, dogs, home setups and reconnect over virtual happy hours and created stronger relationships with our teams. With that bond we have been able to address the most difficult conversations about subjects like social justice in an honest and open manner. Once that baseline was established, it became much easier to overlay our brand POV and how and where we would like to service consumers experiencing those same things. The challenge is to ensure that we maintain customers at the forefront of our minds, even if individuals don’t necessarily agree. But it all starts and ends with empathy and having a deep understanding not just of our consumers, but how they are feeling at these volatile moments.
What are the major disruptors and accelerators of competition and brand growth on your horizon?
One of the most exciting parts about marketing is that there is constant disruption taking place. Three years ago, nobody could have predicted how TikTok would impact our society, the way we live and work, and how we consume content and connect with brands. NFT’s are the next horizon that will dramatically disrupt the world and how brands connect with consumers. The power of voice, AI enabled technology, e-commerce, streaming, and so many other trends are disrupting our world everyday as we speak. There is no doubt the future of content creation and consumption is here, and at almost every turn we take, life as we know it is increasingly evolving to an on-demand dynamic.
As a brand in this environment, we are constantly on the lookout for what new trends are emerging in the marketplace. From the rise of Netflix Watch Parties to audio-based social platforms, people are looking to engage in unprecedented ways. Brands are tasked with meeting them where they are, whether on a new platform, big screen, handheld device or even a watch face – dramatically changing the marketing mix and creative toolkits brands need to reach and connect with their consumers. Despite it all, one thing won’t change; consumers will always continue to engage with brands and content that resonates with them and addresses their needs and things on their minds, in an engaging and consistent manner.