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Fast Follower – PepsiCo Takes on LaCroix in Sparkling Water Battle

PepsiCo Launches bubly, Bringing an Undeniable Pop of Personality to the Sparkling Water Category

PepsiCo Inc. is bringing its marketing muscle to the sparkling-water craze with a new drink aimed squarely at LaCroix, the upstart market leader.

Called Bubly, the drink will come in eight flavors and hit stores at the end of February. PepsiCo will advertise the product with two television ads on March 4 during the Academy Awards, one of the most-watched television events of the year. The Purchase, New York-based beverage giant said the Bubly launch will be one of its biggest ever.

The introduction of bubly comes one year after PepsiCo launched it premium bottled water LIFEWTR, and furthers the company’s commitment to its water portfolio. It also continues Pepsi’s aims that at least two-thirds of the global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-ounce serving by 2025. The New York Times reports that bubbly is “the most direct attack yet” on popular flavored sparkling water brand LaCroix.

LaCroix, which is produced by National Beverage Corp., doesn’t use traditional mass-media advertising. It built its consumer base through aggressive retail marketing and social media, said Duane Stanford, executive editor of Beverage-Digest, the trade journal that first reported on PepsiCo’s plans. The sparking-water category is growing by double digits annually, with LaCroix boosting volume by 63 percent in 2016, Stanford said.

“Bubly is PepsiCo’s most direct and significant attempt yet to challenge LaCroix,” Stanford wrote in a report Thursday.

Todd Kaplan, vice president of PepsiCo North America Beverages’ Water Portfolio, said in a news release that the company saw “an opportunity to innovate” in the sparkling water category by building a new brand and product.

This ground-up technique is slightly different than that of The Coca-Cola Co. (NYSE: KO), which has leaned heavily on its Venturing & Emerging Brands unit to acquire companies that can reach the ever-important millennial demographic. No acquisition was bigger than its $220 million acquisition in October of Topo Chico, one of Mexico’s most popular sparkling waters. Mixed with its roll out of Dasani and SmartWater Sparking waters, the company’s sparkling water sales increased by 42 percent in the past five years, according to the Motley Fool.

Coca-Cola is also dabbling in favor variations, adding Georgia Peach and California Raspberry to its full-sugar core soda line and launching a “brand rejuvenation” of Diet Coke that includes four new flavors: Diet Coke Ginger Lime, Diet Coke Twisted Mango, Diet Coke Zesty Blood Orange and Diet Coke Feisty Cherry.










PHOTO: PepsiCo

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